I'm excited to kick off a new mini-series exploring a paradigm shift that I believe will define the retail media ecosystem for the next few years: retailers are becoming retailers again.
To help unpack this concept, I've brought in Jordan Witmer, Managing Director of Unified Commerce at the agency Nectar First. Jordan brings a wealth of experience from senior e-commerce and retail media positions at Kenvue (formerly J&J), Hershey, and Stanley Black & Decker.
Our conversation explores how the retail media industry is coming full circle, moving away from the "retailers are becoming media companies" narrative toward something that better aligns with retailers' core competencies.
The Retail Media Role Reversal
Jordan opened our discussion by highlighting the completion of a role reversal that's been happening in the industry. "We went from really early days where this was part of your trade investment. Then you saw a huge wave of 'retail media's media,' published articles with the titles, 'retailers are becoming media companies,'" Jordan explained.
(And in the days since our interview, even this one from Digiday: "Retail Media Networks want to be known as media companies now")
What's interesting is that while this shift was happening, retailers were moving away from their core competency: finding the right products for consumers and merchandising them effectively. Now, we're seeing a return to these fundamentals in how retail media networks operate.
The Private Label Analogy
One of the most illuminating frameworks Jordan shared was comparing retail media networks to private label products. Just as many private label products come from the same manufacturing plants but are sold under different retailer brands, many retail media networks are powered by the same backend technologies but marketed as unique offerings.
"There's a proliferation of a ton of different networks, but there's only really a few different technologies on the back end that are powering them," Jordan noted. Advertisers are buying these products from retailers with a markup, even though much of the underlying technology is the same.
The 'Beverly Hillbillies' Approach to Retail Media
I couldn't resist bringing up Jordan's colorful analogy from when we first met at the Retail Innovation Conference & Expo ('RICE') in Chicago two years ago. He compared retailers discovering the value of their first-party data to "a hick finding gold in their backyard" (a term of endearment, as Jordan clarified, being from rural Pennsylvania himself).
This "Beverly Hillbillies" framework raises important questions about the build versus buy decision: "If you're like me and you don't have acreage, then is it going to make sense for me to stand up a whole company end to end, learn how to do everything, build all the tools myself? Is it better for me to call somebody that does this professionally?"
Why the Secrecy Around Technology Stacks?
One of the most intriguing aspects of our conversation was exploring why retailers are often so cagey about sharing details of their technology stack. Jordan compared it to the Kirkland golf balls phenomenon:
"Costco had their Kirkland golf balls that went just like wildfire through the community once everybody found out that they were made on the same manufacturing lines as Titleist. If that were to happen, I wouldn't want to be Titleist in that situation."
If retailers are using the same technology but charging different markups, transparency could create pricing pressure across the ecosystem. Additionally, data privacy concerns may play a role in this secrecy, particularly for retailers in sensitive categories like pharmacy.
This conversation is just the beginning of our exploration into how retailers are returning to their merchandising roots in the retail media space. We'll be continuing this discussion in tomorrow's episode, digging deeper into the implications for brands, agencies, and the technology providers powering this ecosystem.
Stay tuned for part two of my conversation with Jordan Witmer next week, where we'll further unpack this fascinating evolution in retail media.
