Analysis of 7-Eleven's Retail Media Network Construction: Three Key Elements Convenience Store Operators Can Learn From

In recent years, with the gradual phasing out of third-party cookies and the surge in consumers' online shopping behavior during the COVID-19 pandemic, brands urgently need a more effective way to reach consumers at the point of purchase decision. To this end, companies have begun purchasing advertising space on retailers' digital platforms and procuring retailers' first-party data—that is, data voluntarily provided by customers to the brand—to precisely target their intended audiences.

When retailers venture into the advertising sales business, this model is called a retail media network. Companies such as Kroger, Walmart, and Amazon have long been active in the retail media space, and now more businesses are following suit. According to AdWeek, 74% of brands had set up dedicated budgets for retail media networks by 2022.

7-Eleven Enters the Fray: The Birth of the Gulp Media Network

In October 2022, 7-Eleven officially announced the launch of its retail media network—Gulp Media Network—making it the first retail media network in the convenience store industry. 7-Eleven's Executive Vice President and Chief Marketing Officer Marissa Jarratt and Vice President of Loyalty and Analytics Mario Mijares confirmed this news in a recent interview.

Jordan Berke, founder and CEO of Tomorrow Retail Consulting, believes that 7-Eleven's move into retail media is not only reasonable but also necessary. He points out that many of the new projects 7-Eleven is developing require investment support, and a "thriving" media business is the best way to achieve this alternative revenue stream. "If you look at other ways retailers like 7-Eleven can make money, media takes the biggest share," he says.

Personalization and Fan Culture

Gulp Media was built over the past year to complement 7-Eleven's existing data-driven insights system, which already includes a shopper analytics platform, proprietary consumer research panels, and experiential Lab Stores. Jarratt and Mijares say that Gulp Media's launch stems from customer needs 7-Eleven identified in the "immediate consumption market" (i.e., impulse purchases). "We know retail fragmentation has already complicated things for our CPG suppliers, and the immediate consumption market is even more fragmented," they say.

Although assembling a retail media network team can be challenging—for example, Walmart poached its top advertising executive from Instacart in October 2021—7-Eleven did not seek external hires. Instead, it formed the Gulp team by pulling employees from its internal marketing department, selecting those with "broad experience."

CPG brands participating in 7-Eleven's retail media network will leverage the retailer's customer loyalty data to reach target consumers in the convenience store channel. 7-Eleven's core philosophy here can be summed up in one word: "personalization." Jarratt and Mijares say, "Gulp Media not only analyzes demographic, geographic, and attitudinal signals, but also layers in shoppers' purchase history signals."

Currently, 7-Eleven is focused on connecting its customer database with third-party advertisers through display ads, social media, and connected TV advertising. They also say they plan to explore in-store media "in the near future" and believe that leveraging fuel pumps is a "significant opportunity"—but did not disclose specific progress.

Although Jarratt and Mijares did not detail specific marketing campaigns with CPG partners, they noted that leveraging "fan culture and cultural relevance"—especially in sports—is helping drive Gulp Media's growth. "This will ultimately accelerate our loyalty program, providing customers with greater transactional and experiential value," they say.

If 7-Eleven uses this strategy to expand its loyalty program, that in turn will provide CPG partners with more first-party customer data. "We are just scratching the surface of brand fan culture and cultural relevance. In the coming months, we will target partnerships in fashion, sports, music, gaming, and more," Jarratt and Mijares say.

Three Key Success Factors

Berke is "optimistic and bullish" about the success of 7-Eleven's retail media network, even believing it will become dominant. "Although Gopuff once had retail media ambitions, we believe 7-Eleven will completely surpass Gopuff to build the most attractive omnichannel media network in the convenience store industry nationwide," he says.

He points out the three "elements" retailers need to build a media network. The first is reach. As the world's largest convenience store chain, 7-Eleven has the largest convenience store loyalty program, giving it broad reach. The second is data. 7-Eleven's massive loyalty program has more than 80 million members (according to Jarratt and Mijares), providing advertisers with rich targeting data that can cover everything from energy drink enthusiasts who don't drink coffee to tobacco users trying to quit. "Having such a large base of loyalty members enables 7-Eleven to offer advertisers precise targeting capabilities," Berke says. "As a retailer, having personal data that can be used to segment customers is crucial."

The third element—and the hardest to obtain—is advertiser trust. Berke notes that trust could become a "true differentiator" for 7-Eleven, and because of the sales- and service-oriented culture brought about by its franchise model, 7-Eleven already has an advantage over other retail media competitors. "They have a B2B culture that Walmart, Kroger, and Target have never had," he says. "When they enter the third pillar of retail media networks, they already have some cultural advantages, which will provide a huge boost when they sit down with their first advertisers."

Connecting Physical and Digital

Building a successful retail media network is no easy task, even for the world's largest convenience store retailer. As 7-Eleven works to define what retail media looks like in the convenience store and immediate consumption market, its biggest current challenge lies in bridging the gap between digital and physical. "Much of retail media today focuses on e-commerce—especially sponsored search and banner ads—while we are focused on driving consumers into physical stores," Jarratt and Mijares say.

Berke also believes that connecting physical and digital assets will be one of 7-Eleven's biggest challenges—especially ensuring it can display ads in stores while engaging users online. Additionally, he foresees 7-Eleven facing the challenge of learning advertisers' needs and how to support them, since these advertisers may be the same group as its suppliers. "Most advertisers will be suppliers," he says, "but when you serve them as advertisers, their mindset and relationship are completely different from when they are suppliers."

Berke points out that a third challenge 7-Eleven may face is inspiring franchisees' enthusiasm for Gulp Media. This can be achieved by showing how various components of the 7-Eleven shopping experience, such as digital menus or mobile checkout platforms, can create more media opportunities. "Educate them, motivate them, show them the potential of introducing new assets in stores," he says. "They need to bring franchisees along on this journey."

The Macro Perspective

Apart from fuel business, convenience stores rely heavily on impulse purchases, which allows them to measure "different types of consumer behavior compared to other retailers," Jarratt and Mijares say. Additionally, convenience stores tend to offer small-packaged goods, which could become an industry advantage. "The small packaging common in convenience stores makes customers' purchase decisions lower-cost, which in turn makes convenience stores an ideal place to test innovations before scaling them to larger packaging and big-box retail channels," they say.

Berke agrees on the advantage of small packaging and adds that convenience stores "live in the moment," whereas consumers at competitors (such as big-box retailers and grocery stores) tend to do more planned shopping, which benefits the convenience store industry. "Convenience stores are about immediate consumption," he says. "As an advertiser, I can drive very high margins because customers see the ad and react within two hours."

When asked whether convenience stores of any size should consider entering retail media, Berke didn't just answer "yes," but said "they must." He suggests that the first step is to understand the business differences between media and retail; understand the type of investment required; and build the "capabilities" to manage and scale the eventual network. Once that is done, the key is to find the brand's differentiation. "You have to find a way to make yourself relevant and have enough reach, data, and trust to compete," he says. "You need to act and build this capability, because if you haven't made progress in three years, you may find it difficult to carve out a place in this space."