IndyCar Partner Hy-Vee Launches RedMedia To Improve Shopping Experience

From its Name and Imaging Licensing (NIL) agreements with University of Iowa National Player of the Year basketball star Caitlin Clark and other collegiate stars, to its sponsorship and support of the NFL’s Kansas City Chiefs and Minnesota Vikings, and its season-long partnership with IndyCar, Hy-Vee has done an outstanding job of creating brand awareness in the supermarket industry.

Hy-Vee is one of IndyCar’s most innovative and active partners and helped turned the all-but-shuttered Iowa Speedway into one of the biggest weekend’s of the IndyCar season with the Hy-Vee IndyCar Race Weekend at Iowa.

The innovative promotion Hy-Vee brought, turned it from just another race to a combination of big-name entertainment with a doubleheader of IndyCar contests.

This year’s Hy-Vee IndyCar Race Weekend at Iowa Speedway featured full concerts by Carrie Underwood before the first race and a post-race concert by Kenny Chesney afterwards. The following day featured Zac Brown Band before the Sunday race and global entertainment sensation Ed Sheeran afterwards.

Team Penske’s Josef Newgarden won both races on the race track, and the large crowd that made its way to the short oval in Newton, Iowa were able to see four o the biggest acts in the music industry.

But at its core, Hy-Vee is a business that sells groceries.

The best way to do that is through innovation and marketing.

The West Des Moines, Iowa-based supermarket chain is centered in the Midwestern United States with plans to expand in Indianapolis, Nashville and Louisville.

This week, Hy-Vee officially launched its full-scale retail media network at Groceryshop 2023 in Las Vegas known as Hy-Vee RedMedia. It is designed to build brand affinity through meaningful and personalized interactions that allows companies to reach specific consumers across multiple channels. Those included Hy-Vee digital platforms, in-store advertising, and brand-safe site.

Suppliers can focus their messaging based on purchasing behavior and brand preference, creating a personalized shopping experience for customers.

For instance, if a consumer is interested in fresh cut meat and produce, they will receive information that best fits those interests instead of getting one-size-fits-all ads ranging from shampoo and baby diapers, while wine and spirits shoppers will receive additional information that pertains to what they typically purchase in this area.

Jason Farver is the Executive Vice President, Hy-Vee Supply Chain and President, RedMedia and helped explain the concept that was announced this week at Groceryshop 2023 in Las Vegas.

According to Farver, retail media networks have been growing since the covid pandemic in 2020. With the rise of online shopping, retailers have been able to study the information and connect brands that best interest the consumer.

“Our retail media is taking information from our customers on buying behaviors and patterns and helping that inform brand advertising to get more efficient and effective in our overall advertising,” Farver told me. “It is personalizing to the consumer the messaging and helping them cut through some of the noise of some of the advertising to get more specific to what they want to purchase.”

Retail media is outpacing traditional marketing. By leveraging insights in product purchasing and other buyer habits, it allows companies to be more strategic with their marketing dollars. It also helps improve the customer experience by reaching the right customer at the right time with the right product offering, according to Farver.

“Our goals will always be in line with the rest of the company,” Farver explained. “Our operating philosophy from Hy-Vee is all about service. That is an area where we have differentiated, and we are going to really lean into.

“As a company, we are focused on our tagline, it’s a brand promise, ‘Where there is a helpful smile in every aisle.’

“We really push hard differentiating based on service, with the rest of the company, how do we serve our customers better through more efficient advertising better promotions, deals they want to know about, prices they want to know about. That is the biggest focus.

“On the brand side, we want to be great brand partners to help do as much growth as we can together.”

Farver said buyer habits are collectively analyzed by the company to help better connect brands with consumers.

“The way it improves their experience is they can take powerful, first party data,” Farver explained. “It’s all anonymized and be able to build campaigns to speak to specific customers about new product launches and promotions in a very specific way with better advertising.

“It helps our brand partners be more specific with their brand dollars and advertising and helps them really understand our customers better.

For decades, consumers received printed shoppers, or “Sale Papers” in the mailbox to see which products were on sale for that week at supermarkets. Usually, they arrived in the mail by Wednesday and shoppers made out their shopping lists and clipped coupons. Then, it was off to the supermarket on Thursday, Friday, and Saturday to purchase items off that list.

Times have changed.

According to Farver, 80 percent of Hy-Vee’s customers are digitally engaged.

“A big focus for us is how do we approach our customers in an omni-channel way,” he continued. “To those customers that may want to see more traditional advertising, how do we speak to them in a relevant way. But to the new generation and the 80 percent of the customers who are digitally engaged, how do we make sure we are talking to them through the buying process?

“That’s through social media, through email campaigns, our ‘Aisles Online’ platform and a lot of times it’s in-store.

“One of the big focus areas for our retail media that sets us apart is we are really attacking the in-store potion of retail media. That’s having screens and having digital capabilities in a store to give a message to a customer that is at that point of purchase.”

Randy Edeker is the Chairman of the Board of Hy-Vee and previously President and Chief Executive Officer. During his time as Hy-Vee’s leader, he stressed innovation and identifying buying habits of customers.

With an eye toward detail, quality, cleanliness, and customer service, Edeker helped Hy-Vee become one of the leading regional supermarket chains in the nation.

“The company is way more than a regional grocery store,” Farver said. “It’s very innovative. Over the past 10 or 15 years, Randy Edeker has really challenged the group on how to innovate and grow. Hy-Vee is unique and different because we are a lot more than groceries. We have pharmacies and dietetics and specialty health care and banking and our ‘Fast and Fresh’ and wine and spirits and many more facets to the company.

“Because of those different facets to the company, that really gives a lot of power to our retail media network. We have powerful insights on our customers that can support and drive growth because Hy-Vee is so unique and has a lot of different business units to it.

“We’ve got some cool things retail media network versus retail media network around in-store applications. We are working with partners to take the instore screens and personalize ads and improve our shopping capabilities inside the store.”

Innovation concepts such as RedMedia are an example of how Hy-Vee continues its forward-thinking.

“It’s keeping your eye to the future and making sure we are innovative, and we don’t miss big trends,” Farver said. “Retail media is one of those huge waves and trends that is a seismic shift of the way advertising is placed, but also remembering your roots and remembering what brought you there and we have a lot of different customers.

“Because we are a service-oriented company, we are going to adapt our style to fit our customer and we are not going to ask our customer to adapt their style to fit us. We are going to do some traditional things to make sure we are speaking to those current customers, but also watching for trends and future technology to keep up with the pace there, as well.”

RedMedia can benefit the customer that shops at home or in the store.

In fact, Farver is seeing Generation Z customers prefer the in-person shopping experience, a departure from the older Millennials who often shop online and have items delivered to their homes or held for pickup.

“Now, we are seeing the customer bouncing between a number of different channels for delivery,” Farver said. “Some customers really want to be in the store. Younger generations, Gen Z and others enjoy being in the store physically shopping. Other customers want the convenience of the pickup that they ordered online and come after work and pick it up. Some customers want it delivered.

“It’s not an, ‘either or, it’s an all that we are making sure we are working on.”

One challenge of shoppers that prefer delivery is their items are selected by store employee, who may see “Porterhouse Steak” on the order list, but the shopper may prefer one that is more marbled than lean.

Farver said there is a technology where the employee and the customer can text back and forth regarding texture of the meat or the particular item.

“We are looking at a lot of things to help the visualization of some of that fresh product as well,” Farver continued. “As we get more and more innovative and help understand new trends, that helps us stay competitive so we can keep our prices competitive and remain that grocery store of choice.

“The other thing is cutting through the noise. In the olden days, the mailer would come to your mailbox and that is what you have. In the age of the internet, there is so much noise coming at you, so many advertisements. The ability to get more personal with an ad that you want to specifically see, and buy is something our customers are asking for. Gen Zs and the younger Millennials and down want personalization so they can see exactly they are looking for.

“What promotions are out there today that are relevant to my needs and my wishes.

“That is how it helps the customers cut through a lot of the noise for more personalized content.

“A trend that is innovative is the in-store is the new front-page ad. In store, we are putting up screens in certain places where customers can interact and see some of the promotions and interactions in the store. The instore walk is the new front-page ad and that is how we cut through some of that noise as well.”

Although RedMedia is designed to connect brands with consumers, Hy-Vee is also active with sports promotion and marketing activation. It has strong partnerships with IndyCar, the NFL’s Chiefs and Vikings and NIL agreements with many collegiate athletes.

“Sports marketing at Hy-Vee is super important to our overall brand strategy and marketing, and we will continue to do all of those things, invest in IndyCar and the college and pro teams,” Farver said. “All of those impressions we get with the partnerships help drive benefit to the brand.

“Folks like Pepsi love the fact we are also partnered with the Kansas City Chiefs where we see lots and lots of impressions. It all ties together and works well.”

NIL deals remain a new opportunity for both college athletes and sponsors.

Because Hy-Vee is based in West Des Moines, Iowa, and Caitlin Clark is huge in that state as one of the top players in women’s college basketball, it was a natural connection.

“That’s a great example because we love Caitlin Clark,” Farver said. “She is a Des Moines native and a phenom and loves Hy-Vee and Hy-Chi, our Chinese product. She has talked about that on social media, even without us asking about it. We are big fans of her.

“In retail media, we have some programs coming up in March Madness to speak to our customers via Caitlin Clark that are exciting. I don’t know if we will follow her along to the pros. She is a major important part of Hy-Vee, and we will be watching her career and next steps very closely. We are also looking down to the ranks in college and high school to see who is coming up.

“The transfer portal process has really changed a lot of people’s thinking and something we have to watch. It’s a changing space and it is new and make sure someone we are partnering with is going to fit our brand and our area long term and be around.”

Tina Potthoff is Senior Vice President, Communications at Hy-Vee and said the company intends to utilize

influencers and other people along the way.

“We are still using them to promote our brand products like Hy Chi and some of those customer-facing products we have,” Potthoff said. “Patrick Mahomes promotes ‘Aisles Online.’ While we do use him to promote things that are customer-facing, RedMedia is more on the backside when it comes to suppliers opposed to customer-facing.”

Perhaps Hy-Vee’s most ambitious sports partnership is with IndyCar. The company is heavily involved in the Hy-Vee IndyCar Race Weekend at Iowa Speedway in July and has been successful in bringing over 100 of its supply vendors to become partners of the event and IndyCar.

Hy-Vee also promotes IndyCar throughout the entire season with store displays from late February until mid-September.

“We have plans to activate more year-round,” Farver said. “It’s a great partnership and we don’t want to make it seasonal. We ramp up our activation in stores and marketing around the season, and we have plans to keep it alive all year long.”