Debunking the Myth That Retailers Have a Demand Problem in Retail Media

In the early days of retail media, retailers were told all they needed was to get an on-site ad server and the advertisers would come. “Build it and they will come.” However, they didn’t come in the waves promised.

Now retailers are being told to plug in demand channels and the revenue will flow — another simple solution to a complex challenge. But many are falling into this trap only to be disappointed once more. Why? Because this "solution" isn't just an oversimplification, it’s fundamentally wrong.

1. Retailers Don’t Have a Demand Problem. They Have a Sales Problem

The majority of retail media revenue doesn’t come from non-endemic advertisers or brand-new relationships. It comes from endemic brands that already trade with the retailer every single day. These brands already have direct commercial relationships, long histories, and clear incentives to invest.

Retailers don’t need a third party to unlock demand. What retailers need is a high-performing sales team that can convert existing supplier relationships into advertising investment. Demand isn’t out there somewhere. It’s right in front of them.

2. Trade + Media = The Power Combo

Today, too many retailers run trade and media teams as separate units. But this is hindering progress. To run a retail media network that really works for both brands and retailers, these two teams need a shared understanding of the value they bring, creating a unified approach to retailer-supplier conversations that informs integrated planning cycles and alignment on incentives and targets. Without this, networks won’t scale.

Retailers that bridge this gap consistently outperform those that don’t.

3. Beware Anyone Promising On-Tap Demand

If someone tells you they can deliver unlimited incremental demand at the push of a button, be wary.

Ultimately retail media is still retail. It requires strategy, coordination, salesmanship, and operational excellence. There are no shortcuts. Anyone selling a magic pipeline is offering simple solutions to complex, structural challenges. And as the saying goes, if it sounds too good to be true, it probably is.

4. Who Actually Advertises Today?

If we’re honest, most retailers have a low percentage of suppliers actively investing in retail media. And those that do tend to be the big suppliers, which have media budgets and established agency relationships.

The untapped opportunity lies in unlocking the long tail of suppliers. It’s been reported that third-party sellers on Amazon.com spend as much as 127 percent more on sponsored ads than big-budget first-party brands. But the reality is that this long-tail revenue won’t be accessed by taking the easy route many "experts" suggest pitching to large Holdco agencies. These brands often use independent agencies or no agency at all. Their real decision-makers sit in the commercial teams that already engage with the retailer.

Retailers Don’t Need More Demand. They Need Better Alignment.

The next wave of retail media growth won’t come from new channels or new acronyms.

It will come from smart strategy that prioritizes integrating trade and media teams, and boosting the sales function. Once these teams are in place, retailers can hone in on the underserved suppliers that represent real opportunity.

Even then, realistic expectations are crucial. It will need hard work and no shortcuts, but it will be worth it. After all, retail media isn’t suffering a demand shortage. It's dealing with a conversion opportunity that hasn’t been fully realized.

Dan Sands is director of EMEA, Zitcha, a unified omnichannel retail media platform.