Retail media is booming in Europe. As the online advertising landscape evolves, brands are increasingly dependent on investing in retail media as a viable source of first-hand consumer data, and heavily rely on the collection of retailers’ monetised data to build their strategies and optimise their advertising investments.

This status quo needs to be challenged. To make the most of retail media, the industry will need to push for more standards and transparency in the data circulating – but the success of future brands will depend on more than just retail media data.

Why retailers are making a name for themselves in advertising

Retail media refers to the advertising on a retailer’s media network that a customer will encounter during their purchasing journey. With retail media, brands buy media space from retailers on chosen digital channels (website, app…) to create native or display ad campaigns that target customers at the point of purchase. Advertising on retailers’ platforms allows brands to target wider audiences directly in the retailer-specific environment where their products are sold. Retailers can then monetise the audience’s consumption data.

Retail media emerged in the United States in the early 2000s with Amazon and has since gradually established itself among brands and distributors as an essential part of their marketing strategy. According to a Statista study, spending on digital advertising in retail media in Europe could rise from €9.7 billion in 2022 to more than €25 billion in 2026. It grew by 15% in France in the first quarter of 2023, and several major retailers such as Carrefour and Lidl have recently launched their own offerings. In the UK, it is forecast to hit  25% growth in 2023 – the fastest area of growth in UK commercial media.

We’re currently in the “commerce media era”, where brands are being built using commerce data first – which they pay to access through retailers. Changes in the online landscape created positive tailwinds for this rise of retailers as the next great players in advertising. iOS14 updates, the abolition of third-party cookies, and the tightening of Europe’s GDPR makes targeting more difficult for brands and retailers sit on top of first-party data that they can easily monetise while consumers are less inclined to allow the collection of their data.

This combined with the soaring costs of online advertising, is reshaping the media mix for brands, who are favouring platforms – think Sephora, Amazon, and now Carrefour – that are as close as possible to the act of purchase and own a wealth of first-party data as a consequence.

Guaranteeing data transparency and standardisation as we enter the commerce intelligence era

To make the most of the existing data, brands will have to overcome certain hurdles.

Firstly, the unbalanced relationship between retailers and brands. The former have negotiating power that can leave the latter with little room for manoeuvre when it comes to the commercial development of their products. In the case of retail media, brands tend to accept all the conditions imposed by retailers and agree on a dedicated overall budget, with no real say in how the latter will be allocated to the various advertising or promotional operations.

Secondly, the consumer and purchase data collected by retailers still majorly lives and is measured in silos on different retailer platforms. This means that the parties involved aren’t on the same page when it comes to performance evaluation. As a result, brands lack visibility over the performance and revenue generated by their investment and can’t neutrally benchmark data when comparing Amazon and Carrefour, or Pinterest, Instagram and Snapchat, where most of their audience and community are found. Moreover, retailers’ monetisation of the data that brands depend on can result in biased results. Third-party governance therefore needs to come to life in retail media to help brands make the most of it, by implementing standards and verifying metrics.

As the retail media offer multiplies, brands will continue questioning the optimisation of their marketing and advertising strategies: how can performance be measured and improved? What data is available? How do they compare with their competitors? How much of their budget should be dedicated to retail media? And which partners should they be going to to help?

While retail media is valuable, it is not the be-all and end-all for brands. Their future lies in commerce intelligence, which will allow brands to build their success on top of the combination of media, commerce, psychographic, and demographic data.

The surge in retail media is therefore an opportunity for brands to look ahead. In the commerce intelligence era, their success won’t depend on retailers-owned commerce data, but real-time consumer data that shows how consumers shop, and identify, what their needs and wants are, and what drives their purchasing decisions.

To do this, brands must take advantage of the tools and platforms that provide real-time data analytics for them to understand effectiveness across all channels and retail media groups, but, most importantly, that allow them to compare effectiveness and performance with a holistic approach to data.

• Rachel Tipograph is the CEO of MikMak, a provider of e-commerce enablement and analytics software for multichannel brands to convert global customers.