Retail media was never meant to be simple. This bold new category converged commerce data, digital media and the in-store experience, and promised person-level targeting, closed-loop measurement and the ability to tie media investment to real shopper outcomes. But most of all, retail media offered something other channels couldn’t: proximity to the point of purchase, powered by a direct relationship with the shopper.
As the Boston Reporting Group put it back in 2021, “Retailers’ ability to access first-party data and ‘close the loop’ by identifying those who make a purchase after seeing an ad makes retail media a compelling new channel for advertisers.”
Yet, in the rush to stand up new offerings, retail media is at risk of being reduced to an oversimplified version of itself: a rebranded version of co-op, modeled too closely after broader media approaches, a turnkey ad channel with "retail" in the name but not in the mechanics. By prioritizing speed over structure, brands are treating retail media like a shortcut to ad revenue rather than a new kind of business and run the risk of degrading a winning long-term strategy for short-term gain.
What follows is a look at how that erosion is unfolding—and what it will take to restore retail media’s identity.
Retail media’s promise was never just about data—it was about identity. Identity made the category complex by nature. It required deep first-party data access, cross-functional orchestration and systems built to handle nuance.
As Meggie Giancola, senior vice president of CPG and Epsilon Retail Media sales, puts it, “Shoppers today are, more than ever, multi-retailer. The real value in retail media isn’t that the data a retailer is providing to brands is exclusive; it’s that the retailer knows the person behind the data. That’s what makes it actionable. Retail media sits at a unique intersection of intent, identity and immediacy.”
Retail media thrives when it enables retailers to connect brands with real shoppers in ways others can't.. “Audience comes first, and the channels are the means with which we speak to them," says Chloe Weber, senior product marketing manager at Epsilon. "Being everywhere, on all the devices, through person-level identity, gives us more chances to meet that audience. That gives you the most bang for your buck.”
Weber says that strong identity allows retailers to locate hand-raisers—shoppers actively in-market for a product or category—across all channels. Whether they’re researching online, browsing in-store or streaming content on connected TV, person-level identity enables retailers to meet shoppers with relevant messaging at the right moment. That kind of precision is what sets retail media apart from broader national tactics.
But unlocking that kind of omnichannel relevance takes commitment. And somewhere along the way, that commitment and identity fell to the wayside in the great retail media rush.
Over the past few years, as retailers raced to capitalize on retail media’s revenue potential, many leaned on the models they knew (co-op advertising and national media) to start piecing together the many parts required to build their own media business. The result? Retail media strategies that looked familiar but didn’t functionally differ from existing ad offerings.
Take for example, Amazon’s recent unveiling of Retail Ad Services. While aimed at helping other retailers build their own media offerings, the solution underscores how vulnerable it is to copy-and-paste thinking. When success is defined by replicating Amazon’s surface-level outputs rather than building around one’s own identity, the category within maymay lose its distinct value.
To solve for this lack of shopper identity, many retailers are backfilling it: retrofitting shopper data into tech not built to handle it or relying on proxies that don’t offer true person-level precision. The effect is a watered-down version of what retail media is supposed to be: specificity, but only against known purchasers and website visitors, focusing on "easy-to-identify" converters. Scale, but only through modeling outside of a retailer's shopper file and filling audiences with lookalikes who aren't nearly as relevant or premium an audience. And conversions, but only among shoppers who were likely to convert already.
So why aren't retailers keen on structuring their retail media with identity resolution built in?
“Retailers often think it’s going to be as easy as flipping a switch,” says Rebekah Davila, senior vice president of business transformation at Epsilon Retail Media. “What often gets underestimated is the level of alignment and connectivity needed across the entire organization to actually make it work.”
Organizational readiness and an understanding about the inherent complexity in building retail media with a person-level identity spine can sometimes be part of the problem, says Alexis Ulgenalp, director of onboarding at Epsilon Retail Media.
“Shopper identity has always been the draw of retail media,” Ulgenalp says. “The teams responsible for activation must also be aware and understand the importance of this. Otherwise, they may miss the mark.”
Shopper identity isn’t a plug-and-play feature. It benefits from thoughtful coordination across the organization and a shared understanding of the shopper—especially when retailers attempt to bridge online and offline behavior.
“If you want to be a high-functioning retail media program, and drive growth, you have to invest in all of it: the tech, the data, the organizational structure,” Ulgenalp says. “It’s not about doing one thing well; it’s about putting focus and resources behind everything, all at once.”
In response, brands have become increasingly skeptical. A lack of identity delivers inconsistent targeting, attribution and sales outcomes, leaving advertisers weary.
According to eMarketer, 55% of US advertisers view lack of measurement standardization as the top challenge within retail media platforms. Meanwhile, a 2023 ANA survey referenced by Marketing Dive found that 42% of brands now consider themselves “reluctant buyers” of retail media, citing concerns over transparency and limited performance benchmarks.
Identity, once the backbone of the promise, has become an afterthought, says Davila. And yet, brands still crave the benefits of identity.
“Everybody wants to do closed-loop measurement,” Davila says. “But do they all know exactly what that means or invest the time and energy needed to achieve it? Not always. Identity is a critical part of the equation, and it takes real alignment across the organization to get it right. Retailers don’t have to tackle it alone—when they understand where they’re strongest and where to lean on partners, they can build a retail media strategy that’s both uniquely theirs and built to last.”
The disconnect is clear: Brands expected identity-driven, outcome-focused media. But what they too often receive is standardized ad placements that may not reflect the depth of retailer-shopper connection. That gap confidence could create confusion around retail media’s unique value proposition just as the category hits its mainstream stride.
For retail media to deliver on its original promise, identity must return to the center—not only as a data capability, but as the organizing principle for the entire ecosystem. That means moving beyond surface-level integrations and embracing the structural complexity that retail media requires.
This includes investing in persistent, person-level identity resolution; ensuring interoperability across in-store and online touchpoints; and resourcing teams that can navigate the many layers of activation, attribution and optimization. As Giancola puts it, “Identity is the bridge. Some brands are great at understanding consumers. Some are great at activating. But identity is what connects those capabilities.”
It also means acknowledging that the complexity needed to build and maintain an identity spine for retail media isn’t a liability—it’s a moat. When a retailer gets identity right, it creates unique value not just for its own media business, but also for brands and shoppers alike. For instance, leveraged person-level identity to power a new unified attribution methodology, they were able to see the full picture of the impact of their impressions—no matter where they took place in the buying journey. As Giancola put it, “The most important thing to the future of retail media advertising is having a stable, future-proofed identity spine.”
Done right, retail media can offer something national media and co-op never could: true relevance, with real business outcomes to match. See what true identity-driven, intelligent retail media looks like.
