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Retail Media Breakfast Club
Home Depot’s Retail Media Playbook: How Orange Apron Media Is Winning Where Others Can’t
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I wrote this week in my column for the Drum about two big themes coming out of Home Depot's third annual Influence event, which happened on Tuesday this week. One of them was merchant alignment and the other one was the push towards self service. Both of these are notable, and the progress that Orange Apron Media has made towards those goals is notable. But there is something else. It's all the ways that Orange Apron Media is leaning into things that other retailers cannot do. And that's a real story. Let's jump in. So number one, the pro customer is a media product. Nearly every speaker at the infront hammered the pro customer. Pros represent half of Home Depot's sales. Orange Apron Media has built hundreds of pro audience segments and a localization capability that lets suppliers or advertisers target them by regional building codes and trade specialties. For example, an electrician in South Florida has different product needs than a general contractor in the Pacific Northwest, and Orange Apron Media can now segment those accordingly. The Pro customer isn't a segment that Home Depot is trying to acquire, it's a segment they already own at a depth that no competitor can match. Orange April Media is treating that depth as a media product rather than just one of many audiences to reach Number two stores are the moat. Orange Apron Media announced that it would scale in store screens to 1400 stores by the middle of this year, which is a crazy number considering that they only have a low hundreds in stores right now. It is the largest deployment to date and it's going to happen in the next few months. But the headline number understates the layered media estate that Home Depot has been assembling incrementally over several years. There are now paint screens, profocus screens, side caps, and as of this rollout, screens positioned in view of the racetrack, which they call the main walkway at the front of the store where shoppers can see every aisle's end cap and in store audio runs across more than 7,000 locations. Each format serves a different moment in the shopping journey. Now Jordan Broge, who is the executive vice president of online at the Home Depot, shared an example that made this really tangible. Paint, as in house paint, has the lowest E Commerce conversion rate of any category on homedepot.com makes sense. By conventional digital metrics, it looks like a poor investment. Why would you run ad dollars against this product category that consistently underperforms online? But when Home Depot measures enterprise conversion, that is factoring in store purchases that have been influenced by online research, paint is consistently the top performing category. So for every dollar transacting on homedepot.com, another $3 transaction in store that are influenced by the site. And that kind of measurement sophistication means it's possible to reframe the entire value proposition of digital media investment at Home Depot, because the return isn't just what happens on the website, which leads into the next point Connecting Media to Merchandising Data Orange Apron Media's integration of its supplier analytics program into Orange Access may have been the most significant announcement of the day. The supplier analytics platform, which is built on an old system called Fusion back in 2016, it gives suppliers rich merchandising data, things like sell through rates, category performance, competitive positioning, inventory levels, things like that. But it was a completely separate system that was used by merchandising teams, and it was disconnected from the media buying workflow. Stephanie Katona, who is Orange Apron Media's senior director of strategy, product and analytics, told me that the disconnect became obvious during a proof of concept stage that some advertisers didn't even know that they were subscribers to the analytics program. Those who did had to become experts in two separate platforms and manually connect the dots between their ad campaigns and their sales outcomes. Now that data flows into Orange Access, which is the name of Orange Apron Media's media buying platform, so it flows in alongside campaign reporting, and that is the feature that seemed to get a lot of suppliers attention. Alison Fowler, who is the director of media strategy at Rust Oleum, told me after the event that that was the feature she was most excited about. She said we need to translate our retail media spend and KPIs into tangible sales results at the end of the day. That's why we have these spends to grow sales together in partnership. And she says that the integration here is really going to help with that. Miracle Ads is the ad tech solution trusted by rakuten and over 50 global enterprise retailers. That's because Miracle Ads was built with both 3Pmarketplace sellers and 1P suppliers in mind. Both advertiser audiences demand a seamless advertising journey from onboarding to reporting. You can offer everything from sponsored products to to video ads all in one solution. Learn more@miracle.com that's M I R A K L.com okay, number four the tech stack as Differentiator I've talked before about how a lot of retailers are secretive about their tech stacks. That seems to be changing. Home Depot has shared a little bit more than others about their approach to technology, and when I spoke with Stephanie Katona, she reinforced this hybrid approach that they have where they have they've partnered with tech vendors to build some core infrastructure while building other proprietary solutions in house and that was really made. Those tech build versus Buy decisions are really made on a module by module basis. Wrapping up here Quirks are a feature, not a Bug Home Depot is a category specialist. It doesn't sell groceries, it doesn't sell shoes, doesn't sell general merchandise. Its customers come with high intent projects, and its catalog is curated rather than being an open marketplace. And for years, that narrower positioning might have looked like a limitation in a retail media landscape where things like monthly active users and impressions and Reach and SKU count, those were the primary selling point. But Orange Apron Media is leaning into these characteristics as features, not bugs. The pro customer, the curated catalog, the 2000 plus stores, the project based shopping journey. These are assets that can't be replicated by a marketplace with 20 million SKUs or a grocery chain that's optimizing for weekly replenishment. Worth considering for every other retailer with the media network, what are you doubling down on? Every retailer has something distinctive, and the retailers who figure out their own version of Feature, not a Bug have a path forward. As Alison Fowler of Rustoleum told me, Orange Apron Media operates differently than many retail media networks, and she said, I think they double down on what set them apart. Thanks for listening and I'll catch you next week.