If you've heard a talk on retail media in the last few years, you've undoubtedly heard the phrase: 'we're building the plane while flying it.' The cliché is meant to highlight that it's all moving so quickly and we're figuring it out as we go. But given how long we've truly been at this, if you're hearing this phrase, you should be wary about getting on that plane. We need to move with speed — but we shouldn't be winging it at this point. And just as importantly, we shouldn't be stuck at a surface level. We need to take retail media seriously, and it needs to be much more than a 'strategy'.
The Big PictureWe are not as mature as the narrative suggests.
The narratives around standardization, unified tech stacks, and growth to $100BN+ would make you think we're in a highly mature market. Don't fret — we are not. The first 15-ish years of this thing were spent convincing people to take it seriously, and painstakingly figuring out how to effectively integrate it into legacy retail in such a way that it could scale. And therein lies the message that almost everyone is missing.
In my second post in my Leapfrog Series on retail media — posts that serve to help new and emerging retailers leapfrog incumbents — I'm touching just the surface of how retailers and service providers can more effectively think about playing in retail media, based on my real-world experience building it for Walmart, among others. (And you can read my previous post on how today's retail media businesses aren't so dissimilar from what was created in the 1990s.)
The PatternThe eerily consistent challenges across all of retail.
Over the last several months I've met with many retailers, analysts, service providers, and brands in the retail media ecosystem. And once you break through the standard perceived challenges, the meat of the issue within every retailer — big and small and across the globe — is resoundingly consistent:
What's more intriguing is that not only is almost every retailer struggling with the exact same challenges related to retail media — but we're all independently developing our own strategies to address them, ultimately ending up in the same place.
All of these challenges seem to center around one core reality in retail: 'we want the money, but we don't have the right people and plan to get there.'
The CalloutsCautiously leaping into the space.
Some key callouts I'd warn any retailer newly approaching, or looking to scale in, this space. If you're selling this proposition internally and you agree with the below, feel free to quote me on it. Heck, I'll even send you a short (likely animated) video to send to your leadership team.
1 · No retailer is created equal.
Be wary of people who tell you they have the exact-right playbook for your business without understanding your customer or internal workings. The challenges are consistent, but the approach needs to be catered to a specific retailer. That said, your uniqueness should not create friction in buying advertising from you — if you're completely different in your approach, nobody will have the capacity to work with you.
2 · Be honest with yourself.
The first reason any retailer explores retail media is because they've heard of this high-margin money that could let them invest in other areas. That's okay — but if you're truly just in it for the money, your time in the space is limited. These monies need to be seen as a way to genuinely improve the joint efforts and relationship between suppliers and retailers — a new retail flywheel, if you will. And to make this truly successful, it needs to better support the customer relationship and flywheel.
3 · Invest in the intangibles.
Not just in areas where you can directly attribute revenue. You can absolutely build a retail media business from the get-go that is self-sustaining — but your competitors are investing in things like better analytics, strategic change management, and technologies that let ads display in-store. Most of these are hard to directly attribute revenue to, but they will be your differentiators.
4 · Treat this as a new skillset.
B2B marketing is very different than your current B2C marketing skillset. Merchants have a very different negotiating capacity than someone who sells ads for a living. Store operations cannot effectively flight ads — this is a real example. Just because you have people who do broadly similar things, doesn't mean they can compete in what has become a hyper-specialized environment.
5 · Ask a LOT of questions.
Consult with people who have built this before — but know that not many people have, and even fewer have built it from the inside, which adds a whole other level of complexity. Ask dumb questions. Ask about the how. Ask for specifics: "How does this effectively work in concert with merchandising or marketing?" "How do you ensure incrementality and not just dollar shifts from trade?" To make this thing truly scalable, your experts need to go three to four levels deep and understand the core fundamentals of retail — not just media.
6 · Take this business seriously.
This is not a side project or a 'we'll see how it goes.' If you're choosing to enter the space, either you're all-in or you should focus your efforts elsewhere. A 'half-in' approach risks damaging your relationships with your internal teams, your suppliers, and your customers. Just as important is a well-thought-out plan — one you can action in the immediate term.
A Note from the EditorThat's me!
The good news is that though truly experienced talent in the retail media space is hard to come by — people who have actually built and scaled this thing effectively — they (we) are out there. And we've slogged through years of incredibly painful trialing, learning, and change so that you don't have to.