The allure of retail media is not lost on anyone with a finger on the pulse of the advertising world.

Especially for retailers, retail media networks have become a beacon of profitability in a sea of rising operational costs.

But what does this mean for the industry at large?

In this video interview with Beet.TV, Drew Cashmore, the GM of Adaptive Retail Group, offers a view.

A Profit Center in Digital Retail

“Retail media networks started as a profit sign, designed to offset the cost of building an e-commerce solution or paying for new innovation models,” explains Cashmore.

His insights are shaped by over a decade of experience at Walmart, where he witnessed the transformation of retail media from a mere cost-offsetting tool to a robust customer-centric advertising platform.

He has witnessed its evolution from a publisher-like experience to a more data-centric approach. “They found out they could be growth engines and do amazing things with just the data alone,” he asserts.

How Many Networks Can the Market Sustain?

Adaptive Retail Group is a company providing services geared towards assisting retailers in adapting to changing market demands through digital transformation strategies.

The group offers expertise in areas such as data analysis, personalized marketing, and omnichannel retailing, helping businesses to enhance customer experience and drive sales.

“There are a hundred retailers in the US that are generating over $10 billion in GMV, so the addressable market is massive,” Cashmore points out. He believes that if retailers build even a decent platform, they can earn about 1% of their GMV in advertising dollars.

However, he acknowledges a natural cap due to brand management limitations. Research suggests that brands can manage about six retail media networks, indicating a need for consolidation and network approaches.

Peering into the future, Cashmore predicts significant changes. “I think you’re going to see some type of play in consolidation at a network level,” he asserts.

He also anticipates advancements in AI and a move towards more sophisticated selling strategies. This shift could allow new players to use past learnings to leapfrog incumbents, creating a dynamic and competitive marketplace.

You’re watching “Retail Media: Let’s Talk Shop,” a Beet.TV Leadership Series at Shoptalk 2024, presented by Epsilon. For more videos from this series, please visit this page.