Recently, I ran out of coffee pods. And like any self-sufficient millennial, I immediately logged on to Amazon, determined to track down my Nespresso capsules of choice. The pods were listed, but I had to search. Despite different keyword combinations, specific product inputs, and selected filters, Amazon always listed other brands—namely, its sponsored product advertisements—first.

Amazon controls 75 percent of the retail media space, largely due to its early adoption of sponsored ads, which the company launched in 2012. Unlike traditional retailers, which historically have invested to ensure their brands are prominent in stores, such that they spent their budgets to be featured on endcaps or displays and in trade promotions, Amazon understood the profitability of retail media from the start.

According to the Boston Consulting Group, retail media generates average profit margins of 70–90 percent. But retailers are failing to make the most of it. Instead, the trend appears to be to launch business-to-consumer retail media networks that simply list advertising space. To monetize their advertising, companies may need to shift their perspective and evolve into business-to-business models, so that they can position their retail media networks primarily as tools that other brands can leverage.

Some forward-thinking retailers have gotten to this position, rolling out self-serve advertising space that can replace traditional, managed service models. Whereas in the past, retailers relied on advertisers to place their marketing content, today brands of all types can buy advertising space completely on their own. Home Depot, CVS, and DoorDash are just three of the companies that introduced self-serve or hybrid models in 2024.

Other retailers also might be adopting a business-to-business marketing approach, though their efforts have remained relatively quiet thus far. Costco recently made onsite video advertising space, in-grid display ads, and offsite advertising available, though without making any sort of public announcement. Likewise, Amazon Port, Walmart Connect, Target Roundel, and Kroger Precision Marketing have all made their debuts, such as by hosting stands at the Cannes Lions International Festival of Creativity in recent years—a well-known event likely to reach potential clients within the communications and advertising industry.

Another viable option is emerging as well, in the form of strategic partnerships with social media companies. Through these partnerships, some organizations have begun to sell cross-platform advertising space. For example, Walmart has a partnership with Roku and TikTok; NBCUniversal integrates multiple retailers into its One Platform Commerce.

Although such emergent efforts and experiments represent welcome developments in the retail media space, as well as a promising start toward something radically new and different, retailers still are starting with a disadvantage. They will need to work hard to recapture market share already snatched up by Amazon, as well as to differentiate the capabilities available through their platforms. Success will require strong relationships with other businesses, as well as constant efforts to demonstrate the value of their platform offerings.

Discussion Questions

1. Can other retailers compete with Amazon to establish their retail media offerings?
2. What are some other ways to build strong relationships with brands, through retail media networks?

Sources: Brent Adamson, “Traditional B2B Sales and Marketing Are Becoming Obsolete,” Harvard Business Review, February 1, 2022; Candance Lun Plotkin, Jennifer Stanley, and Liz Harrison, “Five Fundamental Truths: How B2B Winners Keep Growing,” McKinsey & Company, September 12, 2024; Kiri Masters, “2025 Will See Retail Media Networks Launch a Charm Offensive,” Forbes, November 12, 2024