Getting Your Retail Media Network House in Order

Introducing A New Growth Engine Inside Retail

Amazon Ads, Walmart Connect and Target Roundel have something big in common: they’re all retail media networks (RMNs).

RMNs are retailer‑run advertising platforms that let brands reach shoppers using the retailer’s own data and digital channels. They’re growing fast and reshaping how marketers reach customers.

For retail leaders, this growth brings new challenges and considerations to take into account when standing up, scaling and integrating RMNs into existing commercial models.

Why Retail Media Networks Matter Now

The demand for RMNs has skyrocketed in recent years. According to recent MarketDive research, 58% of U.S. marketers are working with at least five RMNs—in comparison to just 18% of marketers in 2022. As a result, RMNs are getting more funding: 68% of global marketers believe that RMNs will play a bigger role in their media mix, and only 2% plan to lower spending. And this year, nearly $70 billion dollars will go towards retail media as a whole—an 18% YoY change (E-Marketer).

One big driver of this increased investment is the depreciation of third-party cookies. With an increase in data privacy and major websites like Google moving away from traditional third-party data collection, marketers are being forced to find new ways to learn about current and prospective customers. Fortunately, RMNs can fill this gap easily.

For example, consider a shopper who is a part of Target’s Red Circle program. Target’s RMN, Roundel, has direct access to that customer’s spending patterns and can essentially recreate a picture of who that customer is. Now, zoom out and think about the millions of members enrolled in any loyalty program like Target Red Circle. RMNs can work with marketers to provide first-party data on their target audiences, enabling brands to reach and better understand their target audiences.

It’s clear that RMNs are becoming more relevant for marketers. However, growth is also exposing structural tensions that most retailers aren’t prepared to manage.

The Natural Tension Between Physical and Digital Spend

As marketers turn their attention to RMNs more, there’s a growing concern that investments in these digital platforms will take away from a merchant’s physical arm.

Historically, marketers would spend their money primarily through physical store promotion. If you’re a marketer at Nike, you might invest in physical retail by securing premium end-cap placement, rolling out branded in-store displays or partnering with a high-profile athlete to drive foot traffic.

Now, marketing organizations have the option to redirect their funding to digital platforms like RMNs. Therein lies the tension for marketers, who now must determine:

1. Where is money better spent?
2. Which channel delivers the strongest return on investment
3. Which offers the greatest reach?

Key Point: RMNs aren’t designed to take away from physical spend—they’re looking to augment it.

The goal is to increase funding for RMNs without taking away from physical spend, because part of the value proposition with an RMN is that spending more on digital can ensure that you’re targeting the right consumers. At the same time, physical retail remains critical for brand presence, product discovery and conversion at the shelf—reinforcing the overall merchant strategy.

Even if this tension exists, it’s best to remember that digital spend and physical spend can and should work in tandem for a merchant’s overall goals. To do this, retailers have to optimize RMNs to make sure that they’re best positioned to deliver value for merchants.

Beyond Sales Compensation: The GTM Challenge Facing RMNs

RMNs must navigate a tightrope dance with merchants and retail organizations. With merchants, the goal is not to harm the brand while making money. For retail organizations, RMNs are new to their company, meaning retailers must figure out how to structure the go-to-market (GTM) structure to work best for this new entity.

From what we’ve seen, RMNs often start by focusing on sales compensation because it is the most immediate and visible problem as new roles, quotas and incentives are stood up quickly. Compensation is the natural entry point, but it shouldn’t be seen as the full solution.

To truly deliver value to marketers and scale sustainably, RMNs need to address the whole go-to-market model. Based on our experience, here are five GTM imperatives that RMNs must consider:

1. Refine Value Proposition and Roles of New Revenue Stream: Clearly define how the RMN creates value and how each role contributes to revenue, so sales and marketing teams are aligned as well as effective.
2. Ensure The Deployment of Resources Across New Roles: Design and align roles to support new selling motions and keep teams focused on products, processes, and customers.
3. Formalize GTM Processes to Adapt Multifaceted Selling Infrastructure: Allocate the right resources to the right channels so investments are aligned to priority customers and partnerships.
4. Align Comp Plans to Points of Influence and Desired Outcomes: Align compensation to new sales motions so sellers are rewarded for the behaviors that drive results.
5. Formalize Competencies and Recruitment Strategy: Update talent profiles, enablement tools and success metrics to support new RMN roles and revenue motions.

From Tactical Fixes to a Scalable GTM Model

Despite being a relatively new concept, retail media networks (RMNs) are becoming increasingly valuable for retailers and marketers alike. To take advantage of growth opportunities, RMNs have to make sure their GTM-house is in order.

While many RMNs begin by addressing sales compensation, long-term success depends on rethinking the entire commercial model—from roles and coverage to incentives and integration with the merchant organization.

Alexander Group helps RMNs move beyond tactical fixes and build go-to-market models designed for sustained performance in a rapidly evolving retail media landscape.