Building a Retail Media Business: Challenges to Overcome and Solutions to Employ

Retail media is one of the fastest-growing advertising channels. Estimates from eMarketer anticipate that US retail media advertisement spending will increase by 88.5% from 2024 to 2028. This growth will bring significant investment from retailers as they seek to expand their marketplace offerings.

However, retailers’ unchecked excitement could risk a rushed retail media deployment that does not deliver a meaningful return on investment. By carefully identifying and thoroughly addressing several obstacles, retailers can build a robust media business that contributes to their bottom line.

Data, Technology and Organizational Challenges

Retailers have data and lots of it. But the way retailers derive value from that data is much more complicated than the average digital publisher. Retailers must build descriptive audience segments that not only outline details like purchase history, page clicks, cart abandonment, etc. but also models that predict what those shoppers might do in the future – requiring access to multiple sources of data.

From a technology perspective, it can be intimidating for retailers to start their retail media journey. The technology involved with retail media is nascent and highly competitive, with new companies adding their own solutions and platforms to this quickly evolving retail media technology landscape. An added layer of complexity emerges when one considers that many of these technologies need to integrate with existing corporate infrastructure, in a customized manner for each retailer.

Beyond technology, several organizational questions stand in the way of a fully functioning retail media network. For starters, retailers may need to build an entirely new business unit and will need to recruit team members with new skills and culture. Integration with this wider organization while protecting it presents a significant challenge. The media business shouldn’t negatively affect retail operations, nor should management hinder it from blossoming into a significant revenue stream.

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