Latest / Retail Media Breakfast Club / 7 Ways to Break the Retail Media Doom Loop
Transcript
- 7 ways to break the retail media doom loop === [00:00:00] Kiri Masters: Last year in 2025, I spoke about the retail media doom loop, the vicious cycle where retailers launch a media network with sky high profit expectations, grab quick wins by repackaging [00:00:15] trade dollars into retail media, and then essentially stall when that easy money runs dry ~without revenue growth, they can't justify invest.~ [00:00:23] ~Yeah. ~Without revenue growth, they can't justify investing in better technology and talent, and without better technology and [00:00:30] talent, they can't attract new advertiser budgets and the loop tightens. I've also spent the last few months writing about how agentic commerce throws out some existential questions for this [00:00:45] industry. [00:00:45] When AI. Agents build shopping baskets without ever visiting retailer websites. What happens to all that valuable onsite advertising inventory? But here's what I've come to believe. Disruption also means [00:01:00] a reset, a chance to build the kind of retail media ecosystem that should have existed from the start. [00:01:07] One built on genuine value creation rather than margin extraction. Maybe we could call this a [00:01:15] cosmic do-over the retailers who treat this moment as an opportunity rather than a threat. Have a chance to break out of the doom loop entirely. So what does that virtuous cycle actually look like? Here are a [00:01:30] few areas where I see real potential, and by no means is this an exhaustive list of opportunities. [00:01:38] I'm hoping to get feedback from you all on what I may have missed. [00:01:44] I have [00:01:45] seven ways to break the retail media doom loop, and I'm gonna have to move pretty quickly through them to make our 10 minute goal. But I am linking up to all of the pieces that I've written in the past on these topics in the show [00:02:00] notes. So make sure you check that out and sign up for the newsletter at retail media breakfast club.com. [00:02:05] [00:02:06] Kiri Masters: So Opportunity number one is doubling down on in-store and experiential media. Here's the irony. While [00:02:15] digital retail media faces existential questions from ag, agentic commerce, physical stores remain largely untouchable. People will still visit stores. They will still see these end caps and shelf displays and still [00:02:30] respond to the theater of in-store retail. [00:02:33] So One example here. Is from Sam's Club. I wrote about this last year really pushing experiential boundaries, both within the store and outside of the store, [00:02:45] turning membership into something that goes beyond transactions. Retailers with strong physical footprints have assets that digital first competitors like Amazon simply can't replicate and that agents can't [00:03:00] bypass. [00:03:00] Opportunity number two, activate the long tail through Marketplace Sellers. The average retail media network gets 28% of its revenue from mid to long tail advertisers according to Forrester Research. But [00:03:15] most retail media network tech stacks were built to manage a much smaller number of relationships with major suppliers and advertisers, not 5,000 marketplace sellers. [00:03:28] Anne Hallick, who is the VP of [00:03:30] Miracle Ads Americas cites this 80 20 rule being in play where most media revenue comes from top tier advertisers. Here's what she said at the E-Marketer Commerce Summit in December. She said [00:03:45] The challenge that revenue leaders at RMNs have faced in the past two years is some executive says, okay, now go capture the long tail. [00:03:53] And you're like with what staff? And the technology isn't set up for that. But the [00:04:00] retailers cracking this code are using self-serve technology for the long tail of marketplace sellers and seeing results. Lowe's expanded its total long tail advertis account by 23% year [00:04:15] over year after launching its third party marketplace. [00:04:19] When big brands. Don't wanna expand beyond 5, 6, 7 retail media networks. Growth has to come from somewhere else. [00:04:29] [00:04:30] Opportunity Number three, stop trying to out Amazon. Amazon. So this is from a piece much earlier in 2025. It's still super relevant today. I spoke with Jordan Whitmer, from the agency Salt who [00:04:45] distinguished, retail media networks in a really interesting way. Minor league and major league at the advanced Major League stage. [00:04:53] Differentiation comes not from controlling how investment flows in, but from unique strengths, better [00:05:00] audience building capabilities, distinctive ad units and innovative ways to deliver spend. The reality is most retailers will never match Amazon on sponsored search capabilities or any of the other interesting things that they're building, but [00:05:15] they can create unique, high value moments that make the most of their specific customer relationships and transaction data Did you know that [00:05:30] leading retail media networks drive 85% of their ads through mid and long tail advertisers? [00:05:38] Miracle Ads provides full funnel ad formats tailored to both one P and three P advertisers [00:05:45] leveraging unique AI capabilities that provide unprecedented levels of relevance and engagement. Retailers who want to capture ad spend from the long tail of three P Marketplace sellers use miracle ads in their [00:06:00] tech stack. [00:06:00] Learn more@miracle.com. That's M-I-R-A-K l.com. [00:06:08] opportunity. [00:06:09] number four, make it easy for buyers with transparency and access. [00:06:15] Two related moves at signal maturity. One is revealing your tech stack, and number two is being where media buyers already want to buy. Just this month, Costco revealed their entire retail media tech stack at [00:06:30] NRF, which I wrote about on my column for the drum. [00:06:33] We'll link up to that in the show notes. [00:06:36] And to me this makes a ton of sense. They really kind of went out on a limb in revealing their tech stack. No one else really does this, but when I [00:06:45] polled my audience of brand side buyers last year on whether knowing what a retailer's tech stack is, if that would influence their spending decisions, 88% of my audience that is on the brand side.[00:07:00] [00:07:00] Said, yes, it would influence my buying decisions if I knew what was sort of under the hood. The thing is, the sophisticated agencies and media buyers already figure out how to reverse engineer these partnerships through reporting [00:07:15] patterns anyway, and that secrecy is ultimately futile and it just creates friction ~related point.~ [00:07:20] ~Some research from Cody last year found that 96% of media buyers would certainly. On. ~On a related point, some research last year from Cody found that 96 of media buyers would consider buying onsite media using A [00:07:30] DSP, and 93% would shift non-retail budgets into retail media if they could do so programmatically. [00:07:37] Retailers might be concerned that DSP integrations will commoditize their offerings. , Obviously it also takes [00:07:45] some technical, integration, but the right supply side technology lets them protect their network while tapping into demand that currently has to take the long way around into a retailer's media [00:08:00] network. [00:08:00] So making it easy as possible for media buyers. Opportunity number five, create ad formats that sell more stuff. While most retailers fixate on replicating Amazon's playbook with sponsored product listings, a handful of [00:08:15] companies have identified WT space in moments that feel less like advertising and more like value creation for both a retailer and a brand to win. [00:08:24] So a couple of examples here. I covered these approaches, in an article last year. [00:08:30] Rocked is a company that monetizes the post-purchase moment when shoppers are most receptive. So you see these post-purchase offers, swish treats the product itself as media adding full-size samples to online grocery orders. [00:08:44] I [00:08:45] love this concept, and that is funded by the CPG brands. Another company, NIFT Turns Thank you moments into brand discovery opportunities on the web. And these approaches work because they create genuine win-wins for brands and [00:09:00] retailers. So there's some interesting and innovative ideas out there if you're ready to look. [00:09:05] Idea number six. Loyalty programs are a bastion when AI agents comparison shop across retailers. Price competition. [00:09:15] Becomes a race to the bottom. But loyalty benefits, like early access, exclusive products, tier multipliers, those could create genuine preferences that persist even when agents are optimizing for price, because they [00:09:30] could take that loyalty program into consideration. [00:09:33] Or I, as a consumer could instruct my shopping agent to prefer to shop at this retailer for its loyalty program. [00:09:41] Idea number seven is consider [00:09:45] cross retailer collaboration. The irony of retail media is that fragmentation hurts everyone. Brands struggle to manage dozens of separate platforms. Retailers struggle to compete individually with the huge scale [00:10:00] of the incumbents. What if the answer is collaboration? [00:10:03] Macy's partnership with Amazon Retail ad service raised eyebrows last year because partnering with your fiercest competitor feels risky. But at NRF, Michael [00:10:15] Kranz, the head of Macy's, RMN, did a great panel with Amazon Retail ad service and talked about how he's bullish on the results more than 175 new brands activated sponsored product campaigns in the first six months ~of that.~ [00:10:29] ~Um. ~[00:10:30] Of that partnership and his reasoning is really practical. Buyers can use the same Amazon ads, tools, and UI that they already know. Agencies can plug their existing. API based tech in and Macy's is [00:10:45] able to activate this tail and torso of advertisers without growing internal headcount. He said two retailers can actually collaborate in one space in digital media advertising and then also compete in another space. [00:10:59] So he's [00:11:00] pursuing this co-opetition model. wrapping up here, look, the doom loop is ultimately a choice. Retailers can continue playing hide and seek with their infrastructure and wondering why growth has stalled, or they can embrace a different model. One built on [00:11:15] transparency. Value creation and collaboration where it makes sense. [00:11:21] I would love to hear your thoughts. Please, hit me up on LinkedIn, find the article from today. I am sure there'll be a ton of comments in [00:11:30] there. I'd love to get the conversation going on this one. Thanks for tuning in and I'll catch you tomorrow. [00:11:35]