A (2:46)

So reorgs.

C (2:47)

Exactly.

A (2:48)

Arielle, what about you?

B (2:49)

So my trend is that retailers are going to focus on hard launching their in store retail media capabilities and they're going to do that through in store takeovers and also I believe some more experiential, you know, retail media. So obviously we know in store is, you know, where over 80% of purchases still take place. It would be completely insane for retailers to ignore that. As Sarah said, though, it is very difficult to kind of get the hardware, the infrastructure and so forth. So a lot of times we're seeing people wait and see. We want to see if this really works. But in order to see if it works, you kind of have to go full into it. And so I think this year we're going to see people go more into in store retail media and they're going to do that with, like I said, in store takeovers. So that's going to be through screens, through different surfaces. It could be in the store, it could be out of the store, but we're really going to see that start to take shape.

A (3:49)

So you're all about the in real life store experience irl. Awesome. So let's move to round two. This is where you're going to tell us how it technically plays out. We'll go deeper into your trend. So not just what the trend is, which you guys so eloquently already told us, but how is it going to show up throughout 2026? What are the changes? Who's impacted? What does this look like in the real world? Okay, Sarah, let's start with you again. Walk us through your trend and how you see it unfold over the year.

C (4:19)

Okay, so I organized this into four really specific predictions. We love that. So that we can really like measure the progress for how this goes throughout the year. So the first prediction is that retail media moves closer to merchandising. Right. So in this retail media teams will shift closer to the groups that actually control things like PRIC and assortment and promotions. Right. Because historically, when media has sat too far from those decisions, you can have strong advertiser demand, you can have the most beautiful retail media strategy, but still not see that translate into results. And we need to remember that retail media is a media business that sits on top of retail. Right. We have to move product at good prices and satisfy our customers in order for it to work. Right. So bringing media closer to merchandising is going to help align ads with how categories are actually planned and executed. And so it lines up the store experience or even the website experience with what consumers are seeing and ties that back to ads more effectively. And I want to point out we started to see early signs of this in 2025. Large grocers like Kroger and Albertsons and even Ahold Delhaize announced moves to reorganize their teams to more tightly connect retail media with merchandising as well as loyalty and other commercial functions. Sorry, question.

A (5:30)

Yes, I was just going to ask you. So we know the traditional silos don't work. What group do you think is going to be most impacted by the reorg?

C (5:37)

I mean, think they'll be the retail media teams themselves. I think they're going to have to get used to new ways of working. Again, I think when you're working to launch a media or monetization program focused solely on a digital owned and operated property like a website or an app, you can move relatively quickly and sort of turn operating in a silo to your advantage. But that's just not going to work as we look to scale further into off site and specifically into physical stores.

A (6:01)

You might get into this later, but for me it feels like having come from the merchant office, it's like a giant step. Right. It's like a whole shift in the operating model and they might start to worry about their margin.

C (6:12)

Yeah, and I think that's actually already happening. It's part of the problem. And this segues right perfectly into my second prediction. So thank you for that. Which is that incentive structures are going to become more cross functional. So today we've done research on this. Most retail media teams are incentivized purely on ad revenue. And when that happens, it creates a real risk of reinforcing silos in the organization. Just like you were sort of hinting at. Especially if that incentive structure can give the impression of success in a vacuum. Right. So you're meeting your retail media ad revenue goals, but if that sits completely separately from meeting your margin goals. Right. Or your top line sales growth, then it becomes a zero sum game where the success of one team might be seen as coming at the expense expense of another team. So in 2026, I think success is going to be defined less by ad revenue alone and more by things like category growth and broader commercial impact. And I think we're going to start to see retailers introduce shared KPIs. Right. So that media, merchandising, e commerce and store teams are all working towards Shared, mutually understood goals.

A (7:11)

And then what about using co op money to get rid of merch? Do you think, what do you think is going to happen with that? It's just going to be a shared responsibility. I guess everything will be shared.

C (7:18)

Yeah. I mean, I think it's very likely that these things are going to start being looked at holistically. I think the benef of retail media is it provides more, in an ideal world, transparency and reporting so that advertisers or brands can understand where their money is going. And that's a real difference to the way co op money has been managed by merchant teams in the past. So I think there's a challenge there. But I think the opportunities that if these things can be managed holistically and planned for and reported on more effectively, then we can make sure that the money flowing into a retailer is going to the very best tactic to move product at the right time, in the right place, at the best price.

A (7:54)

Because we know that 60, roughly 60% of dollars are flowing through search, which could help move the product without using co op money.

C (8:01)

That's true. Yep.

A (8:02)

I love it.

C (8:03)

I have two more predictions. Oh, please keep going. No, yes, of course.

A (8:06)

We love hearing about this.

C (8:07)

Okay, my third prediction. And I think it's interesting, Aria, like both our predictions are sort of underpinned by this need to act on the huge potential for in store. And so I think in store retail media is going to be the force that really sort of forces that organ. And I think we're going to see this play out specifically from retailers that have larger store footprints. Right. And maybe relatively smaller e commerce businesses because they're the ones that are recognizing in order to make this retail media thing work, we're going to have to figure out how to monetize our physical stores. And so this is where we start to expose the limits of those siloed teams and see the need to have tight coordination with merchants and store operations readily available, especially when it comes to how the shelves are stocked. And my last prediction, I think it's sort of a result of these other things playing out, is that retail media will gain more credibility inside of their organization. So this is based on more research that we did in 2025. We found that most retail media team leaders felt really confident in their strategy. But when we asked them if they felt that their broader organization in turn believed in their retail media strategy, that confidence really fell off the cliff. So to me, that gap shows up as slower decisions, uneven internal support and difficulty launching things like in store retail Media. And I think as we see these organizational changes roll out, we're going to see that confidence gap start to close.

B (9:26)

It's really interesting how many of those things are so kind of closely tied together and reinforcing each other, because I do agree as the channel grows, the confidence needs to grow with it and there needs to be all of these other things. So it's really interesting that they're all very interlocking.

C (9:41)

Yeah, absolutely. None of it can happen without the entire organization really having belief in retail media, because it's going to require investment. Another thing retail media teams told us was that they feel these really acute talent shortages in crucial areas that they need in order to establish credibility and expertise and keep growing. And again, that's going to require organizational belief to fuel the investment necessary to close those gaps.

A (10:03)

And I liked what you said in the beginning. It's moving from experimentation to a more permanent revenue stream. So everybody has to band behind it. But tell us about, I mean, a lot of these organizations have a loyalty team. What will happen to that team and all the data that they sit on and will that kind of work together? Is that part of the vision of the reorg?

C (10:20)

Absolutely. And I think from the retailers that I mentioned already that Kroger really notably moved their media team and their loyalty team under the same. Same division. Right. So they're working more closely together. They're reporting to the same leadership, and those are some of the earliest steps in terms of sort of uniting retail media into the broader strategy.

A (10:39)

Right.

C (10:39)

So I think loyalty, marketing and merchandising are some of the core internal functions where we're going to see reorgs working to bring media closer into the mix.

A (10:48)

Love it. What about you, Arielle? What's your trend?

B (10:50)

Yeah, So I don't have quite as many predictions as. But I do have a few different ways that this is going to unfold. One of the ways is we're going to see turnkey takeover packages kind of become part of retail media networks offerings. I think Best Buy has already started to do this with its takeover packages, which kind of includes include physical displays, digital walls, interactive screens, and checkout counters. So there's really kind of a coercive, cohesive, a cohesive thing where brands don't have to pick and choose. They can really have the entire takeover package, and it can really make a kind of big splash in store. We're also going to see this expand not just to the actual inside of the store, but outside of the store as well. An example that I, from this Year that I thought was really co is Oreo did a really interesting out of home advertising campaign with Kroger and they did. It's in the crosswalks outside of their store. Yeah, it's really cool, the crosswalks. Essentially it's a very simple design. It looks like a character eating Oreo cookies, but there is also a QR code that gives them an offer inside the store. So I think we're gonna start to see kind of these creative ways of making your brand known throughout the store and then incorporating maybe some of those like elements, like shoppable elements, QR codes, etc. The other thing, and this is a different prediction outside of Sarah's report that I'm going to throw in here because I think it makes a lot of sense. I think there's going to be more experiential retail media. And Dollar General had a really good example of this this year. They partnered with a company called Recess and this was actually completely outside of the store itself. They went into the community and they gave out SA and it was really targeted to very specific things. And I think Dollar General, I think is a really good example of a retailer with a hard to reach niche audience. And so I think we're going to start to see, as Sarah said, these retailers with a larger physical footprint really start to get kind of more innovative with their in store retail media and kind of play with it a little bit to really show that it is working and then it can, you know, move the needle.

C (13:12)

I think what's fascinating here is it feels like this sort of linear change in the way stores have approached in store retail media. Whereas historically it's been these specific formats that are in this sort of tight knit group of pilot stores. And it's felt, even though the press releases might feel big, like the actual execution has felt a little bit quiet. Right. And so I think the retailers who have been investing in these small sort of ad hoc tests are now going to start putting all the pieces together and it's still going to happen in a really concentrated way. Right? It might be one or just a handful of stores where we see this really immersive takeover packages take place. But the point is going to be to say, hey, let's show our homework. Here's all the work that we've been doing on developing these ad formats, measuring these ad formats, and here's the power it can bring to an advertiser and I think there's that external messaging around. Here's the power of in store retail media as A channel as well as internal signaling that needs to happen. Right. So that retail media teams can showcase to their leadership. Look what we could do. Right. And look what we should be doing at scale. So I think this is a fascinating sort of like the next chapter. Right. It's not necessarily going to be the year where in store digital media goes mainstream, but this is going to be the next step in that evolution.

A (14:28)

For me. It's the experiential part that's cool because that goes beyond feeling like you're being advertised to for it to feel like an activation and a little bit more of a natural extension of the store versus being sold to. And on the retail front in our retail trends, we said that with AI the store is going to become even more important. Right. And we know that it's definitely an under monetized channel. There's so much traffic and as we all know, 80% of sales are in a store. But I think the one part that I'm still missing and I'd love you guys to. Ariel, starting with you, give me your perspective on how do we account for that sale though, is it how do we know what the right window of time is before we say like they were in the store, they saw the activation, they bought it three weeks later, seven months later? Like how do we help our listeners better understand that? Closing the loop. Right. We talk so much about the funnel, the full funnel. They're not always being optimized. But that measurement piece is critical.

B (15:23)

Yeah. So it is something that retail media networks are still working on is how to not only tie the sale to the in store activation, but also to show that it's incremental, which is what everyone wants to know. Albertsons actually just recently announced that they've created a new incrementality measurement tool in efforts to really to hone in on this. And I know Albertsons has definitely been on the forefront of trying to nail down measurement, which has been notoriously difficult. So I certainly don't think I have all of the answers, but I think it's something that we're going to see a lot more in store measurement kind of focus this year.

C (16:07)

Yeah, I think this is something the industry definitely has its work cut out for it and I feel very grateful to industry bodies like the IAB who are putting a lot of work together around building standards for in store retail media measurements and even things like how to define an impression. And this is going to be really difficult. One of the fascinating things is that there are all different types of formats for in Store retail media, Some of them enable one to one measurement and attribution. Like smart carts, right. Where you have to sort of be an authenticated user and you're being shown an ad and then scanning products as you put them into the cart. And there are other formats that I actually believe in, but they're inherently blunter instruments like in store audio. Right. And one of the biggest challenges. Right. And I won't say that we've painted ourselves into a corner with it because I think it is solvable. But retail media ad buyers have grown up in digital ecosystems. They're used to robust attribution and being able to close the loop. And they're going to demand similar results from their in store investments. In fact, I just presented some insights at NRF showcasing that, that the buyers who are currently investing in in store today say that better measurement and attribution is the number one enhancement that would lead to them investing more. So it's absolutely something we're gonna have to keep working on.

B (17:25)

I think this ties back to your trend, which is this kind of more holistic, organizational, you know, part that needs to happen. And I think thinking about Kroger with its loyalty, its retail media and it's, you know, all of those insights coming together, I think that's only gonna help and make it stronger. And being able to kind of be on the same page within the organization will then help being on the same page for advertisers as well.

A (17:49)

And I smile when you talk about audio because I'm like, I don't know about audio, but I understand what you're saying.

C (17:54)

You're always an audio naysayer.

A (17:56)

Only because we hear the music in the, you know, it's like tracks in the music. And like I, I have a hard time believing that the audio is going to send me to buy Oreo cookies versus the cartoon on the floor of a sidewalk.

B (18:07)

Couldn't you say that about TV though? You know, commercials?

C (18:09)

I feel like plenty of consumers say I pay no attention to TV commercials.

A (18:13)

I think we see the commercial. I mean, I'm not an expert, but I would say we see the commercials enough that there's recall that happens versus you don't go to the store that often.

C (18:21)

Audio is a medium where consumers have some of the strongest recall. Really?

A (18:24)

In a grocery store. Wow. Well, I stand corrected. Which moves us from. I still don't know that it's the best medium. I think QR codes anything where there.

C (18:33)

Is like a. I think there should never be an in store retail media network that relies on audio and audio alone. Except maybe in a C store actually we're in that environment. I could see it working really well. But in the for the most part, I think it's going to have to be layered.

A (18:45)

And I think like sampling to Ariel's.

C (18:47)

Point around experiential, I think that's going to be one of the biggest unlocks is how do you take this really three dimensional immersive experience that is shopping in stores and put all the pieces together. Right. So maybe you have the Oreo crosswalk as you walk into the store and then you have a digital sampling station or traditional sampling station and then you have audio telling you.

B (19:08)

You can involve. I learned this in college. The more senses you involve, the better off someone's gonna remember it.

A (19:13)

That's very true. And so I know we're moving away from the proof of concept stage into reality and this is it. Gotta figure it out. Tell me before we wrap this segment, is there a surface that is more optimal or is it really that layered piece like is the parking lot better? Is the sidewalk better, is the digital screen better, is the audio better sampling?

C (19:33)

I have a whole chart about this. I don't know if we can link it in the show notes or something like that.

A (19:37)

You can, I can use it.

C (19:38)

But I think what's fascinating about in store retail media and I was getting at this is that there's so there's such a diverse array of formats and it's going to unfold really differently than online. Right. The way consumers shop on websites is relatively homogenous. And it makes sense to say your retail media program on your website should have sponsored search, should have display ads. But when you think about how consumers shop in physical stores, their behavior really differs depending on the type of store environment you're in. So something like a smart cart to me makes a lot of sense in a grocery store, but it makes a lot less sense in a C store where it's a smaller basket size, you have less room to move around the store. Right. I think mobile app connectivity makes a lot of sense in a big box store or a home improvement store where maybe you have more product to navigate or need more information order to build the confidence to purchase. So there isn't one playbook for in store. And I think what's going to be really important is for retailers to think through like what is our in store environment like and what are the technologies and surfaces that could actually enhance our consumer shopping experience.

B (20:42)

That's what I was gonna say. I feel like whatever it is it's gotta add value and not distract. And so I could think there is no one format that's gonna be the format that's gonna work. But I think that a layered approach I think is the best option. You know, where you're kind of having it all work in concert together to really reinforce the message.

A (21:02)

Speaking of reinforcing the message, round three is where you're gonna give me your show stopping argument. This is where you give me your strongest case, why your trend is the one to watch in 2026. This is your closing argument, your signature flourish, your this is why I'm right moment. Sarah, take it away.

C (21:24)

Okay. Retail media gets a lot of attention because of its top line numbers. They're really impressive. We're forecasting over $70 billion in ad spending this year. And by 2029, we're forecasting that retail media alone will make up about 1/5 of all digital ad spend spend. But the fact is it's still concentrated to primarily one player. When you strip Amazon out of the ad spend numbers, we're looking at about $14 billion this year and between 3 to 4% of digital ad spend. So that tells you that we're actually still very early. Even though if it feels like we've been talking about retail media for a long time, most retail media dollars are still concentrated in e commerce environments. But as we've mentioned on this podcast, most sales still happen in physical stores. So that's really the critical unlock to activating the majority of retailers. But moving into in store is not just a retail media problem, it's an organizational one. And that's why we have to restructure these organizations to build for that future success.

A (22:17)

Arielle.

B (22:18)

I mean, Sarah already laid out some of my argument for me, so that's really easy. I mean, the in store piece is critical. We can't ignore the fact that the majority of sales still take place there. And I think that to again secure the confidence of both internal and external stakeholders, retailers are really going to have to bring it this year and really try to make the in store retail media experience work for both consumers and advertisers.

A (22:48)

And the winner is. Is there a drum roll?

C (22:51)

Wait, is there a winner?

A (22:52)

Yes.

C (22:52)

I mean, I thought the jury was out on that. Okay, who is it?

A (22:56)

Well, that's the thing, you guys. I don't think the trends can happen in a silo and they have to go together. Completely agree. Even in the way you were describing your closing argument, everything is so intertied. Originally, being an ex merchant, I was I was like, yeah, they have to figure out how to work together. And so reorganizing. But at the same time, everybody knows how much I believe in the store. 80% of sales are in a store. And so it's really, truly a missed out on footfall if you don't figure out how to turn that into an engaging environment for help with sales.

C (23:28)

This is so suspenseful.

A (23:30)

So I think it's a tie.

B (23:31)

Oh, Jesus.

A (23:32)

And that's all the time we have.

B (23:34)

I like a tie. Well, it's all so you know, it is all from your brain. So you are the winner. Oh, it was a little bit for my brain too.

A (23:44)

No, you cover this all the time. I just read your article that you published a couple weeks ago around the different predictions that you have. That's all the time we have for today. Thank you, Sarah.

C (23:53)

Thank you for having me.

A (23:53)

Thanks, Arielle. Thank you. And thank you, listeners. And to our team that edits the podcast, please leave a rating or a review and remember to subscribe. I'll see you for more reimagining retail next Wednesday. And on Friday, join Marcus for another episode of behind the Numbers, an E marketer podcast. The end.

C (24:14)

Marcus, say something nice.

A (24:16)

That's his nice.

C (24:18)

Victoria, we're gonna miss you a lot.

A (24:20)

Aw, thank God. The poor.

C (24:25)

Yeah.

A (24:26)

Hello, Hello, Hello. Hello.

C (24:29)

Hi. Hi.

B (24:29)

Hi.

C (24:30)

All at the same time, right?

B (24:30)

That's not helpful.

C (24:31)

Right. We're harmonizing. We're starting an emarketer band.