Next in Media: What Happens to Retail Media When Agents Start Taking Over Shopping?
Host: Mike Shields
Guest: Sarah Hofstadter, Chairwoman of Profitero
Release Date: July 22, 2025
Introduction
In this episode of "Next in Media," host Mike Shields engages in a deep conversation with Sarah Hofstadter, the Chairwoman of Profitero. Profitero, a retail data firm acquired by Publicis a few years prior, offers Sarah a comprehensive perspective on the evolving landscape of retail media. The discussion delves into the transformation driven by technology and data, the dominance of major players like Amazon and Walmart, the potential impact of agentic AI on shopping, and the future role of agencies in this dynamic environment.
The Evolution of Retail Media
Sarah Hofstadter provides an overview of Profitero’s journey and its role in the retail media sector. Initially founded in 2010 to help brands understand their digital shelf presence, Profitero has expanded its offerings to include managed services and strategic consulting, maintaining a strong foundation in data and technology.
“Profitero was originally founded as a software capability specifically to help brands understand how they're showing up on the digital shelf.” [02:03]
She explains how retail media has grown significantly, especially during the COVID-19 pandemic, highlighting the necessity of robust infrastructure to support this expansion.
The Dominance of Big Players: Amazon and Walmart
The conversation shifts to the influence of retail giants like Amazon and Walmart in the retail media space. Sarah discusses how Amazon stumbled into advertising as a revenue stream, while Walmart approached it more strategically, establishing Walmart Connect (WMC) as a formidable player.
“Walmart... what they've done with Walmart Connect is nothing short of extraordinary in terms of, in a really short period of time.” [04:32]
Sarah contrasts the advertising diversification of Amazon and Walmart, noting how Walmart’s comprehensive approach—including in-store ads, app ads, search, display, and programmatic options—sets it apart.
“Now what does that mean for our target? What does that mean for a Kroger?... there’s almost like there’s tier one and there’s everyone else.” [05:00]
Challenges of Multiple Retail Media Networks
Mike Shields raises concerns about the sustainability of having numerous retail media networks, questioning whether consolidation is inevitable due to the complexity and fragmentation of the market.
“Do you think a shakeup is inevitable because of a need for standards or because of the big guys being so much bigger or no?” [05:26]
Sarah acknowledges the desire for consolidation among buyers but highlights the challenges due to differing incentives and organizational structures between retailers and brands. She emphasizes the complexity of coordinating across multiple platforms and the difficulty brands face in managing budgets across a fragmented landscape.
“There’s almost like there’s tier one and there’s everyone else.” [05:00]
The Role of Brand Organizations
The discussion turns to how brands are organizing their teams to manage retail media effectively. Sarah points out that many FMCG companies are undergoing multiple reorganizations to better integrate digital commerce and retail media, indicating a shift towards more centralized and data-driven strategies.
“It's the difference between playing catch and playing dodgeball.” [11:10]
She stresses the importance of brands being attuned to shopper behavior across both physical and digital channels, advocating for a mindset that prioritizes seamless integration over traditional budget allocations.
“If you are searching for chips on Walmart, you better damn well be showing up.” [11:55]
The Future of Retail Media and AI
Mike Shields introduces the topic of agentic AI and its potential to revolutionize shopping. Sarah expresses skepticism about the immediate impact but acknowledges that AI will change how people shop and how retailers guide the shopping experience.
“Shopping is not over. The question is, how are people shopping.” [20:36]
She envisions a future where AI assists in workflow management and ad automation, making shopping more efficient but also raising concerns about brands being devalued if consumers become too passive.
“If you're not going to invest in brands, you're not going to end up being discoverable under any circumstances.” [22:45]
The Role of Agencies
The conversation explores the evolving role of agencies in the retail media landscape. Sarah draws parallels to the integration of search and social media into traditional advertising, suggesting that agencies are gradually upskilling to handle the complexities of retail media.
“Are we at that tipping point of integration or not?” [15:48]
She emphasizes the need for agencies to adopt a consultative approach, helping brands navigate the fragmented media environment and ensuring that retail media is integrated into broader commerce strategies.
“Retail media is just part of that [end-to-end commerce ready].” [16:53]
Conclusion
As the episode wraps up, Sarah reflects on her role within Profitero and its integration into Publicis. She underscores the importance of maintaining sustainability and agility amid the ever-changing retail media landscape.
“But I do think that the agencies are raising the bar and coming back to the client saying this is what being end to end commerce ready means.” [16:12]
Mike Shields thanks Sarah for her insights, highlighting the ongoing challenges and opportunities in retail media as technology and consumer behavior continue to evolve.
Key Takeaways
- Retail Media Growth: Driven by robust data and technology, especially accelerated by the COVID-19 pandemic.
- Big Players’ Influence: Amazon and Walmart are leading the charge with diversified and strategic advertising solutions.
- Market Fragmentation: Multiple retail media networks create complexity for brands in managing and allocating budgets.
- Organizational Shifts: Brands are reorganizing to better integrate retail media and digital commerce into their strategies.
- AI’s Impact: Agentic AI has the potential to transform shopping experiences, though its full implications are yet to be realized.
- Agency Evolution: Agencies must adopt a consultative and integrated approach to support brands in the fragmented retail media landscape.
Notable Quotes:
- “Profitero was originally founded as a software capability specifically to help brands understand how they're showing up on the digital shelf.” [02:03]
- “If you are searching for chips on Walmart, you better damn well be showing up.” [11:55]
- “Retail media is just part of that [end-to-end commerce ready].” [16:53]
- “Shopping is not over. The question is, how are people shopping.” [20:36]
This episode provides a comprehensive overview of the current state and future potential of retail media, highlighting the pivotal roles of data, technology, and strategic organization in navigating this rapidly evolving sector.