Why retail media doesn’t need more scale, it needs a smarter route to market
Opinion – Week in Focus
Retail media faces rapid, structural fragmentation, which threatens to stall its momentum. SMG’s global head of product outlines her solution based on collaboration and a mindset shift.
For much of the past decade, scale has been the defining currency of success in commerce media. Retail Media Networks (RMNs) grew rapidly by monetising audience size, data, retail strength and the breadth of inventory available to advertisers. The focus was on building quickly, capturing spend and expanding supply.
But retail media’s next phase is being shaped by a challenge that threatens to stall its momentum: rapid, structural fragmentation.
As more RMNs enter the market, the sector is confronting a hard truth: more isn’t always better. With more than 200 RMNs globally, all competing for the same share of advertiser budgets, what once looked like an explosion of opportunity has become an overcrowded marketplace. Scale alone is no longer enough to stand out when many networks offer similar reach.
As a result, advertisers are consolidating spend and prioritising partners who are easiest to buy from and most capable of demonstrating clear, incremental value. Not necessarily because they offer market-leading opportunities but because they are the easiest to manage at scale.
But the consequences are significant. Smaller and niche RMNs, many of which offer highly differentiated and valuable audiences, struggle to attract demand. Meanwhile, the dominance of major tech platforms, particularly Amazon, leaves brands with fewer meaningful choices.
There is a growing risk that the sector may stall before fully maturing, unable to scale in a way that benefits the broader ecosystem. For many advertisers, commerce media still feels siloed, fragmented and less mature than other parts of the media mix.
If retail media is to grow sustainably, competitively, and accessibly, the industry needs a new approach.
Collaboration and mergers between RMNs may eventually help, but they won’t happen fast enough, or at the scale required to rebalance the market. Crucially, they also fail to address the underlying operational friction.
What’s needed is not more consolidation, but a smarter route-to-market.
Fragmentation isn’t just a supply problem; it’s a demand problem too
It’s easy to view fragmentation as a supply‑side issue: too many RMNs, too many interfaces, too many inconsistent standards. But the demand side is equally fractured.
Each RMN operates as its own silo, with its own integrations, planning workflows, reporting frameworks, and measurement methodologies. For buyers, this means navigating hundreds of ‘mini walled gardens’, each requiring bespoke processes which simply isn’t sustainable.
This creates friction at every stage. Planning becomes slower, activation becomes resource-intensive, optimisation becomes fragmented, and measurement becomes incomparable.
As a result, buyers are forced to prioritise efficiency over reach because they simply cannot justify the overhead of working across dozens of RMNs, even when those networks offer unique and valuable offerings. Investment therefore flows to the biggest players, not necessarily the best ones.
This is how fragmentation becomes a structural barrier to competition.
Retail media isn’t the first sector to face fragmentation
Digital publishing went through a similar evolution a decade ago.
Publishers realised that treating all impressions equally was inefficient and unsustainable. They began segmenting inventory into premium vs remnant, and balanced guaranteed deals with programmatic demand. This preserved control while improving fill rates and accessibility.
The introduction of supply‑side platforms (SSPs) created multiple routes to market, enabling greater competition, more efficient buying, standardised formats and measurement, and publisher‑level control over what inventory was surfaced.
The parallels with retail media are clear. The opportunity is not simply aggregation, but the creation of smarter buying models that balance scale with control, while bringing transparency to a fragmented ecosystem.
Why the industry needs a mindset shift
The problem is not the number of RMNs, but the number of endpoints.
Rather than building more platforms, interfaces, and walled gardens, the sector needs a better inventory‑agnostic access layer. By consolidating entry points for buyers to access any RMN or commerce platform across omnichannel inventory, one layer provides access to multiple sources of supply.
Such a model would dramatically reduce operational complexity, make smaller RMNs more accessible, enable holistic planning and optimisation, and preserve retailer control over inventory exposure.
But access alone is not enough. To address fragmentation fully, the industry also needs a structured approach to categorisation, grouping retail media inventory by attributes such as audience type, inventory quality, vertical specialism, and performance metrics.
This would give buyers a clearer understanding of inventory value, while allowing retailers to retain control over pricing and availability.
The balance is crucial: buyers control budget allocation; retailers control inventory. Neither loses ownership and both gain efficiency.
Unlocking the omnichannel retail media opportunity
If implemented correctly, this exchange-style model could extend far beyond digital display or onsite placements. Retail media’s true advantage lies in its proximity to purchase. A unified access layer could eventually incorporate in-store screens, near-store and out-of-home media, digital audio and radio, first-party data activation, and offsite programmatic.
This would create a genuinely omnichannel retail media ecosystem, one where digital and physical environments work together rather than in silos.
It would also open the door for adjacent media channels, such as programmatic DOOH and audio, to integrate seamlessly into commerce‑led campaigns.
Co‑operation is no longer optional
Retail media is at a crossroads. If fragmentation continues unchecked, the market will become less competitive, smaller RMNs will struggle to scale, agencies will continue to simplify their approach, and dominant platforms will consolidate their position even further.
As retailers become more open to collaboration, there’s a clear opportunity to develop more agnostic, exchange-style access layers that better support the entire market. This isn’t about creating another walled garden, but about addressing a structural gap: improving routes to market through shared infrastructure that enhances access to inventory, standardises measurement, and supports healthy competition across the ecosystem.
Retail media has the potential to reshape the media landscape into a more balanced, more diverse, and more dynamic marketplace. To get there, the sector must embrace co‑operation before fragmentation becomes irreversible.
Claire Trbovic is the global head of product at SMG