AI and Data Privacy to Fuel Retail Media Network Expansion by 2025

January 28, 2025

The retail media network (RMN) landscape is on the cusp of a major transformation driven by advancements in artificial intelligence (AI) and an increasing focus on data privacy by 2025. Retailers and non-retail brands are intensifying their efforts to leverage these technologies to unlock unprecedented growth and innovation within RMNs. This evolution promises to reshape customer interactions and advertising strategies in a profound way. As we dive into this topic, we’ll explore key trends and developments expected to define the future of RMNs, emphasizing the crucial roles AI and data privacy will play, as well as the advent of hybrid models.

The Rise of In-Store Retail Media Networks

In-store retail media networks are poised for substantial growth, presenting advertisers with unique opportunities to engage customers precisely at the point of purchase. Melanie Babcock, Vice President of Orange Apron Media at The Home Depot, highlights that while RMNs have garnered real attention, their full potential remains largely untapped. Orange Apron Media, Home Depot’s RMN, launched a self-service platform for advertisers called Orange Access, aimed particularly at non-endemic brands, signaling growth focus for 2025. The inaugural “InFronts” advertiser event further underscores the deepening interest and investment in RMNs.

These in-store networks offer immense reach and advertising opportunities, although they come with their set of challenges. Each retailer’s network needs to be meticulously tailored to align with its specific store environment, making development and implementation complex. Despite these challenges, the growth potential for in-store RMNs lies in their ability to significantly influence consumer purchase decisions. This potential will drive continued innovation and expansion in the coming years, as advertisers focus on capturing the critical moments just before customers make purchases.

AI’s Role in Enhancing Customer Experiences

Artificial intelligence is anticipated to be pivotal in elevating interconnected RMN experiences, enhancing customer shopping journeys across multiple channels, including mobile, in-store, and TV. Successful RMNs aim to offer seamless shopping experiences, ensuring that ads integrate smoothly into the customer’s path without causing disruption. AI will automate various processes and workflows, thus amplifying personalization and operational efficiency, delivering a cohesive unified shopping experience.

As customer expectations evolve, driven by comprehensive interconnected shopping experiences, patrons demand more personalized interactions, diverse delivery options, and smooth returns. AI’s role in project planning and home management promises to significantly enhance these facets, raising the bar considerably for customer experiences. By 2025, AI will be integral in crafting more personalized and efficient shopping journeys, turning complex retail processes into highly tailored consumer interactions.

The Emergence of Hybrid RMN Models

As retailers pursue the launch or the refinement of their media programs, hybrid RMN models are expected to become increasingly prevalent. These models blend in-house technology with third-party solutions, relieving IT teams from overwhelming burdens while ensuring scalable growth. Aran Hamilton, CEO of Vantage, asserts that hybrid models facilitate faster launches and maintain strategic control, accelerating both the adoption and innovation processes.

The balanced approach offered by hybrid RMN models allows retailers to harness the strengths of both in-house and third-party technologies. This strategy supports the rapid development and deployment of RMNs, ensuring retailers remain agile and responsive within the evolving landscape. Anticipated to be significant by 2025, hybrid models will be a primary driver for RMN growth and innovation, providing retailers with the flexibility to scale operations quickly and efficiently.

Non-Retail Brands Entering the RMN Space

The retail media network space is expanding beyond traditional retail brands as non-retail companies increasingly leverage first-party data to create comprehensive “commerce media” ecosystems. Daniel Aks, President of Undertone, predicts a rise in non-retail companies utilizing their consumer data for targeted advertising, encompassing sectors like financial services, transportation, and hospitality. These industries boast extensive data on consumer purchase behaviors, travel patterns, and lifestyle preferences, which are invaluable for designing effective advertising strategies.

The entry of non-retail brands into the RMN space marks a significant shift as these entities contribute valuable data and insights to enhance advertising efficacy. By making strategic use of their first-party data, non-retail brands can design highly targeted and personalized advertising campaigns, driving innovation and growth across the RMN environment. This broadened involvement of non-retail brands highlights an important trend in leveraging data to better understand and engage with consumers, a trend certain to gain momentum by 2025.

Data Privacy and Collaboration

Data privacy lies at the heart of RMNs as customer data fuels multi-channel experiences and digital advertising campaigns. Retailers must adopt advanced privacy-enhancing technologies and utilize clean rooms to ensure secure data collaboration. Regina Ye, CEO of Topsort, underscores these solutions in facilitating secure data collaboration, thereby optimizing results while maintaining stringent customer privacy protocols amidst evolving regulations.

Clean rooms enable multiple parties to securely amalgamate data without actual data transfer, addressing challenges in assessing advertisement effectiveness across diverse platforms. As data privacy regulations continue to evolve, it’s imperative for retailers to prioritize regulatory-compliant data management methodologies. Ensuring customer trust through privacy measures and maintaining the integrity of the RMN strategies will be crucial for continued success in the retail media landscape.

Shifting Metrics for RMN Success

The retail media network (RMN) landscape is poised for a significant transformation fueled by advancements in artificial intelligence (AI) and a heightened emphasis on data privacy by 2025. Both retailers and non-retail brands are ramping up their efforts to harness these technologies to unlock unparalleled growth and innovation within RMNs. This evolution is set to dramatically reshape customer engagement and advertising strategies. In this discussion, we’ll delve into the pivotal trends and developments anticipated to shape the future of RMNs, highlighting the essential roles that AI and data privacy will play. Additionally, we’ll address the emergence of hybrid models, which combine traditional retail with innovative digital strategies. By examining these factors, we’ll gain insight into how RMNs are adapting to a rapidly changing landscape, ensuring they remain at the forefront of customer experience and advertising efficacy. This comprehensive look into the future of RMNs underscores the transformative potential of integrating AI and strict data privacy measures, promising a new era of retail innovation.

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