← The Big Impression
The Big Impression
Target's Matt Drzewicki explains why retailers are becoming AI's most valuable data partners
00:23:49
The Roundel leader shares how Target is preparing for an AI-powered shopping future with ChatGPT advertising, privacy-conscious data collaboration and outcome-based measurement.
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A
I'm damian fowler.
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And I'm ily sliffrin.
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And welcome to the big impression.
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This week we're joined by Matt Drzewicki, senior vice president and general manager of Target's Rondell.
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Now, retail media has become one of the biggest growth engines in advertising, but it's also become a lot more complex. Consumers are discovering products across social media, search, streaming stores and now AI powered platforms.
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And for brands, the challenge isn't just showing up in these moments, it's understand which of these touch points actually drive sales.
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And that's where Ramdell comes in. Using Target corporations first party data and retail insights to help brands connect discovery to outcomes both on and off Target's platforms.
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And as shopping behavior evolves, so does the role of retail media from an in store and on site play to something much bigger.
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A
So let's get into it. Can we talk a little bit about an example of a brand working with Target's Roundel? And how does that speak to how you set out to work with brands and customers?
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C
Yeah, happy to. Well, first of all, thank you both for, for having me, for having us. And a lot of people talk about, well, what are the, some of the challenges that brands have versus the challenges that consumers are facing? And it's, it's really becomes one in the same. And it's around discovery, right? It's, it's about discovery of, of, of newness. Right. And discovery happening everywhere. Right? So consumers today, we all know significant amount of choice. They're on social, they're in our stores, they are engaging with our digital properties like our app and target.com and really what it creates is a challenge for consumers in and of itself to know where and how to find things. But then you think about the brands, right, and the challenge that, that creates in terms of this fragmented journey, if you will. And that's, that's really the role that we play at, at Roundel and within Target is helping to simplify or help that fragmented journey in benefit of both our guests at Target, but also for the brands that we, we partner with and support.
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And let's zero in on one particular brand that you've been working with.
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C
Yeah, happy to. So Aura is a, is a great example, but this, this oura ring is really, it's a, it's a great example in terms of just its on a number of fronts. But that aside, this brand has done tremendously well at Target and really has grown significantly. In 2025 they doubled their sales with Target and we helped them in that stage of Their growth and then most recently as they have grown as a brand and they continue to innovate, it's less about kind of helping them drive sales and lower funnel conversion at Target and is really about gaining new audiences like yourself. Right, like myself, in terms of generating that awareness of the offering and the aura offering specifically at Target. And so helping a brand like Aura do that, finding new guests outside of the four walls, as I say, digitally and in our stores at Target. And so we help them do that. We actually launched a new platform earlier this year called Precision Plus. What that is, is a way for, I say it's an AI driven platform that allows us on an objective, buying based way to bring together the best of two worlds. The best of what Target has, which is a deep understanding of our guest and that data along with off platform technology and media partners like the Trade Desk, like Google, like TikTok, like Meta. And so we come together in a privacy safe way through clean rooms and we give our data off to those platforms. They then do what they do best with their algorithms to go off and identify the most likely audience who is interested or could be interested in these offerings of Aura. And then they bring that data back to us and we measure it in a closed loop way so that we can understand actual business outcomes. And so probably a pretty good example of this, trying to help make that fragmented journey a little bit easier for a brand like Aura.
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A
You've described it, you've described Aura as treating that media writ large as a growth system.
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That's right.
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Instead of just a channel.
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That's right.
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Could you say a little bit more about that mindset shift?
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C
Yeah. Retail media for the longest time had been thought of as again this exclusive conversion driver that we're just going to harvest the demand that shows up within the environments, as I say, of our, of our four walls, which is very powerful and is obviously a part of the total, you know, the total funnel. But as these brands again are looking to grow, looking elsewhere for that demand, looking outside of Target for those guests and users who are most likely to engage with us and discover that new brand Aura or their new offering is really powerful. And again the measurement and actually demonstrating and seeing the outcomes that it's driving afterwards for the business.
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Yeah. Now you talked about the Precision Plus. You said this campaign used Precision plus to extend beyond Target's own ecosystem to places like the Trade Desk, Pinterest, Google, Meta. What made that off platform expansion so critical, would you say?
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C
Yeah, any brand is looking for new users of their brand and At Target, we're looking for new guests, new shoppers into our ecosystem. So we're really in a symbiotic relationship between our two, between our two companies. And so again, leveraging that, that unique aspect of what we have in our first party data and our knowledge, deep knowledge of the guest and being able to leverage that or allow or to leverage that outside of our, outside of our property, really critical.
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Now. Roundel was one of the first retail media networks to test advertising with chat.
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That's right.
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What made you want to get in there so early?
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Yeah, well it's really important to us. Precision plus as a platform was built knowing that if we go back in the way back time machine from years ago, right. There's always going to be some sort of new emerging media platform that exists. Right. So when we think about, right, the infancy in the early days of Google, five years later we have Facebook meta show up. X number of years later we have snap, we have TikTok. So right, there's always going to be a new media platform that's going to show up. We wanted to be able to create what I would consider to be an endurable platform or a resilient platform that allows us to quickly move with the market. And so the ChatGPT ads example and Pilot was a really great example of that, was that when they decided and said, listen, we are now going to be offering up the option for an advertising based solution, we effectively had the platform built that we were then able to plug in immediately into what chat was building.
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Awesome. Can you give us a concrete example maybe of how a brand might then show up in LLMs like ChatGPT through that?
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So it's still early in terms of what that ad experience looks like and they're continuing to innovate themselves and so we'll have to see what that looks like over time in terms of how they evolve. Again, I go back into the early days of what we all experienced on, on Google back in 2000 is very different than what we experience today on the platform.
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So true flexibility is the name of the game.
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That's right.
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What results have you seen from the aura work so far?
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Yeah, it's been, you know, it's been great. Again, going back to what our promise is at Roundel is really around fulfilling this promise of being able to demonstrate real outcomes in the business. And so for them it was really clear in partnership with us three times the number of influenced sales than what they had been doing with us previously prior to engaging with Precision plus. Those are real Numbers that's real product pulled off of shelf at Target to be able to demonstrate these types of results. We also in terms of more traditional media metrics like return on ad spend or ROAS also improved by about 30%. So also good to see just in terms of the efficiency of the buy that they were making with us. And again, so what that has produced is really one of Target's top sellers within the wellness space, which is also Target becoming a real destination for wellness products beyond tech and hardware across all parts of our business.
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That's interesting. You think then when you see something like that, you see those metrics pop, you see a category bloom in a way on the network.
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That's right. Yeah. I mean it's amazing to see again when we talk about, you know, I grew up in a performance media or with a performance media background. That's really important to me and really the lens that I look at when we, when we think about this. So for the longest time, if I really passionate about making sure that we're fulfilling this promise of the actual real outcomes to the business, we shouldn't have brands investing with us if we cannot deliver on that promise of actually showing them how it is delivered. Sales for them, engaged with new buyers, engaged with new users. That's again really, really the promise of what we offer beyond traditional media metrics.
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Yeah. You know, to me what stands out here is that accountability.
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That's right.
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It's not just more reach but, you know, measurable reach tied to those actual purchases. How does that change the conversation then that you're having with marketers?
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Yeah, that's a great, it's a great question. And it really I think takes us to this place where deeply understanding what that marketer is trying to accomplish in their business and connecting it back to what's unique about Target, connecting it back to what we know about the guest inside of Target. Target as a brand in and of itself has a very deep and loyal following. I love this very familiar you think about, right. The Target run. Right. And what that, you know, what that image is and what it, what it creates. Right. For Especially for busy families, which is, which is a cohort or a group that we care deeply about at Target and is really our, is really our, our, our sweet spot. So that deep understanding of what we bring in terms of who the target guest is and how it connects back to a brand like aura and how it fits into their shopping journey, how it fits into their life, how it maybe will make their, their life a little bit easier for busy Families is really what we're in service to. And Roundel's job is to help make those connections happen between what we know about the guest at Target and, and these, these brands.
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Now you mentioned that it's early days with the AI.
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Yeah.
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What do you think advertisers will need to see before AI assistance really become more of like a meaningful, like budget line item?
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Yeah, it's, I mean it's, it's interesting. It is definitely a problem to solve. We actually just, we just publicly talked about how we have, we have seen, we have seen an increase in AI driven traffic to Target.com by about 2000% over the course of the last year versus other retailers on average are seeing a 400% increase. So no, neither of these numbers are small by any means, but it just demonstrates just in terms of how, how quickly this is, this is moving in terms of how all of us as, as users, as consumers, as humans are engaging, you know, engaging with this. And so this is why we also as a company are making sure that we are, that we are playing with and engaging with all of the major partners in this space, whether it be OpenAI, whether it be Microsoft, whether it be Google. We announced that we were one of the first participants in Google's UCP in terms of that universal platform for commerce. So it will, so it's, it's happening, it's growing. And I think, as always in this business, I've been doing this for 25 years, media dollars flow to where there is performance. Right. If that is, that's kind of Performance Marketing 101. And so if, if any of these platforms or as all of these platforms are able to demonstrate performance, and from where I sit, performance equals actual business outcomes in terms of did they move product, did they sell, sell things, did they actually accomplish their goals? This is, I think when marketers start to move more intentionally on that point,
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what have retailers such as yourself learned about measurement that the rest of advertising still hasn't fully embraced?
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You know, I think there isn't a single, there isn't a single company I think here talking about the importance of getting as close as possible to, to the actual business outcomes. I know I've said that multiple times now as we've, we've chatted over the last, the last few minutes. But it is, it is when we talk about traditional media metrics of impressions and reach, yes, those are valuable to an extent, right. Depending on what you're trying to do. But at the end of the day, every single one of the brands that we're working with is trying to grow their business. We would like them to grow their business at and with Target. And so that's what we are in service of doing. And so maybe less about impressions and reach and more about actual business outcomes.
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B
Now let's zoom back out a little bit to the big picture. Target is entering what its leadership has called really a new chapter of growth. How does that broader company strategy really influence how Rendell is evolving?
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C
Yeah, so I'll pick off maybe where I left off. Well, first we have Michael Fidelke, who's our new CEO, and he took seat in February. And as part of his work, he's been very clear in terms of new strategic priorities in this new era of growth. As you, as you mentioned, the first one really being about leading with, with merchandising authority. And that is again, as I go back to really what's in Target's ethos, what's really ingrained in the brand is this notion of discovery and having these surprise and delight moments from a product product perspective. Right. And what we have become known for, things like, again, both established brands that we have in house, but also new and emerging brands. Coffee is another great example where of course, yes, we have, you know, we have Starbucks that's sitting on our, on our shelves. But we also have Rise Mushroom Coffee, which has actually become one of the best sellers in the coffee aisle for us. That is, that is a very intentional move by Target in terms of making sure that we have this diversification of brands that folks are looking for. And then I would say second along with that is really about elevating the guest experience. Right. And these surprise and delight types of moments and really being the most joyful experience in retail. And so whether that means some of our engagements that we're calling Saturday Spotlight in our stores, where there's surprise and delight moments as guests enter in terms of samples or in terms of some experiences or really what we're doing in our App Store. So our in store mode is a really great example of if you open up our app and being able to navigate the store while being in the app. We know actually our baskets are 50% bigger in the store when our guests have the app open. The in store mode is a great example of how we're helping to enable that and elevate that guest experience. And so as I mentioned, the guest is looking for. The guest is not shopping and deciding, well, I'm going to today I'm going to shop on social, tomorrow I'm going to stop shop On Search or tomorrow I'm going to shop digitally. We have to be in all of these places and we have to have all of these different types of products that they are, you know, that they are looking for. And so for us, in terms of that's what the promise that we're looking to deliver against is equity and equality in terms of the, the brands that they are discovering that it is a balance between really well known national brands which are strong partners to Target, but also some of these newer and emerging ones.
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Off the back of that we're hearing more brands demand proof of incrementality, not just impressions. Is that, would you say that's becoming the new standard for how media performance gets evaluated?
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Is this truly a new sale or a sale that I would have gotten had I not actually invested in this media or would I have gotten this someplace else? It's a, it's a very fair question. And quite frankly, Target's own marketing and media organization asks the same thing of our, of our, of our media partners. And so yes, absolutely, from a roundel perspective, our, our measurement offering has evolved considerably so that we can actually offer a view on incrementality for all of the brands that we, that we work with. Some of them are more turnkey in terms of quick measurement. Some of them may be a bit more intricate like a geo comparison or a holdout test, but absolutely. Incrementality is really becoming the currency of performance.
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Our transactions are becoming a more valuable signal in advertising.
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That transaction is, is important, but I think is what's also important to note is that transaction, what does it lead to? Down, down both in the short term as well as the long term, short term, what else is in their basket? Right. And so while we may have influenced, as I mentioned, maybe a purchase of Rise coffee. Right. Or the purchase of Aura, there is, there are other items that are living within that basket that we have a holistic story to tell in terms of who is that guest and what types of behaviors are they demonstrating for just again, a little bit more insight in terms of how they think about their purchase and their purchase journey.
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Yeah.
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As AI automates planning and buying, what would you say becomes more important? Data, creativity or customer relationships as they interact with, with the brand.
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So I think, you know, certainly I think data and creativity will need to go hand in hand when we think about, you know, this, this next, you know, world that we are already in and that is growing, that it's, that's AI enabled. But they're only as good as the data that they have within their to to deliver the outcome. So I, I really think that there is this, this marriage between, between the two that that is taking place. And I think when you do those two things really well in terms of bringing together data with creativity, I think it actually creates a new and different relationship with the customer that feels more personalized, that feels more unique and that is really the business that we are in service of.
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I heard a comment about AI and Agentic that the fuel for it is essentially retail data. Would you agree with that?
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I think when we think about media and how it can be made smarter again, that true core outcome data is, is really critical and if we can leverage that through and with AI, AI platforms, I think it becomes that much stronger.
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Yeah, I mean we've heard a lot about retail media 2.0, retail media 3.0, even five years from now. What role do you think retailers will be playing in the advertising ecosystem? If you can shift, you can even think, right.
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I would, I would say, you know, from where, from where I sit and you really start looking at the, at the retailer ecosystem again. There's different retailers that play different roles in a, in a guest or a consumer's life. And so I think it's, it's important when we think about Target as a brand, we are not intending to be the everything store. Right. That is not as I've, as I've been talking about here. Right. It's a lot of different choices across our owned brand portfolio, across national brands, across emerging brands. And so when we look to the future of really us delivering what we would consider to be the most joyful experience in retail for those brands who are looking to engage with users, consumers, shoppers who are looking for that kind of experience. I think Target plays a very real and clear prominent role that then after delivering an amazing guest experience, absolutely has an opportunity then from an advertising or a media perspective to help again make that fragmented journey a little bit easier. What I don't think is going to happen is that the consumer journey is going to get any less complicated, is going to get any less fragmented. It's only going to continue. History would tell us it is going to continue to get complicated. And so when we think about again that end destination of, of having that clear data signal that helps us understand for a brand what did they accomplish and what do we know about that? Guest? I think we always play a key and clear role.
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What would you say are marketers overthinking right now in the ecosystem?
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C
I don't know if it's Overthinking. But I might frame it maybe, maybe slightly differently if I, if I could. In terms of, in, in terms of. Because it is very fair and very complex is just the role of, of social and creators specifically. That is also a very complex part of the new consumer shopping journey or engagement journey. Challenging for brands because these creators are now telling stories about the brands with brands having less control over the storytelling around their brand. Right. They kind of have to let some of that go. And for some brands, they're very much leaning into that and allowing these creators to tell their stories and on behalf of them or about their brands. Others are maybe resisting this seismic shift. And I would just argue that there is much like we are finding and discovering ways to work within AI, I would say a similar type of approach to the creator economy and the creator approach to media.
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You know, on that note, we talked to the CMO of Minnie and she was very much telling us how all these bots, now these AI bots are like challenging, jumping in on conversations online and you know, attacking the brand, which
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C
again brand, brand safety is, is obviously a critical concern. And I would not say that, that our brand partners are overthinking that by, by any means. It's a very real, it's a very real challenge that is that, that will need to be solved for that. Again, it's the, it's the, the, this, this movement of control in the center of gravity less and less away from the brand telling the story and someone else telling that story on their behalf.
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What needs to change in the ad marketplace, if anything?
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You know, listen, advertisers want the same thing they've always, always wanted, which is about transparency, accountability, proof that the media is, is, is driving the kind of growth, incremental growth that they're looking for. And that's really where we were focused and the problem we were trying to solve with the Precision plus platform that I had mentioned previously, this way of giving them all of that transparency, all of that ability to deliver outside of our platform to deliver them that incremental growth and be really clear in terms of what it's driving for their business.
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And that's it for this edition of the Big Impression.
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This show is produced by Molten Heart. Our theme is by Love and Caliber and our associate producer is Sydney Cairn.
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And remember, having clear data signal helps us understand for a brand what did they accomplish and what do we know about that? Guest I'm Damian.
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And I'm Ayelece and we'll see you next time.