When not to build a retail media network - and what to do instead
Most retail media content for retailers is about what to build and how much it’s worth. This is the antagonist conversation: the one about whether you should.
Quick answer
Not every retailer should build a retail media network. For some, the ingredients simply are not there - and attempting to build without them leads to wasted investment, internal distraction, and a retail media operation that barely justifies its existence. Knowing when not to build is as important as knowing how.
The unpopular conversation
I have been talking with and working with the people who have ‘build retail media’ on their agenda inside some fantastic retailers. But in a few cases, I have advised them not to.
Seriously. For some retailers there are better options: join a syndicate, outsource to a media group, partner with a vendor on a managed service basis, or focus on a simplified offer like data and insights. Don't try to build a network yourself.
Because not every retailer has the ingredients to make it work. And a retail media operation that is under-resourced, under-mandated, and under-scaled will absorb time and create huge amounts of friction without ever generating returns that justify it.
Here is how to tell whether you have what it takes.
The five ingredients
1. Scale
You need meaningful sales volume, customer numbers, breadth of categories, brands, and SKUs. As a rule of thumb: if your opportunity sizing puts you under £1m of retail media revenue annually, think very carefully about whether you will spend more on the team and technology than you will ever make back.
Scale matters for two reasons. First, brands need reach. If your audience is too small, the media proposition is not compelling enough to attract meaningful investment. Second, the fixed costs of building retail media infrastructure (technology, data, people, measurement) are substantial. You need enough revenue potential to make those costs worthwhile.
2. A healthy underlying business
If customers are leaving, market share is dropping, and you are looking at price increases or supplier negotiations to find profit… retail media is not a solution. The idea of high-margin incremental revenue sounds tempting when the core business is under pressure. But brands will not invest in your media unless they can see room for growth. And building retail media will distract the leadership team from fixing the fundamentals at exactly the moment when focus matters most.
Retail media amplifies a healthy business. It does not rescue an unhealthy one.
3. Identifiable audience data
If a significant proportion - as a rule of thumb, I’d say more than 50% - of your sales can be linked to an identifiable customer, either online or via a loyalty programme, you have the foundations for closed-loop measurement and off-site activation. That is the data infrastructure that makes retail media genuinely valuable to brands.
If you have millions of unidentified shoppers visiting stores each week, you have an opportunity to install screens and sell advertising. But that is closer to digital out-of-home than a full retail media network. It is a legitimate option - but it is a different business, with different economics and a different approach needed.
4. Technology leadership that can execute
Retail media requires a technology business operating inside a retail business. You need people who can build or integrate ad servers, data pipelines, measurement infrastructure, and self-serve platforms - or who can evaluate and work effectively with the vendors who do.
If your technology team is fully occupied keeping ecommerce running, there will not be capacity for this. It is not an add-on project that sits alongside business as usual. It requires dedicated resources, a clear product roadmap, and technology leadership that understands both retail and media.
5. Leadership appetite for transformation
This is the most overlooked ingredient - and the most common reason retail media stalls.
Embedding a media business inside a retail business is not a project management challenge. It is an organisational transformation. There will be political tensions between commercial and media teams. There will be competing priorities and misaligned incentives. There will be confusion about who owns what and why. There will be periods of ambiguity where progress feels slow and the results do not yet reflect the work going in.
It takes strong, aligned leadership from the top - a clear vision, genuine mandate, and the willingness to make tough calls at executive level rather than leaving them to be resolved on the ground. Isolated functional changes will not do it. It needs an enterprise-wide approach and a leadership team that understands what they are signing up for.
What to do if you don't have all five
Not having all five ingredients does not mean doing nothing. It means choosing the right model for where you are. Some examples:
Join a syndicate. Pool your audience data and inventory with other retailers to create scale you could not achieve alone. Could work for mid-sized retailers with strong first-party data but limited scale.
Managed service partnership. Partner with a technology vendor or media group who builds and operates the retail media infrastructure on your behalf. You bring the audience and the supplier relationships; they provide the capability. Lower investment, lower control, but a faster route to a functioning proposition.
Outsource to a media group. Hand the commercial and operational build to an experienced retail media operator. For when the appetite is there but internal capability is not.
Focus on data and insights. If your data assets are strong but your media infrastructure is not ready, selling data and insights to brand partners is a viable, and valuable, starting point. It builds the commercial relationships and proves the data value before you make the larger infrastructure investment.
Start smaller. Rather than building a full retail media network that spans ecommerce, bricks and mortar stores and off site media channels, launch a simplified web/app proposition first. Lower cost, faster to market, and gives you proof of concept before committing to the full build.
The realistic conversation for many organisations is not "should we do retail media?" It is "what version of retail media is right for us, right now?" Those are very different questions, and the answer to the second one might be a much simpler starting point.
Who this is for
Carroll Commerce works with retail leaders who want an honest view of where they are and what the right path forward looks like - whether that is building a retail media network, finding a better-fit model, or understanding what it would take to get to the point where a full build makes sense. If you are trying to work out which of these applies to you, get in touch with Tara Carroll.
FAQ: When not to build a retail media network
How do I know if my retail business is big enough for retail media?
The most useful starting test is opportunity sizing - modelling what your retail media revenue could realistically be based on your customer data volume, visit frequency, category mix, and supplier base. If that model puts you below £1m annually, the economics of building a full retail media network are difficult to justify. The fixed costs of technology, data infrastructure, and dedicated resources typically require meaningful scale to recover.
What is a retail media syndicate?
A retail media syndicate pools the audience data and media inventory of multiple retailers to create scale that individual retailers could not achieve alone. Brands can buy across the combined audience rather than retailer by retailer. For mid-sized retailers with strong first-party data but insufficient individual reach, syndicates offer a route into retail media without the full infrastructure investment.
Can a retailer with no loyalty programme do retail media?
Yes, but unless a large % of sales are online, it limits the proposition significantly. Without identified customer data, closed-loop measurement - connecting media exposure to purchase behaviour - is not possible. You can sell advertising against your traffic and in-store footfall, but that is closer to digital out-of-home than retail media. It is a legitimate revenue stream but a different commercial proposition with different brand partners and different pricing expectations.
What is a managed service model for retail media?
Managed service partnership - partner with a technology vendor or media group who builds and operates the retail media infrastructure on behalf of the retailer. Note: managed service also refers to how campaigns are run for advertisers - hands-on versus self-serve. Here the term refers to the operating model for the retailer, not the advertiser. The retailer brings the audience, the supplier relationships, and the commercial context. They provide the technology, the operations, and often the sales capability. It is a lower-investment, lower-margin and lower-control route to a functioning retail media proposition - an option for retailers who want to move faster than an internal build would allow.
What should a retailer do if they are not ready to build a retail media network?
The most common sensible starting points are: developing a data and insights ‘product’ for brand partners as a standalone proposition, launching a simplified web/app offering without the full infrastructure, or partnering with a managed service provider to operate retail media for them. None of these require the full transformation that a retail media network build demands - and all of them build the commercial relationships and data credibility that a larger build would eventually need.
Is retail media right for a specialist retailer with a smaller but highly engaged audience?
Potentially yes, and the way of thinking about it is different from grocery, which has traditionally led the way in the UK. A specialist retailer with deep customer engagement, high dwell time, and a loyal audience of people with specific purchasing intent can build a compelling retail media proposition even without grocery-scale volumes. The key questions are whether the audience is identifiable, whether the supplier base has sufficient media budget to invest, and whether the revenue potential justifies the infrastructure cost. Specialist retail media is a different proposition from grocery retail media; not necessarily a smaller one.