Retail Media Didn’t Fail, It Was Built on Incomplete Store Understanding

Retail media is going through a moment of reflection. Over the last few weeks, we’ve seen headlines about Stratacache UK collapsing just months after major retailer partnerships were announced. For some, this becomes evidence that retail media is overhyped or fragile.

But I’m certain that’s not what’s really happening.

Retail media isn’t failing, it’s maturing. And like most maturing markets, it’s starting to expose an issue that has been there from the beginning: most of the time it has been built on an incomplete understanding of the store.

The real constraint was never screens or software

There’s a natural instinct in retail media right now to equate progress with investment with more screens, more networks, more ad inventory. Increasingly, more capital is being deployed into in-store digital screen networks as the default starting point.

But this is where things get interesting. Because in several cases, including recent high-profile retail media partnerships that have since been reconsidered or unwound, the assumption has been that infrastructure alone creates value.

Install the screens, plug in the network, and demand will follow. But retail doesn’t work like that. Not sustainably, at least.

You can’t monetise what you don’t fully understand

The fundamental issue isn’t the idea or impact of in-store media. It’s the lack of visibility into what makes each store perform in the first place.

Too often, retail media is built on top of partial store data, generic audience assumptions, fragmented estate knowledge and “average store” planning models. When that happens, investment naturally flows to the most visible layer, the screens, rather than the most important layer, the store itself.

Screens don’t create understanding. They amplify whatever understanding already exists. And, if that foundation is weak, scale only makes the inefficiency bigger.

The overlooked opportunity: existing physical assets

In the rush to digitise stores, it’s often missed that retailers already own powerful in-store assets. Endcaps, gondolas, high-footfall zones, category adjacencies, promotional hotspots, seasonal flexibility, category depth differences by location.

These are not abstract concepts, they are monetisable retail media surfaces and in many cases, they are still not fully mapped, understood, or optimised at a store-by-store level.

So we jump to digital screens as the default “modern” solution…

In reality, many retailers haven’t yet exhausted the value of the physical environment they already control.

The hierarchy of retail media maturity is upside down

The current pattern in the market often looks like this: install digital screens, build a media network, try to layer in measurement and then attempt to understand store performance.

But, the sequence should be:

1. Understand every store in detail
2. Map all physical, digital and audio opportunities within it, including what products are ranged in that location and what products are top sellers
3. Build a unified view of how location factors drive performance
4. Then decide where, and if, digital screen investment actually adds incremental value

This is really important because not every store needs the same media solution, and not every store needs screens to monetise effectively.

This isn’t an argument against digital screens.

There is absolutely a place for new in-store digital technology in retail media. But it works best when it comes after understanding of stores, not before it.

When retailers have a clear, granular view of how each store actually performs, where attention naturally sits, and what opportunities already exist within the physical environment, then decisions about digital screens become far more grounded.

Once this has been completed, screens stop being a speculative rollout and start becoming a targeted and intentional layer within a wider in-store strategy.

In other words, digital screens don’t need to lead the conversation.

The value of the store 

Every conversation about retail media eventually ends in the same place: We need to understand the store better.

Stores are not interchangeable inventory points. They are complex, variable systems influenced by catchment and footfall, category mix and space allocation, local demand patterns, physical layout and asset positioning, operational constraints and increasingly, digital and physical interaction points

Until those variables are understood at a granular level, retail media will always be optimising in the dark.

What the recent market signals are really telling us

In my opinion, there is too much focus on activation and not enough focus on understanding. Too much investment in delivery mechanisms, and not enough investment in the intelligence that tells you what to deliver, where, and why.

Start with the store. Then decide on the screens.

The opportunity ahead is not to slow down retail media investment. Before retailers commit significant capital to digital screen rollouts, they should be asking a simpler question:

Do we actually understand what is already happening in our stores?

In many cases, the biggest untapped retail media opportunity is not a new network. It’s the optimisation of what already exists: physical space, store layouts, product adjacencies, promotional structures, local performance differences etc etc. Once that is understood properly,  in-store technology investments become a choice, not an assumption. And that is a very different starting point.

I’m confident that the retailers who win the next phase won’t be the ones with the most screens, they’ll be the ones who understand their stores best.

Dorian Spackman, Founder and CEO of Colateral

Learn more about how Colateral is bridging the gap between physical and digital retail media.