What you need to know:

• Winning Group owns online retailer Appliances Online
• It has an in-house studio, creates ads for suppliers and builds marketing strategies to grow sales on its platforms.
• CMO Sven Lindell thinks it is more sophisticated than better known retailer media operators, such as the supermarkets, and delivers more comprehensive results.

While Australia’s supermarkets are seen as retailer media leaders, Winning Group CMO Sven Lindell suggests they are some years behind.

Appliances Online is Winning Group’s biggest retail brand. Lindell, a former Woolworths digital strategy exec and CMO of online retailer Temple & Webster, says the group has a far more sophisticated model than its competitors have grasped.

It uses an in-house production studio to create ads for suppliers as well as its own, and works on media strategy with brands before moving to execution. It also removes the silos between trade and marketing budgets, according to Lindell.

“We didn’t want to work with the traditional co-op model, which is, ‘how do I extract as much money as possible?’ What we’re working on is joint value that we extract into the market. We’re work on consolidated plans together,” Lindell says.

Profitable promotion

Instead of the traditional retailer-supplier relationship, Appliances Online prizes the top spots on its online stores, which brands can bid, build campaigns, and negotiate for. But the “secret sauce” is how those campaigns drive profitable sales for both the retailer and the supplier.

“We have a way to maximise profits for the business that I think some of the big guys don't yet understand,” Lindell says.

“They might try to push San Remo pasta. But what happens if there are four or five other pasta brands that actually deliver higher margin impact? They've now given away all these ad spots. Do they know the value of that ad spot based on the projected uplift from profitability standpoint of their business, and have they then priced that media appropriately?

“What I find is that some of the internal rate cards from suppliers, they're still saying, ‘that's $1,000, that's $10,000, that's $20,000 for this ad spot’. It doesn't take into account the fact that there is an opportunity cost for giving up that spot.”

Rather, Appliances Online sells packages to improve a product’s position in the category – fridges, for example. A new model of fridge can’t become ‘popular’ overnight, so the supplier and retailer develop a strategy to boost the number of sales and reviews that product has until it can legitimately be listed as ‘popular’. That may include social media, emails, Winning Group’s glossy magazine (called Winning), or other channels.

Not every campaign is an overnight success, admits Lindell, but the retailer is transparent and shares learning with each supplier via post-campaign analysis.

“We’re not selling pixels on a page, but a marketing program that helps you move [product] and adjusts the models within your business based on goals.”

This article is an extract from Mi3's new 28-page deep dive into the rise of Australia' retailer media operators, forecast to to become a $1 billion-plus market by 2025. 

The report includes input from experts at: Cartology, Chobani, Citrus Ad, Dentsu, GroupM, Initiative, JCDecaux, MediaVillage, Mindshare, News Corp, OMG, oOh!Media, Publicis, PwC, Resolution Digital, Seven, Sonder, Tumbleturn Media, 10ViacomCBS, 303MullenLowe, Winning Group and more.

To find out what’s in store, click here to download the report.