As part of their ongoing mission to help clients stay ahead of the competition in a fast-paced, constantly evolving marketplace, Mars UnitedSM Commerce’s Customer Development team closely monitors the strategic activity taking place across all key retailers and channels.
Each month, the teams compile Marketplace Assessment reports on the retailers (including Walmart, Target, Amazon, and Kroger) and channels (such as Regional Grocery, C-Store, Club, Pet, Beauty, and On-Demand Delivery) that are most important to the business success of our clients. The following report outlines noteworthy events across eight key retailers from the team’s most recent round of assessments. (To receive copies of the full reports, contact EVP-Customer Development Kandi Arrington at [email protected].)
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Lowe’s, The Home Depot Both Hire AI Assistants
Home improvement retailers Lowe’s and The Home Depot have both unveiled AI-powered shopper assistance tools.
Lowe’s: Through a collaboration with OpenAI, Lowe’s introduced Mylow, a virtual advisor/AI assistant designed for use by both shoppers and employees. Fortified with Lowe’s’ extensive home improvement knowledge, the assistant will provide advice on specific projects, step-by-step instructions, and product suggestions. Shoppers using Mylow can customize the recommendations by providing details such as budget parameters and ZIP code. The assistant is currently available on desktop and mobile for members of the MyLowe’s Rewards loyalty program.
Home Depot: Meanwhile, The Home Depot launched Magic Apron, a proprietary suite of generative AI tools that also answers shopper questions. Magic Apron utilizes large language models and is trained on Home Depot’s product catalog and project expertise. Available on the retailer’s website and mobile app for all shoppers, the assistant answers product questions, provides project guidelines, and summarizes reviews.
Relevance: Both assistants were developed to create seamless, personalized experiences that will give shoppers the information they need to confidently take on home improvement projects — and buy the products they need to get the job done. The data that both Mylow and Magic Apron will generate about project trends, barriers to purchase, and general product demand should also prove insightful for brand partners down the road.
Opportunity: Brands should work with their Lowe’s and Home Depot partners to understand how these assistants can be utilized to improve product discovery, consideration, and purchase. To ensure that Mylow and Magic Apron present correct product information to shoppers and store employees, brands will need to keep their content accurate and current.
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Ahold Delhaize Sticks with Circana
Ahold Delhaize USA has renewed its strategic partnership with market research firm Circana, which provides the retailer with analytics support to strengthen decision-making, improve supply chain efficiencies, and better understand shopper behavior. The new pact will strengthen these efforts by delivering:
- A single common product hierarchy across all Ahold Delhaize USA banners to ensure consistency and precision in data analysis.
- A comprehensive, holistic view of performance across the banners.
- Innovative tools and resources, including improved supply chain forecasting to deliver more accurate demand planning and promotional effectiveness.
Relevance: Renewal of the partnership underscores Ahold Delhaize USA’s ongoing commitment to data-driven growth. Circana’s capabilities enable the retailer to provide both internal teams and CPG partners with the tools and insights needed to make more informed decisions.
Opportunity: Retailers are working hard to drive efficiency and growth by utilizing data to make better decisions, and brands should leverage these solutions in their joint business planning. (For recommendations on how to build stronger retailer relationships, read Mars United’s recent report.)
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Loblaw to Further Expand Store Network, Supply Chain
Canadian retailer Loblaw will invest CA$10 billion (US$6.9 billion) over the next five years to expand its store footprint and modernize the supply chain. The nation’s largest grocer and pharmacist currently operates roughly 2,400 stores.
With the $2.2 billion earmarked for 2025, Loblaw plans to open 50 hard discount stores and 80 locations in total across the No Frills, Maxi, Shoppers Drug Mart, Pharmaprix, and T&T Supermarket banners. It will also renovate 300 existing grocery and pharmacy stores.
Modernization of the supply chain will begin with the opening of a 1.2 million square-foot distribution center in East Gwillimbury, Ontario, that’s expected to be a major hub for operations.
The new investments build on the CA$8 billion that Loblaw has devoted to expanding the footprint and building out the supply chain since 2022.
Relevance: While the broader goal is to expand and modernize, Loblaw’s heavy focus on discount stores reflects the retailer’s efforts to deliver the value that Canadian shoppers are seeking — more than 20% of Canadians now buy their groceries at dollar stores, according to Coresight Research. Loblaw’s announcement also followed recent news that Walmart Canada plans to expand its store base as well.
Opportunity: Loblaw’s plan highlights the current need to emphasize value in the Canadian marketplace, a focus that brand marketers should also be addressing. With both Loblaw and Walmart growing their footprints, and with dollar stores gaining a larger share of consumer wallets, brands should also be rethinking their strategic partnerships to keep themselves in front of price-conscious Canadian shoppers.
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Dollar General Adds Community Sampling to the Menu
Dollar General Media Network (DGMN) is giving advertisers the opportunity to reach local shoppers through experiential sampling programs operated by third-party brand activation company Recess.
The Recess Experiential Network helps brands execute sampling programs through local events where community members and leaders distribute products to attendees. By working with national businesses (like Equinox fitness centers and WeWork shared-office spaces) and local organizations (including schools) and events, recess claims to have an audience reach of 230 million.
Relevance: Dollar General’s small-format stores don’t make ideal locations for brand sampling, and its predominantly rural footprint — 80% of stores are located in communities of 20,000 or fewer — means that surrounding communities don’t have the scale necessary to make traditional sampling programs cost-effective.
Opportunity: This new sampling partnership gives DGMN advertisers a unique opportunity to get their products in the hands of Dollar General shoppers (and other rural consumers) beyond the store base, thereby expanding the potential reach of their retail media campaigns. (To learn about other recent initiatives at DGMN, download the latest Mars United Retail Media Report Card.)
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Ulta Gives Brand Partners Inventory Updates
Ulta Beauty is working with retail data platform Lucky to let brand partners connect the retailer’s in-store product inventory to their direct-to-consumer websites and marketing activity. The capability will allow shoppers to view product availability at nearby Ulta stores and also place orders through the retailer’s same-day pickup or delivery services. Ulta operates roughly 1,400 stores across 50 states.
Relevance: By integrating Lucky’s inventory management solutions, Ulta is establishing a stronger relationship with brand partners that could increase conversion rates on DTC websites by giving shoppers easier and faster fulfillment options. It also gives Ulta a distinct advantage against competing retailers.
Opportunity: Ongoing updates to fulfillment capabilities spotlight the ongoing need to give shoppers simple, convenient, and quick fulfillment options. Brands with DTC websites should work with Ulta to ensure that this integration is being utilized through their marketing and websites.
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Sprouts Plans First Loyalty Program
Sprouts Farmers Markets will begin a phased rollout of its first loyalty program in the third quarter. The program was tested in various markets throughout 2024, with a final round conducted at an additional 24 stores last December.
The green-lighted loyalty program follows a solid fiscal 2024 performance marked by strong growth in comparable-store and ecommerce sales as well as private label expansion. Sprouts also plans to open at least 35 stores this year, which would bring the total count to 475.
Relevance: In addition to deepening connections with shoppers, the introduction of a loyalty program will give Sprouts a mechanism for building up the first-party data it needs to fuel a retail media network.
Opportunities: Brands should work with Sprouts to develop campaigns that will help drive awareness and participation in the new program in the short term, and to leverage this new direct access to the retailer’s most loyal shoppers in the long term.
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Amazon Unveils Visual Search Features
Amazon has rolled out several visual features on its mobile app as part of ongoing efforts to improve the ecommerce giant’s status as a leading platform for product search. They include:
- Visual suggestions: As shoppers type a product name or information into the search bar, they are presented with relevant images. Shoppers can select the image that best fits what they need to browse a selection of related products.
- Add text to image searches: When uploading an image to the Amazon Lens visual search tool, shoppers can now also add text to narrow the parameters. (For example, adding color, material type, or preferred dimensions to an image of a table.)
- Amazon Lens widget search: Amazon Lens’ camera search can now be launched directly from a shopper’s lock screen on Apple iOS to accommodate real-time searches.
- Videos in search: Shoppers looking for home items, appliances, toys, or electronics in the Amazon app can now watch product videos within search results without first having to click on a product listing.
Relevance: Amazon continues to improve the shopping experience on the mobile app to increase usage and conversion as it seeks to maintain its leadership position in ecommerce and retail media.
Opportunity: A well-maintained digital shelf strategy is vital here. It’s important for brands to stay up to date as Amazon continues to add and upgrade features and capabilities. Download Mars United’s latest Digital Shelf Report to stay abreast of more changes at Amazon and 10 other leading ecommerce players.
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Mars United Commerce’s Customer Development practice is an unrivaled team of in-market commerce experts who simplify the complexity of retail for our clients. Located in Bentonville, Minneapolis, Cincinnati, Chicago, Tampa and the “backyards” of other key retailers, they provide deep knowledge of the retailer, expertise in key business areas (like strategy, media and creative), and door-opening personal relationships with key executives to deliver an unmatched level of business success for clients across accounts, channels, and shopper engagement platforms. For more information, contact EVP-Customer Development Kandi Arrington at [email protected].
