GUEST COMMENT How do you solve retail media’s fragmentation problem?

One of the biggest challenges facing retail media right now is the rapid fragmentation of the market. Claire Trbovic, Global Head of Product at SMG offers some insights

As more Retail Media Networks (RMNs) launch, the marketplace is becoming increasingly overcrowded. Rather than creating more choice and opportunity, instead what we’re seeing is increasing complexity. Advertisers are responding in the only way they realistically can by consolidating spend across a smaller number of larger partners that are easier to manage and scale.

The consequence to this is it has led to smaller and niche RMNs, many of which offer valuable, highly differentiated audiences, being squeezed out. 

Without a more efficient way to access and activate across the full landscape, retail media risks falling short of its potential. At the same time, the dominance of major tech platforms like Amazon remains largely unchallenged, leaving brands with fewer meaningful alternatives.

While collaboration or consolidation between RMNs may eventually emerge, it is unlikely to happen quickly, or at the scale required to shift the balance of power. What’s needed is a fundamentally smarter route to market.

The real problem: fragmentation on both sides

Fragmentation in retail media isn’t just a supply-side issue, it’s a demand problem too.

On one side, an influx of new RMNs, particularly from new retailers, has created a crowded and highly fragmented marketplace. Each RMN operates as its own silo, requiring separate integrations, planning approaches, and reporting frameworks.

On the other side, buyers are being asked to navigate this growing complexity. Managing hundreds of ‘mini walled gardens’ is operationally unsustainable, creating friction at every stage from planning and activation through to optimisation and measurement. Inconsistent data and non-standard metrics only add to the challenge. This forces buyers to prioritise efficiency over reach, limiting the flow of investment across the wider ecosystem.

Learning from digital publishing

Retail media isn’t the first sector to face fragmentation. Digital publishing has already navigated this shift by fundamentally rethinking how inventory is structured and traded, preserving publisher-level control. 

Publishers moved away from treating all impressions equally, instead segmenting premium and remnant inventory, and balancing guaranteed buys with programmatic demand. This protected high-value placements while improving fill rates across long-tail inventory.

The introduction of supply-side platforms created multiple routes to market, bringing greater control, competition and efficiency. It also accelerated standardisation in formats, pricing and measurement.

Retail media is still earlier in this curve. The opportunity isn’t just aggregation, but advancing buying models that balance control with scale, creating more transparency and a clearer, more comparable view of performance across networks.

A smarter route to market: access, not endpoints

Solving fragmentation starts with a mindset shift. The industry needs to stop thinking in terms of destinations and start thinking in terms of access. Rather than building more individual endpoints (RMNs, platforms and interfaces), what’s needed is a streamlined entry point: an inventory-agnostic access layer.

In practical terms, this would function as a unified interface through which agencies can access any RMN or commerce platform, across all formats and channels, without needing to navigate each one individually. One entry point to multiple sources of supply.

This would reduce operational complexity for agencies, increase accessibility for smaller RMNs, and offer greater flexibility in campaign execution.

But access alone isn’t enough. To truly solve fragmentation there also needs to be a clearer understanding of inventory value, from increasing frequency to reaching bespoke audiences. This requires a structured approach to categorisation: grouping RMNs based on attributes such as audience type, inventory quality, vertical specialism, and performance metrics. This would enable agencies to make informed allocation decisions, while retailers retain control over what inventory they surface and how it is priced.

This balance is critical. Buyers control how budgets are allocated and retailers control what they make available. Neither side loses ownership, and both benefit from shared access.

Beyond digital: The omnichannel opportunity

If implemented correctly, this exchange model doesn’t stop at onsite or offsite digital media but could evolve into a fully omnichannel access layer incorporating in-store screens, digital display, first-party data activation, and even near-store or out-of-home inventory.

This is where retail media’s real strength lies in its proximity to purchase. Connecting in-store and near-store environments with digital activation creates a far more compelling proposition than siloed channels ever could.

It also opens the door to integrating adjacent media sectors like programmatic DOOH and radio into commerce-driven campaigns.

Co-operation and co-ordination are key

Retail media is at an inflection point. If fragmentation continues unchecked, the industry will become less competitive, smaller players will struggle to scale, agencies will continue to simplify their approach, and dominant platforms will continue to consolidate their position.

With retailers more open to collaboration, introducing an agnostic ‘exchange’ platform which supports the whole market by making inventory more accessible and standardising measurement will rebalance the media landscape and unlock true competition.

An exchange model isn’t a silver bullet, but it is a credible path forward.

Author

Claire Trbovic is Global Head of Product at SMG