Coles360 General Manager Paul Brooks left the business last week after the supermarket decided it wanted its media unit lead based in Melbourne HQ where the majority of the team already resides. Brooks was operating out of Sydney and did not want to relocate to Melbourne.

Brooks departure follows Coles Media strategy and planning head Sam Hegg, who left in December to lead Wesfarmers-owned Bunnings retail media ambitions.

A Coles spokesperson confirmed that Brooks had "decided to leave Coles to pursue external opportunities closer to his home in Sydney” and that it would start an executive search “shortly” for the role. “Paul has been instrumental in building our Coles 360 media business,” Coles said. “Under his leadership, Coles 360 launched comprehensive in-store and digital media campaigns, partnered closely with brands for tailored marketing, and developed more sophisticated retail media measurement capabilities, leading to significant growth and a strong reputation both locally and globally. We thank Paul for his significant contributions and wish him well for the future.”

Some observers expect the grocery giant to appoint Brooks’ replacement from the US or UK markets, where retailers are ahead of the overall Australian market and are quickly heading to technology and platforms incorporating data-led targeting and buying of inventory and post campaign analytics and sales impact.

Margin squeeze

Industry insiders who did not want to be named said the rapid rise of competitors entering the fast-growing retail media category had curtailed growth forecasts of individual retail media operations. The larger players are looking to build out their own buying and analytics platforms while smaller operators are using the likes of Publicis-owned Citrus, Criteo, Zitcha, The Trade Desk, Vantage and others to match the scale of bigger rivals. 

“The US and UK are solving scale through partnerships like Walmart-Vizio. We’ll see similar moves here as retailers acquire or merge with tech providers,” a prominent retail media executive told Mi3. 

Walmart paid US$2.3bn for streaming service Vizio, which had 18 million accounts at the time of acquisition in February 2024, in a counter to Amazon integrating its online shopping juggernaut with its Prime streaming service for “full-funnel” advertising campaigns from content to checkout. 

Tesco in the UK has launched its Media and Insights Platform, allowing advertisers to directly access first-party data and ad inventory. 

Not all retail media units and rollouts are success stories, however. Endeavour Group, which owns Dan Murphy’s and BWS, has struggled partly due to a tech alliance with Microsoft and lack of alignment between operating brands. Wesfarmers will likely face similar issues as it moves into retail media with Bunnings, Target and Kmart.

Chemist Warehouse, with one of the largest pots in retail media, saw its “marketing and advertising” revenues fall from $604 million in FY 2023 to $489m in FY2024, according to a report in the AFR.       

Woolworths does not break out retail media revenues but its Digital & Media division, which includes Cartology, generated $675m in the first half of FY2024, up 8 per cent on the previous period. Coles reported 20.5 per cent normalised growth in FY2024 for Coles360 – Morgan Stanley estimates its income at $450m. 

Coles did not respond to Mi3's questions regarding the future-looking strategy for its retail media arm and whether any structural changes could be expected this year.

Brooks, who oversaw Coles360’s launch in early 2022, has helmed the retail media unit through significant transformation as it raced to close the gap with Woolworth’s early mover, Cartology.

“Second mover advantage means we can learn from some of the mistakes made overseas and locally … [Plus] we have actually got people that have moved from and understand the Cartology business into Coles 360,” Brooks told Mi3 in October 2022. 

Retail media has since solidified itself as one of if not the fastest-growing media channels, with GroupM forecasting it would reach $1.46 billion in ad spend in 2024 – up 26.5 per cent on the year before. It forecast a 28.1 per cent growth rate 2025. Morgan Stanley estimates forecast the market last year at $1.6bn and nudging £2bn in 2025. 

Big build

Under Brooks watch, Coles360 last year launched a custom-built measurement platform with retail data firm Circana to demonstrate ROI and drive higher advertising budget allocations to the network. 

In May, the retail media unit took over the data division of Coles and Wesfarmers Flybuys loyalty program to enable agency and supplier partners directly overlay customer data from 9 million active Flybuys members on their retail campaigns. They’ve since rebadged the offering as Coles 360 Empower, and shifted the Flybuys’ 20-strong agency sales team under the Coles360 banner.

By the end of 2024, Coles360 had also struck a deal struck with Nielsen for consumer segmentation and insights and media planning that Brooks told Mi3 was a pre-cursor for plans to strike “off network” alliances with media companies to target new or existing Coles customers for brands buying Coles media space.

Brooks first joined the Coles Group from Nine, where he’d spent three years as the network’s Sydney director of sales, leading a team of more than 150 across TV, digital, radio, data and publishing.

Brooks is on gardening leave and did not return Mi3’s calls but is expected to take another media or retail media role.