Retail Media Infrastructure Key to Winning Market Share, Says The Drum

What's Happening?

The Drum reports that the future of retail media will be determined by infrastructure rather than advertising. As retail media becomes a significant growth channel, with U.S. ad spend expected to exceed $60 billion this year, the focus is shifting from traditional advertising to the importance of clean, compliant, real-time data. Major players like Amazon and Walmart have already established dominant positions with their closed ecosystems. However, other retailers face challenges due to fragmented networks and outdated client-side setups. MetaRouter, a company specializing in customer data infrastructure, is highlighted as a potential solution to these challenges by offering server-side tracking that consolidates data efficiently. This approach allows retailers to maintain control over their data while enabling brands to reach consumers across various shopping platforms.

Why It's Important?

The shift towards infrastructure in retail media is significant for both retailers and brands. For retailers, adopting robust data infrastructure can enhance their ability to compete with giants like Amazon and Walmart by providing a seamless and efficient advertising ecosystem. For brands, this shift allows for diversification beyond the major platforms, enabling them to reach consumers across a broader range of retail networks. This diversification is crucial as it reduces dependency on a few dominant players and spreads risk. Additionally, the standardization of measurement and the convergence of commerce media are expected to provide clearer insights into advertising effectiveness, benefiting both retailers and brands in their strategic planning.

What's Next?

The retail media landscape is expected to undergo consolidation, with the current 200+ networks potentially reducing to a more manageable number. This consolidation will likely create opportunities for mid-tier players who can effectively implement the necessary infrastructure. Retailers are encouraged to act swiftly to adopt clean, compliant, real-time data systems to remain competitive. Brands will need to continue exploring partnerships with credible retail media networks to maintain their reach and effectiveness. The focus will be on infrastructure, interoperability, and leveraging first-party data to gain a competitive edge.

Beyond the Headlines

The emphasis on infrastructure over advertising in retail media highlights a broader trend towards data privacy and control. As regulators increase scrutiny on data practices, retailers and brands must navigate the balance between effective advertising and consumer privacy. The move towards server-side tracking and first-party data ownership reflects a growing need for transparency and accountability in data management. This shift could lead to long-term changes in how retail media is structured, with potential implications for consumer trust and engagement.