The Challenges for Retail Media in 2023 [Retail Media Works Report]

Retail Media Works, a leading voice in the retail media landscape, has identified seven pivotal challenges that retailers and advertisers are set to face in 2023. These challenges, gleaned from conversations with retailers, advertisers, analysts, and marketers worldwide, underscore the need for both retailers and advertisers to keep retail media firmly on their radar.

The ‘Peak of Inflated Expectations’ with Retail Media

The first challenge is the ‘Peak of Inflated Expectations’ with retail media. This concept, borrowed from Gartner’s Hype Cycle, suggests that retail media networks are currently at the zenith of inflated expectations. The Hype Cycle is a graphical representation of the life cycle stages a technology goes through from conception to maturity and widespread adoption. The ‘Peak of Inflated Expectations’ is followed by the ‘Trough of Disillusionment’, a phase characterized by waning interest as experiments and implementations fail to deliver. Retailers and advertisers must be prepared for this shift in sentiment and manage their expectations accordingly.

The Proliferation of Retail Media Advertising Networks

As more retailers recognize the potential of retail media, the number of retail media networks is set to increase. This expansion presents both opportunities and challenges. On one hand, it offers advertisers more avenues to reach their target audience. On the other hand, it could lead to market saturation and increased competition among networks, potentially diluting the effectiveness of retail media campaigns.

Does Retail Media Drive Incremental Sales?

This challenge questions whether retail media drives incremental sales. This is a critical concern for brands investing in retail media. While retail media can undoubtedly increase brand visibility and customer engagement, its impact on actual sales is less clear. Brands are increasingly looking to grow actual sales and are therefore preferring non-branded tactics, as pointed out by Russ Dieringer of Stratably. To address this concern and enhance sales performance, brands can leverage sales enablement tools that provide data-driven insights and strategies for optimizing the impact of retail media on sales growth.

The Role of Big Players in Retail Media

Companies like Apple and Kroger are making significant strides in this arena. Apple, for instance, generates $4 billion in annual revenue from its ad business and aims to grow this figure by offering a more personalized and franchise-focused ecommerce experience through its ShopDisney platform. Similarly, Kroger Precision Marketing is narrowing the top of the sales funnel using retail data, thereby widening the bottom of the funnel with retail media that consumers interact with every week.

Abstractions and Algorithms: The Role of the Digital Shelf

Another challenge is about the role of the digital shelf and visual CPQ  in retail media. The digital shelf is a dynamic entity, constantly changing due to abstractions and algorithms. This makes retail media a moving target, adding a layer of complexity to retail media strategies. Retailers and advertisers need to stay abreast of changes in the digital shelf and adapt their strategies accordingly. For example, it’s wise to stay on top of the latest social media management tools and strategies as the algorithms change almost daily.

Isn’t Retail Media just Shopper Marketing and Shelf Wobblers on Steroids?

Let’s talk about perception issue. Some may view retail media as simply shopper marketing and shelf wobblers on steroids. This perception can undermine the true potential and value of retail media. It’s crucial to communicate that retail media goes beyond traditional shopper marketing tactics and offers a more sophisticated and targeted approach to reaching consumers.

The Need for Standardized Metrics in Retail Media

There’s that need for standardized metrics in retail media. Retail media networks are still in their early stages, and brands need a credible story around data, use rich visuals to supplement the story, and insight to win over other brands. Metrics in retail media are not standardized and need to be addressed quickly for the industry to grow. The advent of new channels such as streaming TV, in-store retail media, and offline attribution data will all affect measurement. This calls for a concerted effort to develop and adopt standardized metrics across the industry.


In conclusion, 2023 is set to be a pivotal year for retail media. As the landscape evolves, retailers and advertisers must navigate these challenges with agility and foresight. By doing so, they can harness the full potential of retail media and drive meaningful growth in an increasingly competitive market. The challenges are significant, but so too are the opportunities. The future of retail media is bright, and those who can navigate these challenges will be well-positioned to reap the rewards.