Digital Retailers Are Now Media Empires (and Why It Matters)

Retail media networks entered digital commerce with a straightforward promise: brands could connect with shoppers near the point of purchase, while platforms like Amazon, Walmart, and Mercado Libre could monetize search traffic. Consumer packaged goods companies and direct-to-consumer businesses shifted larger portions of their marketing budgets into these channels, drawn by clear returns on ad spend and steady conversion rates.

That initial phase of alignment has evolved. Today, the balance of power in negotiation is shifting dramatically toward digital retailers, creating an urgent need for brands to establish direct, friction-free relationships with their end consumers. Major digital retailers now operate as media publishers. By capturing purchase records at checkout and linking that data to media exposure across the internet, these platforms established network models that control key touchpoints in digital shopping.

For brands, this shift changes the economics of online distribution. As power continues to concentrate in these platforms, companies that view marketplaces strictly as sales outlets find themselves in an increasingly vulnerable position. Many end up buying retail media ads to preserve search visibility, paying ad fees to reach shoppers who intended to buy anyway, and buying back aggregated audience summaries from platforms that hold the underlying customer records.

Understanding this dynamic requires a look at how the financial structure of major retailers has shifted. Traditional retail runs on narrow margins where earnings depend on inventory turnover and lean operations. Retail media advertising operates on a different financial model, frequently generating operating margins above 60%. In fact, Retail Media is quickly proving to be a massive high-margin revenue stream that will redefine retailer profitability in the very near future. 

To grasp the sheer scale and velocity of this transformation, consider Walmart Connect in the United States: Even though advertising currently accounts for only around 1% of Walmart Connect's total sales, its rate of growth is staggering. Similarly, platforms like Mercado Libre are experiencing exponential growth in their media divisions, transforming what was once an ancillary feature into a core economic driver.

Privacy, Tracking Change Digital Advertising

Meanwhile, privacy updates across mobile platforms and changes in third-party tracking altered how digital advertising works. Target audiences across the open web became harder to pinpoint and more expensive to reach. Closed-loop transactional data—records of what shoppers buy—became central to performance marketing. Marketplaces with basket histories, purchase frequencies, and customer profiles can prove conversion attribution in ways traditional ad networks struggle to match.

This environment creates a persistent cycle for brands. When a business depends on a retailer's ad tools to generate sales, it shares demand signals while receiving summarized reports in return. To protect shelf placement, brands bid against competitors and against the marketplace's own private-label lines right at checkout. Without access to customer purchase habits, marketing and operations teams lose the ability to train internal predictive models, forecast demand, or design targeted retention efforts.

This challenge affects companies across different sizes. Large consumer brands often treat rising retail ad costs as trade spend, accepting compressed margins to maintain volume. Midsized brands feel this margin pressure more directly. Operating on tighter budgets, allocating a growing share of revenue to marketplace ad auctions reduces the capital available for product development, team expansion, or channel growth.

Stepping away from major e-commerce platforms is rarely practical. These marketplaces offer distribution scale, logistics networks, and customer trust that take years to build independently. The goal for commercial leadership involves establishing a dual-track strategy. Given how fast negotiation leverage is eroding, brands must urgently balance their marketplace presence by building owned channels designed for direct customer interaction, first-party data collection, and long-term customer ownership. 

Closing this leverage gap takes planning and focus. Having first-party data is essential to communicate and reinforce each brand's DNA. Working with experienced advisers helps leaders evaluate channel mix, structure data systems, and build internal capabilities to protect future growth.  

Focus, Steady Execution

Regaining leverage requires focus and steady execution. Commercial teams can work through three priorities to build direct customer relationships.

First, brands can create digital touchpoints that offer utility. Tools like diagnostic quizzes, routine builders, or product recommendation engines give shoppers a reason to share preference data. On-product packaging, additions like QR codes or integrated NFC tags connect offline buyers directly to the brand after unboxing, establishing a communication channel outside the marketplace environment.

Second, organizations can foster owned brand spaces rather than focusing solely on social media followings. Followers on social media and shoppers on marketplaces belong to the host platforms, subject to changing algorithms and fee structures. Members of an owned channel interact directly with the brand. Involving customers in product feedback, advisory panels, or preview access for select releases gives users a reason to maintain a profile on the brand's primary site.

Third, companies can update loyalty models. 

Points-for-purchase programs often act as simple discounts. Retention systems can reward broader customer interactions, such as reviews, profile updates, or community participation. Feeding these data points into automated communication workflows across email, WhatsApp, or SMS helps deliver relevant messages that protect margins and increase customer lifetime value.

Closing this leverage gap takes planning and focus. With retail media rapidly expanding into a dominant profit center for platforms, brands can no longer afford to delay. Commercial leaders benefit from working alongside advisors who understand market shifts. An experienced advisor can evaluate channel mix, help structure first-party data systems, and build internal capabilities. Establishing this framework creates a safeguard for the future, providing brands with the capacity to adapt to market changes and new technologies.