Latest / Retail Media Breakfast Club / Retail Media’s Buffet Problem: Why Brands Are Losing Their Appetite (2026 Outlook)
Transcript
- buffet ep === [00:00:00] Kiri Masters: Taipei December, 2024. My brother, my dad and I splurged on a stay at the Grand Hyatt before an epic bike tour down the east coast of Taiwan. One of those once in a lifetime [00:00:15] trips that justified a proper sendoff. [00:00:18] Now, the breakfast buffet at the Grand Hyatt was absurd in the very best way. A sushi bar, dim sum, high-end cheeses and [00:00:30] pastries that belonged in a Parisian bakery day one at the buffet, we were giddy. You try the gym sum, I'll get the sashimi. We compared detailed notes on what was worth it, and we all went back for thirds. [00:00:44] [00:00:45] But by day four, we had become picky. We were more discerning about which foods were worth taking up space on our plates. We've Returned to our go-to favorites. We complained that the brown sugar crumb cake [00:01:00] seemed stale today. What had been a luxury just a couple of days before had become a baseline, an expectation. [00:01:08] This is what is called hedonic adaptation, and this is the same problem that retail media [00:01:15] is facing in 2026. Early on, brands were dazzled by the promise of retail media, first party data, closed loop attribution, incremental sales. Budgets flowed easily, but as retail [00:01:30] media has become an established line item, the excitement faded into expectation. [00:01:36] What once felt like a luxury buffet now feels routine? And when the novelty wears off, brands start asking harder [00:01:45] questions. Is this actually worth it? [00:01:47] [00:01:49] Kiri Masters: The path to Purchase Institute's 2026 Retail media rating study surveyed 166 CPG and agency professionals. [00:01:59] And they ran this [00:02:00] study, at least for last year, which I, covered in 2025. So it is interesting to see this comparative data flowing through. The headline of the report reminds us that the gold rush [00:02:15] is over [00:02:16] nearly six in 10 organizations increased their retail media investments in the past year. Still a majority, but down from seven in 10. Just a year ago, only 17% of [00:02:30] brand and agency media buyers plan significant budget increases compared to 27% in the previous year. Meanwhile, the share reporting a decrease investment rose from 16% [00:02:45] last year to 21% this year. [00:02:48] Now this is the retail media Doom loop. That I've described in the past in action. Last September, I wrote a piece called The Retail Media Doom Loop, which [00:03:00] describes how retailers Launch their media networks with sky high profit expectations, grab quick wins by repackaging trade dollars, and then stall out when the easy money runs dry. [00:03:12] Much of retail media's early [00:03:15] growth came from reallocating existing trade and shopper marketing spend, essentially taking the dollars from the left pocket and putting it into their right pocket. And those pools have limits and we're hitting them. And Brands now treat retail media as an [00:03:30] established line item from the Path to Purchase Institute report. [00:03:34] On average, one third of total marketing budgets are going to retail media, and that means incremental dollars are harder to come by. [00:03:42] Now we need to talk about the [00:03:45] confidence gap. And the report found that the share of brands who view retail media as just a money grab by retailers has more than doubled from 8% last year to 19% this year. Sure. That is not the [00:04:00] majority of media buyers, but paired with another finding from the report, it tells a story. [00:04:06] The share who sees retail media as effective or more effective than other digital media has dropped from 80% to [00:04:15] 71%. That is a decent slide in perceived effectiveness in a single year. Now to be clear, The market isn't planning a mass exodus from retail media, but it is getting more skeptical at the margins. [00:04:30] Retailers know that a marketplace model can dramatically boost product assortment, shopper engagement, and total revenue. But to get the most out of your marketplace, you need an ad tech [00:04:45] solution that can really engage sellers. Miracle Ads is powering the future of retail media for leading retailers to activate both three P Sellers and one P brands. [00:04:57] Learn [00:05:00] more@miracle.com. That's M-I-R-A-K l.com. [00:05:05] Now the performance hierarchy itself remains largely unchanged. The two big dogs in retail media, Amazon and Walmart [00:05:15] Connect. Both get excellent or very good ratings for things like driving sales growth, [00:05:23] but it's the mid-tier grossers and regional players that continue to trail. [00:05:30] By a pretty significant margin much of the time with some networks, seeing only 10 to 12% of advertisers rate their sales growth performance as very good. Last year, I wrote that the gap between these top tier [00:05:45] RMNs and emerging RMNs. [00:05:47] And I noted the chasm between those two cohorts. This year's data suggests that that chasm has calcified, the leaders aren't really pulling further ahead as much as everyone else is [00:06:00] failing to close ground. [00:06:01] Respondents who held the money grab point of view, cited high spend requirements, poor data transparency, and weak performance as reasons as one CPG marketer said in their [00:06:15] qualitative comments. Some retailers provide a strong experience on site and integrate their ads thoughtfully. Other retailers feel like they're just trying to cash in. [00:06:24] Measurement remains the dividing line. [00:06:27] Nearly half of media buyers, 48% [00:06:30] cite measurement and attribution as their top challenge. [00:06:33] That's very interesting given how often retailers publicly tout their closed loop capabilities. [00:06:40] Now I've profiled retail media networks that are getting it right, or at least [00:06:45] proving that they're willing to be accountable and invest in their capabilities. Best Buy. Built an attribution system where 93% of transactions can tie back to a customer ID Dollar Dollar General implemented randomized control trials based on [00:07:00] IAB guidance. [00:07:00] And of course, Costco just revealed their comprehensive ad tech stack showing a big investment in a flexible data foundation. And there is a bright spot in the path to purchase Institute data. Mentions of data sharing [00:07:15] frustrations have declined year over year in open-ended responses. That doesn't mean the problem is solved, but it suggests the frustration mix may be shifting less. [00:07:24] Where's my data and more prove this actually works. Now [00:07:30] what for RMNs outside the top tier? The mandate from brands is clear Investment intensity is fading, skepticism is rising, and the networks that can't demonstrate genuine value will find budgets harder to [00:07:45] secure. The doom loop isn't inevitable, but breaking out of it requires real commitment to measurement, transparency, and infrastructure, [00:07:55] not just new ad formats for brands, the takeaway is to [00:08:00] be more selective. The data backs up what many have suspected concentrate spend, where retailers can prove they drive growth and approach underperformers with pilot budgets and stricter KPIs. [00:08:12] The buffet at the Grand [00:08:15] Hyatt Taipei was legitimately excellent, but by day four, when the novelty wore off, I started running a value calculation in my head. Is this really worth $60 per person? Retail media has entered that same phase. [00:08:30] Brands are no longer dazzled by the promise of first party data and closed loop attribution. [00:08:35] They're asking whether the premium is justified by the results. The networks that treat this as a wake up call will earn disproportionate budgets. The [00:08:45] ones that don't will find themselves stuck in the middle. Watching brands walk past their buffet station and wondering where their own next meal will come from. [00:08:54]