In this second part of their interview with retail media expert Andrew Lipsman, founder and chief analyst at Media, Ads and Commerce, hosts Michael LeBlanc and Steve Dennis explore the future of retail media networks. Lipsman shares insights on the retail media flywheel concept, balancing customer experience with ad revenue, and predicts massive growth in in-store retail media. The episode also covers recent economic news, tariff impacts, and notable earnings reports from Amazon and Apple.
In the latest episode of the Remarkable Retail podcast, hosts Michael LeBlanc and Steve Dennis continue their conversation with retail media expert Andrew Lipsman, founder and chief analyst at Media, Ads and Commerce, exploring the evolution and future of retail media networks.
The episode kicks off with an in-depth news segment covering significant economic developments. The hosts discuss the recent GDP drop in the US, which they note is primarily driven by increased imports and inventory buildup as retailers front-loaded inventory ahead of tariff implementations. They analyze the recent disconnect between poor consumer confidence numbers and actual retail spending patterns. The hosts also examine tech company earnings, with most reporting strong results except for Apple, which is facing challenges related to tariffs and China exposure. Apple's response to tariffs—shifting manufacturing to India and Vietnam rather than the US—highlights unintended consequences of the trade policies. The news segment concludes with a discussion of Amazon's earnings and the surprising termination of Kohl's CEO Ashley Buchanan over an improper vendor relationship.
In the interview segment with Andrew Lipsman, the conversation centers on the mechanics of successful retail media networks and future trends. Lipsman explains his concept of the "retail media flywheel," noting that when this flywheel takes off, it produces exponential rather than linear growth. He emphasizes that while Amazon pioneered this approach, other retailers can build their own flywheels tailored to their specific assets.
A significant portion of the discussion addresses concerns about whether retail media might compromise customer experience. Lipsman acknowledges this concern but believes it can be managed with thoughtful execution and relevant advertising. He points to Trader Joe's as an interesting counterexample—a retailer explicitly rejecting retail media to focus on merchandising excellence.
For retailers considering or developing retail media networks, Lipsman advises realistic expectations, particularly for mid-size and smaller players who may benefit more from joining aggregated networks rather than building walled gardens. He cautions that many retailers overvalue their first-party data and underestimate what's needed to monetize it effectively.
Looking to the future, Lipsman predicts that while on-site search advertising will continue to drive significant revenue, the big growth opportunities lie in streaming TV advertising and in-store media. He estimates in-store advertising represents a potential $20-40 billion opportunity, noting that physical stores account for about 5% of all media time spent but currently capture only 0.1% of ad spending. While acknowledging implementation challenges, he points to successful examples outside the US, particularly in the UK and Asia, as evidence of the model's viability.
YouTube episode Photo by Nathan Cima on Unsplash