Harnessing the true power of Retail Media: 10 pitfalls to avoid

Executed effectively, retail media projects can be a boon for both retailers and consumer packaged goods (CPG) companies, offering targeted advertising opportunities and additional revenue streams which keep both customers and finance teams happy. The industry narrative is surfing the momentum, creating exciting opportunities and a “yes, we can” attitude to everything that is retail media.

However, numerous challenges can arise which can lead to project failure or underperformance if not effectively addressed. Having led many successful retail media projects all over the world with retailers at different phases of maturity, our extensive network of professionals* have invaluable experience of what works, and most importantly, what doesn’t.

Let's delve into the key factors that can make or break a retail media project - and how you can mitigate the risks.

1. 1. Lack of clarity in collaboration with commercial teams
      One of the fundamental issues is the lack of clear guidelines distinguishing commercial and retail media. Without delineating these areas, confusion arises as to how retail media contributes to additional revenue from CPGs beyond the existing trade marketing investment and secondary margin the retailer has already in place. To avoid this, establish clear guidelines - both in terms of asset perimeter and ways of working - to engage retailer commercial and buying teams to advocate for your retail media initiatives, while retaining their contributions.
   2. Neglecting customer impact
      Focusing solely on monetisation revenue overlooks the broader impact on customer engagement and category sales uplifts. Striking a balance between maximising the opportunity to monetise while still following a customer-centric approach is essential to ensure the customer experience doesn’t suffer. Additionally, failing to leverage customer data, limits the effectiveness of retail media campaigns. Protecting sales data for negotiation reasons shouldn't hinder the utilisation of valuable customer insights.
   3. Misalignment of KPIs
      Failure to align campaign objectives with measurement KPIs can skew perceptions of success and create problems when securing future investment. While CPG brands and media agencies want insights into media effectiveness, retailers should be able to provide complementary standardised solutions, while monetising advanced insight separately. Ensure that KPIs accurately reflect different campaign goals (e.g. awareness, consideration, conversion) and are aligned with industry standards for effective evaluation.
   4. Sales strategy faults
      Sales planning requires a standardised pricing model, accurate forecasting, awareness of revenue phasing, key advertisers in the industry and innovative media agencies. Failing to consider factors such as pilot testing and brand investment can lead to unrealistic projections. Additionally, poor market information and disparate proposals from suppliers can hinder effective sales planning.
   5. Other planning pitfalls
      Insufficient market research, late go-to-market processes, and overlooking benchmarking are common planning pitfalls. Clear principles need to be established for retail media product expansion and benchmarking data should be leveraged to assess performance and plan future activations effectively. Additionally, conducting RFPs for media fulfilment partners and implementing workflow tools can streamline operations and minimise errors.
   6. Store operational challenges
      In-store operational challenges, such as franchisee decision-making bottlenecks and unclear store management guidelines, can impede campaign execution, creating additional work for campaign management and causing frustration for CPG brand clients. Ensuring good communication with store managers and understanding their priorities is crucial for successful in-store campaigns.
   7. Underrating the technology
      The lack of an efficient platform to manage campaigns end to end can severely hamper retail media project success. Without investing in comprehensive tools, campaign management becomes cumbersome, sales insights lack transparency, and delivery becomes prone to errors. Poor communication on billing can lead to client dissatisfaction and mistrust, while the lack of workflow tools increases the risk of inefficiencies and mistakes. Overall, neglecting to prioritise efficient platform operations undermines the effectiveness and viability of retail media initiatives.
   8. Complexity of partnerships
      Engaging multiple partners for different media channels can introduce complexity for CPG brands. While leveraging various partners can spark innovation, it also requires CPGs to engage with different contacts for advertising space. Streamlining partnerships and communication channels can mitigate these challenges.
   9. Underestimating the importance of specialised skills
      Relying solely on retail media asset quality or retailer reputation and existing relationships isn’t enough to guarantee the success of your retail media offering. In today's competitive market, proactive sales efforts are crucial. Investing in a professional sales team or including retail media commitments in annual negotiations with CPG supplier brands ensures active promotion and sales. This approach is vital for showcasing retail media's value and maximising revenue.
   10. Talking trade, without learning the media language
       Retailers traditionally focus on trade marketing metrics and distribution discussions. However, engaging with marketing, brand teams, and media agencies introduces new dynamics. To compete with traditional and digital media platforms and unlock revenue streams, aligning your narrative with industry standards is crucial. By resonating with broader media industry narratives, you can bridge communication divides, elevate your retail media project, and tap into new budgets, creating value for your business and the media industry.

If there is one thing our retail media experts* have learnt, it’s that successful retail media projects require careful planning, clear communication, and a customer-centric approach. By addressing these key factors upfront and implementing effective strategies, retailers, CPG brands and media agencies will be set up well to maximise the potential of retail media initiatives and drive mutual success, while creating better experiences for their customers.

*It’s important to acknowledge the collaborative nature of this article, with gratitude to all contributors for their expert inputs: Adina Campeanu (Media Client Manager, USA), Andras Juhasz (Media Client Manager, Middle East), Susan Leydon-Hargreaves (Media & Customer Engagement Consulting Manager, EMEA), Eoin Maguire (Media Client Manager, Ireland), Marco Metti (Media Client and Sales Manager, Italy).