5 Challenges Facing Retail Media 

Only 41 percent of retailers find the current process for selling and buying retail media efficient. This insight has prompted discussions on how to continue its development, what’s working well, and where the major pain points exist. To succeed, retailers must address five critical challenges halting progress on retail media’s potential:

1. Internal Politics and Change Management

Retail media faces hurdles in demonstrating its value to the broader business as an additional revenue stream and enhancing the customer journey. While most stakeholders are convinced of its worth, it's paramount to persuade them to invest time and resources, embrace innovative ideas and formats online and in-store, and make changes to their current ways of working. Creating a simple framework that requires little manual intervention and case-by-case approvals will help resolve this challenge.

2. Technology

Within an organization, most campaigns involve multiple channels, each with its preferred platforms, workflows and data points. This complexity leads to a need for technology. However, determining whether to buy, build or implement a composable hybrid solution can be overwhelming for retailers. Considerations such as time, resources, customization benefits and intellectual property ownership are key to decision making, as are speed-to-market, product road map and configurability.

3. Leveraging Data and the Challenge of Attribution

Additionally, retailers recognize the importance of harnessing their data to scale and distinguish their offerings around areas such as insights, campaign planning, audience targeting and measurement. This is becoming an urgent requirement amidst the declining value of third-party data and the rise of new omnichannel strategies. However, the volumes of relevant data across disparate data sources and platforms make orchestrating data centrally highly challenging.

Addressing attribution issues is likewise crucial. Current practices yield duplicated attribution across platforms, hindering a unified view of the customer’s journey. Retailers must manage their customer and campaign data within cloud-based environments and consolidate customer-level exposure data across channels.

4. Scaling at Pace

Every retailer wants to grow, but no one’s growing as quickly as they’d like. It can be highly challenging to scale revenues without increasing the workforce at the same rate. Extracting retail media funds is especially challenging based on the industry. Additionally, scalability is hindered by inadequate expertise within organizations and the broader market. Given the novelty of retail media, finding individuals well-versed in both media and retail proves challenging.

To grow revenues, retailers should begin to utilize intelligent automation. Such technology can streamline manual processes and customize user journeys for internal users, empowering self-service users. Meanwhile, collaborative data aggregation could enhance scaling efforts, with retail media advertising piquing the interest of nonindustry-specific suppliers for expanded outreach.

5. Unlocking Brand/Agency Budgets

To continue scaling revenues, leaders must separate retail media from trade media to build trust in their effectiveness. This requires presenting more standardized and transparent solutions to the market.

This enhanced proposition, combined with retail media’s cost effectiveness and ability to deliver return on ad spend (ROAS), should unlock incremental revenues from brands and agencies. Additional key requirements from the market are for campaigns to be implemented promptly and accurately and for campaign measurement to be available in near real time to quickly optimize and compare with other media.

The Role of Retail Media

Despite its robust potential, retail media’s efficacy hinges on resolving these inherent challenges. Addressing such issues is the key to successfully fulfilling its role as an engagement channel and improving brand awareness.

Diana Abebrese, principal, business consulting, and Liz Salway, principal, business consulting at EPAM Systems, a provider of software engineering and product development services.