Retail Media’s Next Chapter: Adapt, Innovate, or Get Left Behind

Co-Authored by Dustin Cochart, MBA

Retail media is at a crossroads. What started as a booming $18.8 billion business just four years ago has now ballooned into a $54.9 billion juggernaut. But with that growth comes turbulence. The number of Retail Media Networks has tripled since 2020, reaching 94 retail media networks, creating a fragmented and highly competitive landscape.

What was once seen as an easy revenue stream has become increasingly complex and costly. Retailers are now under pressure to differentiate, control operational expenses, and adopt new technologies to stay ahead. Meanwhile, brands expect more than just media placements. They want first-party data, closed-loop measurement, and deeper shopper insights to prove their investments are driving real impact. However, without standardized measurement frameworks, comparing retail media network performance remains a challenge.

Not every retail media network will make it through this shift. dentsu 's 2025 Retail Media Industry Report predicts consolidation, with only the strongest, most differentiated ones surviving.

Retailers Must Balance Growth and Profitability

Scaling a retail media network is proving to be far more challenging and less profitable than many retailers initially expected. As competition intensifies, retailers are struggling to build and retain specialized teams with expertise in retail, media, and analytics. Finding the right talent is expensive, and as brands demand more sophisticated solutions, the need for expertise in data science, ad operations, and measurement is only growing. At the same time, technology costs are mounting as retailers invest in automation, AI, and data solutions, but balancing these investments with efficiency is becoming increasingly difficult.

On top of that, brands are demanding greater transparency, standardized reporting, and lower CPMs, all of which are squeezing retail media profit margins. Simply selling ad space is no longer enough. Retailers must prove incrementality, efficiency, and value beyond media placements. The ones that win will be those who leverage AI-driven automation, forge strategic technology partnerships, and diversify revenue streams with data products and audience insights. Those who fail to optimize costs and deliver measurable impact will quickly find themselves losing ad dollars to retailers that make it easier for brands to buy, measure, and scale.

To navigate these challenges, retailers are looking for cost-effective ways to scale, including:

• AI and automation with 86% of retail media networks now using AI for campaign optimization, audience segmentation, and media planning.
• Retail media networks are shifting towards specialized technology partners (like Trade Desk and PromoteIQ) rather than defaulting to enterprise solutions like Google or Amazon.
• 45% of retail media networks now generate over 40% of their revenue from non-media offerings, including data products, audience insights, and creative services.

Retailers who fail to optimize their cost structure risk getting squeezed out of the market.

Scaling without sacrificing profitability is no easy feat. Learn how top players are managing both.

Complexity Is Now the Biggest Threat to Retailers and Brands

Retail media is no longer a simple game of placing ads on a retailer’s website. Brands now expect omnichannel integration, cross- retail media measurement, and seamless buying experiences. Unfortunately, retailers are struggling to deliver.

Retail media is becoming harder and more expensive for brands to manage. As investments scale across multiple retail media networks, brands and agencies are struggling with fragmentation, inconsistent measurement, and rising operational costs.

The biggest pain points include:

• Fragmentation across retail media networks with each retailer having different reporting, attribution, and audience segmentation, making it nearly impossible for brands to compare performance and optimize spend effectively.
• With retail media budgets sitting across eCommerce, shopper marketing, and brand teams, it creates inefficiencies and misaligned goals.
• Data interoperability issues due to different lookback windows and revenue attribution models, brands struggle to unify results across retail media networks, impacting investment decisions.

Brands are demanding greater transparency, flexibility, and seamless reporting, and retail media networks that don’t deliver will see budgets shift elsewhere. Retailers who prioritize standardization, interoperability, and automation will attract more investment.

Most importantly, automation and cross-platform integration must improve. The lack of standardization is driving up execution costs, forcing brands to hire additional personnel just to manage reporting and campaign execution. Retailers who invest in self-service tools, automation, and cross-platform reporting will remove friction and make their networks easier to scale.

Technology Is Reshaping Retail Media But Retailers Must Choose Wisely

Technology is the foundation of every retail media network, but choosing the wrong tech stack can be an expensive mistake. Many retailers rushed into retail media with quick-fix solutions—either building everything in-house or relying on a single ad tech provider—only to find themselves stuck with rigid, hard-to-scale systems. Now, as retail media expands beyond onsite search and display into offsite, in-store, and omnichannel activations, retailers need a more flexible, future-proof approach to technology.

That’s why many are shifting to a "buy-and-partner" model, integrating best-in-class technologies for different functions rather than relying on a single provider. Today, retailers are:

• Building their own CRM and shopper data solutions to maintain control over first-party data.
• Partnering with external platforms for media inventory, ad serving, and creative production instead of developing them in-house.
• Investing in automation and AI to optimize campaigns, improve targeting, and personalize shopper experiences at scale.

But technology alone isn’t the answer. AI and automation only work when built on high-quality, well-structured data. Without proper data governance, even the best tools fail to deliver reliable insights.

Retailers also need flexibility. Retail media is evolving too quickly for retailers to be locked into rigid, walled-off systems. This is why composable commerce is becoming the preferred approach. Instead of relying on a single, monolithic platform, retailers should be building modular, API-driven ecosystems that can integrate new media formats, audience insights, and measurement solutions as needed. This approach makes it easier to scale, adapt, and innovate without costly overhauls.

However, many retailers are still tied to legacy tech stacks that limit their ability to evolve. To break free, retailers must work with tech-agnostic partners. Partners that integrate across multiple DSPs, ad servers, and measurement tools rather than forcing everything into a proprietary system. This shift will help retailers future-proof their retail media business, making it easier for advertisers to compare performance across retail media networks, optimize investments, and allocate spend efficiently.

Beyond tech infrastructure, measurement remains one of the biggest challenges in retail media today. The industry still lacks a standardized, cross-platform framework for attribution and incrementality measurement, making it difficult for brands to assess retail media performance within their broader marketing mix. Retailers who provide transparent, closed-loop measurement and standardized reporting will gain a competitive advantage.

Click Here to read dentsu's 2025 Retail Media Industry Report

How Retailers Can Overcome Retail Media’s Biggest Challenges

To stay competitive, retail media networks need a clear game plan for tackling fragmentation, cost pressures, measurement standards, and technology adoption. 

Here’s a breakdown of actionable steps retailers can take, along with how New Stream Media can help. New Stream Media, dentsu's retail media solution that helps retailers build, optimize, and scale their retail media networks,