What is retail media actually for? The question every retail CEO needs to answer first.

Most retailers skip this question entirely. They see retail media as an opportunity to generate extra revenue, appoint someone to lead it, bring in some technology, and start selling. That's understandable - the market is moving fast and the numbers are attractive. But skipping the question is also one of the most reliable ways to end up with a retail media operation that wastes time, creates internal friction, and never quite delivers what it promised.

Before you build anything, you need to answer one question: what is retail media actually for in your business?

When revenue becomes the whole strategy 

The most common answer, whether verbalised or not - and the most limiting - is extraction.

Retail media as a way to get more money out of suppliers. A new mechanism to charge for access, visibility, and data. A revenue line that looks attractive precisely because the suppliers are already there and already dependent on the relationship.

Revenue generation is not necessarily the wrong answer. A CEO could quite reasonably decide: “I want retail media to be a high-margin revenue stream.” But it’s not a strategy. 

Revenue cannot be the strategy for a simple reason: it keeps retail media in the same transactional frame as traditional trade marketing. The retailer with the power, the supplier paying the tax. And while that model generates short-term revenue, it doesn't build anything. It doesn't strengthen the retail business. It doesn't deepen supplier relationships, it strains them. And it treats retail media as a project, rather than a business to invest in.

The practical version of this is the boardroom moment I've sat in more than once: someone shares that advertisers are seeing good returns on ad spend, and the immediate question is "should we be charging more?" It's a logical question.But it’s a monetisation question. “Why are advertisers getting such strong returns, and how do we create more of that value?” is a growth question.

The right answers

The right answer depends on the retailer. But the best answers share something in common: retail media is connected to a clear strategic purpose for the business, not just a revenue target.

Here are some examples of what that looks like in practice.

Retail media as a growth engine. Walmart is the most visible example. Advertising revenue helps fund price reductions and delivery investment. Those investments drive frequency and membership. Membership and frequency create more valuable advertising inventory. More inventory attracts more brand demand. The whole business gets stronger. Retail media isn't sitting alongside the business; it's part of the engine.

Retail media as an intelligence platform. Tesco's Dunnhumby has made data and insights as central to the proposition as media itself. Suppliers use it to understand their business better, make range decisions, and plan investment. Media is part of a broader value exchange that deepens commercial relationships rather than simply monetising them.

Retail media as a margin lever for customer investment. At Sainsbury's, the media arm funds investment back into food quality and price - strengthening the core retail proposition. The food offer drives loyalty and frequency. Suppliers get value creation through media. 

Retail media as a way to fund customer experience. There’s a specialist retailer for whom retail media isn't primarily about revenue at all - it's about funding in-store changes that would otherwise be too expensive. Better screens, better environments, better health and wellness experiences for customers. Media makes those investments possible.

Retail media as supplier empowerment. Another retailer has been focused on democratising data access - giving suppliers the tools to understand their categories, grow their businesses, and think about how media investment connects to growth beyond the store. Not squeezing every penny of margin, but building the kind of relationships that come back around.

These aren't the only answers. But they share a common thread: retail media is connected to something that makes the retail business genuinely stronger.

Why the answer matters

The answer to "what is retail media for" doesn't just shape your strategy. It flows through almost every decision.

A retailer focused on supplier relationships might not charge as much as they could for data access to challenger brands - because the long-term value of those relationships outweighs the short-term revenue. A retailer focused on customer experience will think twice before proposing in-store media that's off-tone or intrusive. A retailer focused on margin improvement will report differently - hunting profit, not just revenue, which means looking at the P&L rather than deals done.

It shapes who gets hired. If you're primarily after media sales, you might recruit from agencies. If you're trying to build something that makes the commercial business better, you need people who understand retail and can speak the language of buyers and category managers.

It also influences what gets built first. If the goal is to strengthen supplier relationships, you invest in data and insights early. If the goal is to fund price investment, you focus on maximising yield on the inventory you have before chasing new formats.

The answer becomes the north star. Without it, every decision is contested.

The ideal sequence: Purpose → strategy → operating model → capabilities → technology. 

In practice it often looks like this: Technology → inventory → sales team → revenue target → scramble. 

The question "what is retail media for?" is what puts the sequence back in the right order.

What it looks like without an answer

I've seen what happens when retailers start running retail media without answering this question. It looks like this.

Other departments questioning the value of the new retail media team. Unclear targets between commercial and retail media. Resentment that roles are being created that overlap with existing ones.

Senior leadership leaning into details they shouldn't need to manage, because they're nervous and don't know where they stand. Trade-off decisions made without any framework, often by committee of opinions.

Big revenue targets with no understanding of what's incremental. No clarity on profit. Watching what competitors are doing - they're rolling out screens nationwide - and following suit to be seen to be doing something.

All of this is completely normal. And it’s avoidable, if the “why” question gets answered first.

Answer the question before you build anything else

Retail media done properly is one of the most significant commercial opportunities available to large retailers right now. But "done properly" starts with being honest about what you're actually trying to achieve.

The question isn't optional. It shapes everything that follows — the team, the technology, the commercial model, the supplier relationships, the reporting, the culture.

What is retail media actually for in your business?

Before you decide how much revenue retail media should generate, decide what job you want it to do.

Who this is for

Carroll Commerce helps retail leadership teams turn retail media from a standalone revenue stream into a growth engine for the wider business - clarifying the role it should play, the choices that follow, and how to move from strategy to execution. Get in touch with Tara Carroll.

FAQs

Why do so many retailers struggle to answer "what is retail media for?"

Because the question rarely gets asked at the right level. Retail media often starts as a commercial or technology initiative rather than a strategic one. Someone gets a brief to "build retail media" without the leadership team first deciding what job it should do for the business. By the time the question surfaces, there are already teams, targets and technology in place.

Can retail media serve more than one strategic purpose at the same time?

Yes. Many retailers’ media arms fund customer investment while deepening commercial relationships. What is important is that the purposes are complementary and clearly prioritised, rather than competing. 

Does the strategic purpose of retail media change as the business matures?

It often does, and that's normal - the industry of retail media is evolving too. In the early stages, retail media has typically focused on proving commercial value and establishing ways of working. As it matures, the strategic role tends to expand - from a revenue line to a genuine margin lever. The important thing is that the leadership team actively revisits the question rather than assuming the original answer still holds. What retail media is for in year one is rarely exactly the same as in year four.