Best Practices For Building A Strong Retail Media Network In 2025

Forbes

06-08-2025

Tamara Bebb is the CEO of Spectrio, a leading provider of customer engagement solutions for businesses, including digital signage.
Research shows that while some brands allocate nearly half of their budgets to advertising through retail media networks, as many as one-third of marketers find it difficult to demonstrate a strong return on investment (ROI) from their campaigns.
Without a successful strategy, retailers risk overwhelming and desensitizing customers with ads. This could mean missing opportunities to provide personalized recommendations, prioritizing the wrong metrics or making poor use of potential marketing channels, all of which can significantly impact your overall ROI.
So, what are the best practices for creating a retail media strategy that enhances your performance and delivers measurable results? Based on my own experience in the advertising industry, here are four important factors to keep in mind:
1. Don't overwhelm shoppers.
One of the most prevalent mistakes I see with advertising in general, and particularly with retail media networks, is overwhelming shoppers with ads. When every part of an online screen experience is covered with sponsored content, or when pop-ups interrupt the checkout process, the shopping experience suffers.
In-store retail media networks can have the same problem. If an in-store screen provides no additional value and has no functional role other than showing ads (meaning it is not used to educate, inform or entertain), I've observed that customers tend to tune it out, providing less value to the advertising brand. Too many digital signs or intrusive pop-ups at self-checkout kiosks can frustrate customers rather than engage them, decreasing the overall ROI of your retail media strategy.
People are tired of ad overload. Instead of bombarding shoppers, focus on fewer, better-placed ads that are contextually relevant, brand-friendly and able to enhance rather than disrupt the customer experience.
2. Focus on personalization.
I've found that one of the most important aspects of a strong retail media network is personalizing offers through first-party data. This refers to data that the retail media network provider collects directly from its customers. For example, Amazon collects and uses its first-party data to personalize which ads and products show up as 'sponsored' as its customers search the website. The more your retail media network can personalize sponsored products according to customers' real needs, the higher your ROI should be.
In physical stores, first-party data can be harder to collect, which can make personalization more challenging. Loyalty programs or surveys can be a good source of first-party data that you can use to personalize future offers.
Leveraging AI to analyze transaction log data and recommend ad placement based on time-of-day and day-of-week purchase patterns is a major way you can use first-party data to create more value for both yourself and the advertiser. Take the well-known pattern of people tending to buy more coffee in the morning and more soda in the afternoon, for example. Determining adjacent products like donuts for coffee and chips for sodas is logical. This is one of the reasons data is such an important component of a successful retail media network.
You can also gather demographic information and behavioral data through various in-store technologies, such as smart devices, kiosks, scanners and sensors. Regardless of the method, your goal should always be to maximize the value of first-party data in order to understand customer needs and deliver relevant offers at the right time.
3. Clarify your KPIs early.
Another contributing factor to retail media success is tracking the right performance metrics from the start so you can see where you're doing well and where you need to improve. Let's take a look at some of the major key performance indicators (KPIs) used for digital and in-store retail media networks:
For most digital networks, KPIs typically focus on engagement, conversions and "return on ad spend" (ROAS). "Click-through rate" (CTR) measures how often shoppers interact with ads, while "conversion rates" track how many ad clicks lead to purchases. ROAS evaluates the revenue generated per dollar spent, while "cost per acquisition" (CPA) determines how much it costs to acquire a customer through ads. "Impressions" and "reach" gauge brand awareness and visibility.
In-store retail media operates differently, with a stronger emphasis on foot traffic and shopper behavior. Advertisers in these spaces rely on a variety of KPIs. Determining the "cost per thousand views" (cost per mille or CPM rate) that your advertisers should pay to place an ad on an in-store screen typically starts with understanding the overall venue traffic, or "opportunity to see" (OTS), and the traffic around digital touchpoints, or "likelihood to see" (LTS).
"Dwell time," which measures how long customers engage with in-store displays, and "sales lift," which compares pre- and post-campaign sales to determine ad impact, can be used to justify higher CPM rates. "Redemption rates" are used to track how often shoppers use in-store promotions or QR codes, while "customer traffic patterns" can assess how ads influence store navigation and product discovery. "In-store engagement" analyzes shopper interactions with digital screens and displays.
To maximize impact, align your KPIs with your campaign goals. For example, if your objective is brand awareness, then focus on impressions and reach for online campaigns and/or dwell time for in-store efforts. If driving sales is the priority, give precedence to conversion rates online and/or sales lift in-store. Make sure you know exactly what your goals are and how to measure progress and success.
4. Diversify your channels.
Another common mistake I see is when companies focus their retail media efforts solely online, overlooking valuable opportunities to engage customers in physical stores. Since approximately 80% of purchases are still done in a physical store, the opportunity to influence a shopper at the point of decision making should not be underestimated. I've found that this often leads to an overabundance of sponsored products and ads on websites and apps, while in-store advertising remains underutilized.
As a retailer, remember that you have multiple tools you can use to speak to your customers. Every piece of digital real estate, including kiosks, signage, and email campaigns, is an option for extending your network. Diversification can help you keep customers engaged and make sure you're getting the most value from your ad spend.
Retail media networks can provide powerful ways to connect brands with customers while leveraging first-party data to enhance relevance and drive sales. By refining your approach and making the most of your available digital real estate, you can improve customer experience, maximize ROI and ensure long-term growth in an increasingly competitive advertising landscape.
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