Each year I write a ‘Seven Challenges for Retail Media’. My insights come from working with brand advertisers, Retail Media networks, AdTech vendors, industry bodies like the IAB & ISBA, as well as trusted analysts, industry stakeholders and friends, in the UK, Australia, New Zealand, France, Italy, Romania, Chile, Ireland, US, Canada, Turkey and Brazil.
The seven challenges are not predictions. Instead, they are ideas with nuance to help shed some light on Retail Media in 2025.
#1 Challenge: creativity in retail media
Everyone talks about audiences, targeting and data. But for all the noise about precision, targeting and measurement, something essential gets left out: the one word that dominates every other marketing forum — yet barely gets a mention in Retail Media — creativity.
‘Using first-party data to deliver personalised advertising in a closed-loop environment’ is the mantra of Retail Media disciples everywhere.
However, this mantra never discusses the content of said advertising: the creative.
Each environment — onsite, offsite, in-store — has its own constraints in terms of size, context and capability, so Retail Media creative must be thought of in each of these contexts.
A related challenge is that content is now abundant but the attention that we can allocate to it is finite. Since the resource allocated to advertising is attention, we must recognise that any discussion about ‘creativity in Retail Media’ must also acknowledge that that attention is not intention.
I want us to reframe our thinking about creative. We are not in the business of getting our advertising ‘out the door’. We are actually seeing the emergence of a new ‘behavioural grammar’ as Faris Yakob, author of Paid Attention: Innovative Advertising for a Digital World writes.
In other words, Retail Media is a new way of thinking about media – not just a space to ‘cut-and-paste’ creative from other contexts.
Take out: Retailers must stop treating creative as someone else’s problem. The brands that win are the ones that give it serious attention.
#2 Challenge: your strategy needs a strategy
Most strategy planning and thinking are based on one dominant idea; that the purpose of strategy is to achieve a sustainable competitive advantage.
This fundamental concept is not relevant for Retail Media networks as in the retail environment something always changes. The Retail Media environment is shaped by the dynamics of retail, innovations in AdTech and the vicissitudes of consumers.
For Retail Media Networks, a new way of thinking about strategy is required:
- Forget sustainable advantage: Scrap the pursuit of sustainable competitive advantage and instead pursue transient competitive advantages that can be found and exploited.
- Continually Adapt: Recognise that the only genuinely sustainable competitive advantage in a complex, changing environment is the ability to continually adapt.
- Test and Learn environment: Ensure experimentation is built in through instilling a safe-to-fail test and learn environment.
Take out: Scrap the pursuit of sustainable competitive advantage and instead pursue transient competitive advantages that can be found and exploited.
#3 Challenge: retail media is change management
Retail Media has to work across multiple teams and challenges existing structure. Brands have trade, shopper, brand and digital teams – each with different goals and different budgets. Retailers have merchandising, ecommerce, and tech teams – often with little experience in media or campaign delivery.
None of these groups are set up to work together by default, so new ways of working and strong internal leadership are required.
Take out: The challenges to Retail Media are organisational and people driven, not tech driven. Treat all Retail Media programmes on the brand and retailers’ side as having an inherent change management aspect.
#4 Challenge: search is still sexy
Retail Media generates a lot of headlines about connected TV, programmatic display and video. But sponsored search still drives most of the revenue. 80% of Amazon Advertising is still one advertising unit: sponsored product—and the same goes for any Retail Media Network that has a substantial online presence.
The way shoppers search is changing. Shoppers now type full questions or describe needs, and as a result, they expect results to feel more like advice than catalogue listings. New search technologies are coming through that deliver new algorithms that with better targeting and relevance which in turn increases CTR and conversions.
Take out: Understand how shoppers use search now, not how they used it five years ago. Existing approaches to search on retailer websites need to be updated.
#5 Challenge: The ‘Fermi Paradox’ of retail media: where are the CMOs?
There is a paradox: Retail Media is a huge market and growing fast, but CMOs are largely absent from the discussion.
The issue that Retail Media is often seen as tactical and CMOs don’t hear language in Retail Media conversations that match how they think about marketing. Retail Media does not use words like brand impact, mental availability, or long-term brand effects.
Take out: Retail Media Networks need to draw the link to awareness, consideration, and brand equity. Stop pitching performance metrics to brand leaders.
#6 Challenge: be the black box; beware the black box
A black box refers to platforms or algorithms where the internal ‘workings’ are hidden. Advertisers say they hate black-box platforms. Yet Google and Meta still dominate spend in most markets. Why is this? Because they’re simple to use. Advertiser can ‘press play’ to get an outcome.
Retailers want to compete but often offer complex Retail Media Networks with different engagement models with unclear outputs.
Take out:: Brands want – and need – easy-to-use solutions: Perhaps your RMN cannot deliver a perfect ‘black box’ like Meta, but it can at least offer turnkey, straightforward tools or solutions. Brands should NOT accept opaqueness, but still demand simplicity in terms of ease of use, comprehensiveness of solution.
#7 Challenge: The non-existent ‘War for Talent’
There’s no shortage of talent in Retail Media, despite what you might read. Instead, there’s a shortage of hiring that makes sense. Most Retail Media job specs did not exist five years ago, yet businesses still try to fill them using old ways of hiring and continually looking for unicorns with a combination of skills that simply do not exist.
Those hiring should recognise that there is no linear path into working in Retail Media and that the real problem in hiring is filtering out the right people just because they are not a unicorn.
Take out: Think about the traits, accomplishments and information overlooked by traditional recruiting methods. Look for potential and intrinsic motivation that can help shape the future.
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OPINION The seven challenges shaping retail media in 2025
Colin Lewis
Each year I write a ‘Seven Challenges for Retail Media’. My insights come from working with brand advertisers, Retail Media networks, AdTech vendors, industry bodies like the IAB & ISBA, as well as trusted analysts, industry stakeholders and friends, in the UK, Australia, New Zealand, France, Italy, Romania, Chile, Ireland, US, Canada, Turkey and Brazil.
The seven challenges are not predictions. Instead, they are ideas with nuance to help shed some light on Retail Media in 2025.
#1 Challenge: creativity in retail media
Everyone talks about audiences, targeting and data. But for all the noise about precision, targeting and measurement, something essential gets left out: the one word that dominates every other marketing forum — yet barely gets a mention in Retail Media — creativity.
‘Using first-party data to deliver personalised advertising in a closed-loop environment’ is the mantra of Retail Media disciples everywhere.
However, this mantra never discusses the content of said advertising: the creative.
Each environment — onsite, offsite, in-store — has its own constraints in terms of size, context and capability, so Retail Media creative must be thought of in each of these contexts.
A related challenge is that content is now abundant but the attention that we can allocate to it is finite. Since the resource allocated to advertising is attention, we must recognise that any discussion about ‘creativity in Retail Media’ must also acknowledge that that attention is not intention.
I want us to reframe our thinking about creative. We are not in the business of getting our advertising ‘out the door’. We are actually seeing the emergence of a new ‘behavioural grammar’ as Faris Yakob, author of Paid Attention: Innovative Advertising for a Digital World writes.
In other words, Retail Media is a new way of thinking about media – not just a space to ‘cut-and-paste’ creative from other contexts.
Take out: Retailers must stop treating creative as someone else’s problem. The brands that win are the ones that give it serious attention.
#2 Challenge: your strategy needs a strategy
Most strategy planning and thinking are based on one dominant idea; that the purpose of strategy is to achieve a sustainable competitive advantage.
This fundamental concept is not relevant for Retail Media networks as in the retail environment something always changes. The Retail Media environment is shaped by the dynamics of retail, innovations in AdTech and the vicissitudes of consumers.
For Retail Media Networks, a new way of thinking about strategy is required:
Take out: Scrap the pursuit of sustainable competitive advantage and instead pursue transient competitive advantages that can be found and exploited.
#3 Challenge: retail media is change management
Retail Media has to work across multiple teams and challenges existing structure. Brands have trade, shopper, brand and digital teams – each with different goals and different budgets. Retailers have merchandising, ecommerce, and tech teams – often with little experience in media or campaign delivery.
None of these groups are set up to work together by default, so new ways of working and strong internal leadership are required.
Take out: The challenges to Retail Media are organisational and people driven, not tech driven. Treat all Retail Media programmes on the brand and retailers’ side as having an inherent change management aspect.
#4 Challenge: search is still sexy
Retail Media generates a lot of headlines about connected TV, programmatic display and video. But sponsored search still drives most of the revenue. 80% of Amazon Advertising is still one advertising unit: sponsored product—and the same goes for any Retail Media Network that has a substantial online presence.
The way shoppers search is changing. Shoppers now type full questions or describe needs, and as a result, they expect results to feel more like advice than catalogue listings. New search technologies are coming through that deliver new algorithms that with better targeting and relevance which in turn increases CTR and conversions.
Take out: Understand how shoppers use search now, not how they used it five years ago. Existing approaches to search on retailer websites need to be updated.
#5 Challenge: The ‘Fermi Paradox’ of retail media: where are the CMOs?
There is a paradox: Retail Media is a huge market and growing fast, but CMOs are largely absent from the discussion.
The issue that Retail Media is often seen as tactical and CMOs don’t hear language in Retail Media conversations that match how they think about marketing. Retail Media does not use words like brand impact, mental availability, or long-term brand effects.
Take out: Retail Media Networks need to draw the link to awareness, consideration, and brand equity. Stop pitching performance metrics to brand leaders.
#6 Challenge: be the black box; beware the black box
A black box refers to platforms or algorithms where the internal ‘workings’ are hidden. Advertisers say they hate black-box platforms. Yet Google and Meta still dominate spend in most markets. Why is this? Because they’re simple to use. Advertiser can ‘press play’ to get an outcome.
Retailers want to compete but often offer complex Retail Media Networks with different engagement models with unclear outputs.
Take out:: Brands want – and need – easy-to-use solutions: Perhaps your RMN cannot deliver a perfect ‘black box’ like Meta, but it can at least offer turnkey, straightforward tools or solutions. Brands should NOT accept opaqueness, but still demand simplicity in terms of ease of use, comprehensiveness of solution.
#7 Challenge: The non-existent ‘War for Talent’
There’s no shortage of talent in Retail Media, despite what you might read. Instead, there’s a shortage of hiring that makes sense. Most Retail Media job specs did not exist five years ago, yet businesses still try to fill them using old ways of hiring and continually looking for unicorns with a combination of skills that simply do not exist.
Those hiring should recognise that there is no linear path into working in Retail Media and that the real problem in hiring is filtering out the right people just because they are not a unicorn.
Take out: Think about the traits, accomplishments and information overlooked by traditional recruiting methods. Look for potential and intrinsic motivation that can help shape the future.
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