Metcash is bidding to take a bigger slice of Australia's rapidly rising retail media market. It aims to write $30m in EBIT from media within four years and has hired former McDonald’s CMO and GroupM CEO, Mark Lollback, to head its LocalEyes media business and help meet that goal.

The ASX-listed retail buying group, which owns IGA as well as Home Hardware, confirmed Lollback joins at the end of this month to lead the rollout of its network.

It joins the swelling ranks of retail media offerings jostling for ad budgets – both from brands they stock and from new advertisers. Meanwhile, retailers are also using their shopper and loyalty data to help brands target customers outside of their stores and digital walls, i.e. off-network advertising on channels like social, CTV and BVOD.

Retailer media in Australia is expected to take as much as $3bn in marketing budgets by the end of the year.

Local shops, local people

Metcash’s store network footprint encompasses circa 6,500 bannered independent retailers nationwide across food, liquor and hardware. It also services 95,000 other un-bannered supermarkets, liquor stores and hardware retailers across the country.

In a statement to Mi3, the company said the network will enable advertisers to reach local shoppers through not just a national network but through targeted regional and community-level engagement. The network is being rolled out in phases, starting with supermarkets, followed by liquor and hardware, and the firm is targeting a $30 million annual EBIT contribution by 2029.  

Metcash’s ambitions for the network were confirmed last year during its investor day. At the time, Metcash Group CEO, Doug Jones, said capital spend was low, but few investors needed convincing about how powerful a revenue opportunity and connecting force retail media can be to the Metcash network.

“I don’t need to educate any of you in the room about our retail centre or the strategic merits of it. For me in 2024, it comes down to being relevant both to suppliers and to our shoppers,” Jones said. “There is a significant financial opportunity.”

Lollback’s role is newly created, and will sit above that of current head of retail media operations, Sarah Minassian, who has been working on the trials and development. The company has confirmed she remains on the team and will now report into Lollback.

“We are thrilled to welcome Mark to the Metcash team. His appointment reflects the growth opportunity presented by the retail media space and LocalEyes, a network built specifically for the unique needs of independent retailers,” Jones said.

“Mark’s experience will be instrumental in helping our independent retailers take advantage of their collective scale and reach. LocalEyes is more than a retail media network, it’s a commitment to supporting thriving local communities and giving independent retailers a competitive edge.

“I would also like to thank Sarah Minassian for her incredible leadership in establishing Metcash’s presence in retail media first in food with exceptional results and then with the creation of LocalEyes. She will continue to be integral to the growth of the network as head of operations for retail media.” 

It’s a marked return for Lollback back into media and marketing. He has spent the last 15 months overseeing a new Global Mentorship venture, 

Lollback’s last permanent gig in the industry was as CEO of GroupM, which was rebranded to WPP Media earlier this month. Prior to that he was CMO of McDonald’s Australia. He also counts CMO roles at ANZ and PepsiCo / Lion plus VP of marketing at Unilever among his senior marketing experiences.

On his appointment Mark stated: “I am excited to be joining Metcash to help scale this huge opportunity. I truly believe LocalEyes has the potential to be a massive disruptor to the Australian media landscape – and can be an important value driver for the whole Metcash business and its partners.” 

History and background

In its last half-year report, Metcash noted retail media in-store screen installation deployment was underway with further rollout expected in Q4. Speaking to Mi3 at the time, Minassian said the first big milestone for 2025 was launching the brand name and identity, LocalEyes.  

“Our ambition is to unlock revenue opportunities for the independent network by enabling suppliers to advertise to thousands of local communities nationwide. This year, we will be looking to replicate our early success in Food across our Liquor and Hardware pillars,” Minassian told Mi3. “On our roadmap we have milestones regarding more screens, new technology with a new partnership announcement imminent. We are continually building our team and capability.

“The retail media market in Australia will continue to grow and evolve as more players enter the market. LocalEyes has a unique offering across Food, Liquor, Hardware and Professional Tools, with the largest footprint of independent retailers in Australia, making local a part of our DNA.”

Back at that investor day, Jones revealed Metcash’s food division had been quietly building what’s was initially called the ‘IGA Media Centre’, though “very low capital” has been deployed so far as it works to flesh out the proposition. The plan, he said, was to hit at least $30m in annual EBIT contribution in the next five years across its retail portfolio.

While he didn’t detail the “positive results” thus far seen across the IGA stores involved in trialling the retail network, Jones confirmed the rollout was slated to take three years starting with the food network in year one, liquor in year two and then, all being well, hardware in year three.

“They’ll then [the team] make an assessment of whether and how to bring the rest of the business onboard,” Jones said. “This is a great example of a strategy of incubating a capability inside one part of the business without delaying progress in other pillars.

“What’s most important when you think about a retail media centre, inside of Metcash, is our key competitor advantage: Independence. Our network of thousands of independent retailers and suppliers both in our network bannered today and potentially in the future, un-bannered and in our network in our future, is a core and differentiating competitive advantage for us.” 

In its description of the retail media proposition, Metcash said it’s looking at this as a revenue opportunity for its independent retailers, and said it had spied a significant and distinct opportunity for independent networks, pillars, shoppers and ad buyers. According to the presentation, this will enable advertising to thousands of local communities and small businesses across Australia, with effective targeting by targeting local communities represented by IGA’s stores across the country. Assets include direct engagement, ecommerce and digital screens.

Metcash said it’s devising a profit share and commercial model for its retailer program, and is building a central content data platform with data and privacy at its heart, as well as retail tech media solutions. The offering is being overseen by the sales and operations teams, with the support of project management, change management, legal and risk and compliance teams.

Crowded retail media play

Metcash is one of many Australian retail and banking giants joining what’s fast becoming a crowded retail media fray. Among those in the market for retail media dollars are Coles, Woolworths, Winning Group, Endeavour Group, Chemist Warehouse, Kogan, David Jones and Commonwealth Bank.

According to owned media consultancy Sonder, ones to watch are Bunnings, Accent Group, JB-Hi-Fi, Mecca and Kmart. In grocery and liquor, it’s First Choice and Vintage Cellars, while in finance it's Visa and Mastercard. Co-founder Jonathan Hopkins previously told Mi3 the market is now at a "tipping point".

GroupM predicts global advertising revenue from retail media channels will grow 9.9 per cent to reach US$125.7 billion in 2023, hitting US$180 billion in five years and surpassing TV ad spend in 2028.

Spending on retail media advertising in Australia was two years ago projected to hit $1 billion by 2025 but has already passed that point. Morgan Stanley estimates Woolworth's Cartology alone is booking $550m, and forecasts a $2.83bn retail media market by 2027.

In the US, retail media channels are taking share from social media channels and TV as well as search. Amazon is powering towards a US$50bn ads business that is pushing into streaming, while Walmart is rapidly expanding capability, formats and partnerships. Locally, media buyers and ecom experts think most social and performance channels face increasing competition, though Morgan Stanley's report suggests TV networks could see biggest revenue leakage – albeit with some potential upside as retailers push into shopper data-powered targeting via BVOD channels.