Walgreens’ Caroline Liu on how retail data demystifies the customer experience

Retail media has quickly grown into a powerful channel for advertisers. And it’s only getting more refined, according to Walgreens Advertising Group’s Caroline Liu.

Liu, senior director of strategy, insights and operations, spoke with The Current editor-in-chief Stephanie Paterik about retail’s many innovations over the last year, like digital in-store ad formats – and what the future could have in store.

With eMarketer forecasting that retail media ad spend could double over the next five years, here’s Liu’s take from the front lines of transformation.

Retail media has grown tremendously over the past seven years. How would you forecast the next seven years?

One of the things that I love so much about being in the retail media space is how quickly it's evolving. And I don't really see any signs of that slowing down anytime soon. So, I do anticipate continued growth in this space.

It will probably take shape in a few different ways. But if you even look at this past year, there's been so much innovation. If I think about new ad formats like digital in-store offerings, it's just such a unique and different way to think about creating that really connected ecosystem.

So much is happening in the data space. If you think about AI and machine learning, it's really pushing the boundaries in how we think about personalization and performance.

And regulation is a huge one. Over the last year or two, there have been so many regulatory changes from a data privacy perspective that it's forcing the industry to rethink how we are capturing customer data, utilizing and sharing that data and how to make sure we're always taking that very privacy-first approach.

How is Walgreens Advertising Group tapping into retail data, either to enhance the in-store experience or the digital one?

Retail data is the cornerstone of our business — not just Walgreens Advertising Group, but Walgreens as a whole. We are actively leveraging data based on 100 million plus loyalty customers, down to the SKU level.

If you think about the scale and granularity of that data, we're able to understand things like the customer response to assortment decisions; even things like what customers are gravitating towards, buy online, pick up in-store versus same-day delivery and how that is impacting our digital presence.

There are so many different ways in which that data can be central to the strategies that you're building. And it feels like the only way you can build a truly customer-centric organization is by basing those strategies on your actual customers and the data behind them.

You're working with a lot of brands, including CPG brands. What's the one thing you wish all CPG marketers knew?

A lot of times I feel like when we partner with CPGs, we're talking a lot about first-party data for audience targeting and measurement. And those are two incredibly valuable use cases for first-party data.

But there are so many other insights that you can unlock from the data as well to really inform brand strategies or your partnerships with retailers. It's such an incredible and unique way to understand how the customers are connecting directly with their brands. And I think sometimes that gets missed in the whole conversation.

Where I feel like we've really seen CPG partners be successful, especially when partnering with us, is collaborating on those data and insights on the customer from the upfront. And then we’re using that through the entire workflow, which helps maximize their investments.

What is your unpopular opinion about the advertising industry?

One of the things I have started to wonder is if we have almost become so focused on the data aspects of the industry that we started to lose a little bit of sight of the customer elements, which I think are so critical. Sometimes I feel like our conversations are starting with the data and the KPIs – and that's obviously critical to understanding performance and success and what you're trying to deliver – but it feels like this conversation needs to start more with: What are the customer objectives we're trying to achieve? What are the customer experiences we're trying to create?

If we start there, that will naturally lend itself to what the right data points and KPIs are that we should really be monitoring.

I'm hearing this come up more and more: the importance of putting the customer at the center of strategy. Are there any practical ways that you have been able to work that into your operations and strategy?

At Walgreens Advertising Group, our customer data really is the central underpinning of our entire business.

We use that data all the way from the upfront strategies to really understand the customers that matter the most to the brands that we're partnering with. Then we’re figuring out who we should be targeting and activating against from a campaign standpoint and closing the loop on the measurement.

When you make the customer data the center of the entire foundation of your business, you're able to really make that a focus area.