Dollar Tree sets up retail media network amid boom for discount category

Dollar Tree sets up retail media network amid boom for discount category

Dive Brief:

  • Dollar Tree, Inc., the discount retail chain that operates the Dollar Tree and Family Dollar brands, unveiled a retail media network called Chesapeake Media Group, according to an announcement.

  • To support the offering, Family Dollar struck technology partnerships with Swiftly Solutions and Aki Technologies. Family Dollar also recently revamped its mobile app and website, while its Smart Coupons program now commands roughly 14 million registered users.

  • Dollar Tree joins a rush of retailers establishing media networks to try and capitalize on marketers' growing needs around data, which have been amplified by the looming deprecation of third-party cookies.

Dive Insight:

Dollar Tree jumping into the retail media fray is noteworthy because the company comes from the discount space, a fairly unique position in an increasingly crowded pack. Walmart, Target, Kroger, Macy's, CVS and Walgreens are among the major retailers that have recently established similar offerings, but none of them are necessarily direct competitors with Dollar Tree.

Leveraging its registered customer base and new technology partnerships with Swiftly and Aki Technologies, the marketer's Chesapeake Media Group aims to provide a wide range of services for brands, particularly in packaged goods. Swiftly will support all of Family Dollar's owned and operated digital media placements, along with working on closed-loop reporting tools. Aki Technologies is focused on marketing personalization and video offerings that touch across channels including mobile and connected TV.

Promoted items, category takeovers, personalized videos and static interstitials are some of the ad formats Chesapeake Media Group is touting at launch. The network has already worked with several CPG clients, but did not break out their names.

Dollar Tree has felt a windfall from the coronavirus pandemic as other areas of retail struggle to weather the crisis that has shuttered stores while making consumers wary of in-person shopping. The company plans to open 600 new stores — 400 Dollar Trees and 200 Family Dollars — this fiscal year, per MarketWatch. It's also experimenting with new store formats tailored to consumer trends driven by the pandemic.

Digital and mobile are clearly becoming a larger part of Dollar Tree's playbook, aligning with broader shifts in media consumption accelerated by COVID-19. The company recently revamped its Family Dollar app and website, two important channels for placing ads through Chesapeake Media Group.

Retail media networks have rapidly proliferated in response to changing data mandates for brands. Third-party cookies, a bedrock of online ad-targeting, are being phased out, while Apple is making its mobile Identifier for Advertisers an opt-in feature — a policy change expected to deliver a heavy hit to many platforms' ad revenue.

Since retailers own the point of sale, they wield fast troves of first-party shopper data that marketers need to engage consumers online and in stores. But some in the industry are wary of the heavy volume of retail media networks cropping up and fear that such services could turn into the types of opaque walled gardens that currently dominate digital advertising.