Check-In: Retail Media's Growing Pains
A recent pulse check on current retail media challenges indicates plenty of hurdles but also optimism about the amount of progress to be made in the near term.
Perhaps unsurprisingly, organizational tension topped the list of obstacles hampering efforts, according to conversations with a range of industry providers, with the advancement of in-store merely adding another layer of complexity.
Many retailers are trying to build their retail media capabilities independently, leading to confusion and inefficiency, Drew Cashmore, Vantage chief strategy officer, told P2PI during Shoptalk in March. What’s more, their investments and resources aren’t aligned with their expectations of continued revenue growth.
Ownership of the in-store environment is a constant battle among retail teams, while brands want to better understand the holistic impact of retail media, noted Paul Brenner, SVP of global retail media and partnerships at In-Store Marketplace. Addressing the divide between traditional shopper ownership within merchandising and the responsibilities of retail media as a media function is a critical first step.
Related: Download the first Retail Media Planning & Industry Playbook
The retail media teams that are currently the most successful at resolving turf wars are doing so by becoming resources to the merchant team, said Sean Cheyney, head of retail media at Vistar.
Most merchant teams carry deep insight into today’s trends, but they don’t want to be burdened with the operational load associated with adtech, he said. Successful retail media teams are assuming the responsibility of securing agency dollars and serving ads, but ensuring they put the merchant’s priorities at the top of the waterfall.
“It helps everybody, and it creates a better relationship, because now the merchant team is looking at the retail media team as a resource, as opposed to, ‘Hey, you're getting in my soup,’ ” Cheyney said.
This resource mentality is particularly important as non-endemic brands become part of the equation. Identifying ways that these brands can support other efforts in a curated way is essential, as it can’t be a free-for-all, said Cheyney.
Brand Pressure Intensifying
As brands increase their investments in retail media — 70% of CPG brand marketers said they would increase their investment this year in P2PI’s 2025 Retailer Media Network Ratings & Insights Report — the pressure to provide more visibility into measurement continues to grow.
Tulika Pandey, e-commerce and shopper marketing lead, WK Kellogg, noted at P2PI’s Retail Media Summit Canada in February that her company’s retail media investments are being allocated from a flat budget. As a result, her team has learned to be very clear on objectives.
Top-of-funnel retail media has been a challenge, she said. “We start talking CPMs, which are never capable when it comes to retail media,” she said.
In-store measurement is further complicated by the fact that many retailers’ data science teams aren’t yet considering in-store as part of a holistic view of performance, whether because of prioritization or a lack of resources, said Brenner.
He sees a need to move toward a cost-per-shopper model, which measures the cost to reach or influence one shopper through in-store media. When compared with traditional in-store tactics like printed signage or sampling, it represents a more accurate measurement of investments and provides more clarity into the impact of in-store retail media, according to Brenner.
Pains for Gains
Cashmore likened these organizational changes and reorientation of internal teams as fundamental steps in pursuit of a new model of retail. The change management that has to happen to get retail media to a place of maturity within an organization is a forward momentum and can create a trajectory, he said.
And while challenging, evolving toward a model where retail media teams operate with greater autonomy and authority enables them to challenge norms and reduces confusion for brands, stressed Brenner. It ultimately enables media planners to be more efficient and aggressive with investments.
Organizations may also find artificial intelligence providing a much-needed boost to retail media’s spot atop this year’s C-suite priority list. Many retail and CPG executives are facing pressure to show ROI on their AI investments — capabilities that are only as good as the data feeding them.
"A lot of C-level folks have made big promises on AI, and we know AI is only as good as your data set. There’s going to be a lot more motivation to push through and figure [it] out, because they're going to be accountable” to measure and demonstrate progress, said Brett Banner, SVP of strategy at PriceSpider.
As with all change, risk plays a big role, particularly with in-store investments. Even with progress being made toward collaboration and integration, much of it will come down to the retailers that are willing to take a risk to build out inventory in-store, said Leo Nagdas, Dunnhumby’s head of strategic partnerships and corporate development.
“It's probably a couple years down the line still to fully scale, but I think this is the year where most people will embrace retail media from a digital standpoint, and then that will pave the path to think about omnichannel optimization in the next year and a half, two years,” he said.
