Omnicom announced it has closed the previously announced acquisition of Flywheel Digital, the digital commerce business of Ascential. Terms of the acquisition were first announced on October 30, 2023.

“We are thrilled to cross the finish line and officially welcome everyone at Flywheel to Omnicom,” said John Wren, Chairman and CEO, Omnicom. “Flywheel’s best-in-class solutions are a game changer for our clients whose demand for digital commerce and retail media solutions continues to grow. When combined with our well-established offerings in commerce, media and precision marketing, we now have end-to-end services that outpace the competition.”

The addition of Flywheel uniquely positions Omnicom to seamlessly integrate offerings across retail and brand media, digital and in-store commerce, as well as precision marketing. Omnicom will connect the audience and behavioral data in its open operating system Omni to the product and transaction data in Flywheel Commerce Cloud to provide its clients unmatched insights and analytics.

Flywheel will operate as a Practice Area within Omnicom and will be led by Duncan Painter, previously the CEO of Ascential.

“Joining the Omnicom network takes our organization to the next level. We can scale faster, leverage relationships, and combine data and technology efforts,” said Duncan Painter, CEO of Flywheel. “We look forward to the unique offering created as we connect complementary data from Flywheel Commerce Cloud and Omni. The combination gives our clients an unmatched view of complex digital marketplaces and offers them new ways to automate, optimize, and measure their digital commerce and media spend.”

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Omnicom announced it has agreed to acquire Flywheel Digital, the digital commerce business of Ascential, for a net cash purchase price of approximately $835 million. Flywheel’s services enable top brands to sell more goods more efficiently across hundreds of digital marketplaces, such as Amazon, Walmart, and Alibaba.

Since 2014, Flywheel has been at the forefront of digital commerce, developing a suite of best-in-class solutions specifically designed to accelerate sales for the world’s leading brands. With a workforce of more than 2,000 professionals, Flywheel provides services in retail commerce operations, media execution, and market intelligence to over 4500 brands. These services are reinforced by their advanced technology platform, Flywheel Commerce Cloud, which delivers near real-time insights to improve decision-making and boost sales.

John Wren, Chairman and CEO of Omnicom said, “Ecommerce sales worldwide are set to increase by 50%, reaching about $7 trillion dollars by 2025. The acquisition of Flywheel significantly broadens our reach and influence in the rapidly expanding digital commerce and retail media sectors, two of the fastest-growing parts of the industry. Together, we will seamlessly integrate our offerings across retail and brand media, digital and in-store commerce, and CRM, ultimately delivering superior results for our clients.”

For the past eight years, Flywheel has assembled leading-edge digital commerce solutions and integrated them into a proprietary platform with a single user interface. Today, the Flywheel Commerce Cloud platform manages tens of billions in product sales and billions of advertising spend annually across digital marketplaces. Flywheel Commerce Cloud’s product and transaction data will be connected to Omni’s audience and behavioral data to provide unmatched insights and analytics.

Flywheel will operate as a Practice Area within Omnicom and will be led by Duncan Painter who currently serves as CEO of Ascential.

Painter stated, “By connecting Flywheel Commerce Cloud’s product and transaction data with Omni’s audience and behavioral data, we are poised to offer an end-to-end set of services that outpaces the competition. We aim to empower our clients to automate, optimize, and measure their digital commerce and media spend within an increasingly complex marketplace.”

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Incisiv, a next-generation industry insights firm that helps retailers and brands navigate digital disruption, and Wynshop, a provider of digital commerce and fulfillment solutions for local store-based retailers, revealed the findings from their State of Digital Grocery Performance Card: Q3 2023.

According to the latest Grocery Doppio report, grocers are taking care with the amount they spend on technology, selecting specific areas which they appear to believe are the most important to focus on. Seventy-one percent of grocers declined to increase their overall technology budgets in 2024. However, 83% will increase spending on digital technologies in 2024, 79% will experiment with AI use cases, and 67% will increase their spending on security-related technologies.

The Q3 2023 Scorecard is based on shopping data from 2 million shopper orders plus polling responses from 36,910 grocery shoppers and 3,504 grocery industry executives.

More key findings from the State of Digital Grocery Performance Card: Q3 2023 Performance Card include:

• Labor, inventory, and fulfillment lead grocers digital spending increases
  — Grocers will spend 7.9% more on digital in 2024 than they did in 2023.
  — Within that increase, they intend to spend the most on labor optimization (11.2%), inventory optimization (9.6%), picking optimization (8.1%), and digital offers/loyalty (7.3%).
  
• Digital sales up slightly, but digital’s share of market dropped and third-party app share hit an all-time low
  — Total grocery sales in Q3, 2023 came in at $236 billion, up slightly from $226 billion in Q2, 2023
  — Digital grocery sales rose to $30.4 billion in Q3, up from $29.5 billion in Q2, but that represented just 12.9% of overall grocery sales—the first time that digital’s share of market fell below 13% this year.
  — Third party apps suffered the most, losing 4.1% of digital market share in Q3, falling to just 15.9% in Q3, as compared to 26.6% when Grocery Doppio analyzed this metric in Q3, 2022.
  
• Digital basket sizes increased, even as items/basket fell
  — Digital basket sizes grew by 12% in Q3, 2023, even as the average items/basket fell by 2-3 items.
  — Basket sizes for large grocers were 4x that of small grocers. 

“Digital grocery sales do appear to have reached a plateau, but digital still influences most grocery sales,” said Gaurav Pant, Chief Insights Officer of both Incisiv and Grocery Doppio. “Along with this indicator of relative market maturity, we are seeing grocers become more focused on where they are spending on technology. Investment in digital channels and security are both increasing, while AI is clearly seen as an important area of future growth as well.”

“You can read grocers’ digital pain points between the lines of their 2024 budgets,” said Charlie Kaplan, Chief Revenue Officer of Wynshop. “They need technology tools to optimize labor amidst rising costs, better inventory management as supply chain disruptions persist, tools for operational efficiency in fulfillment, and ways to lean into digital incentives and loyalty.”

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