The local outlook for retail media growth looks positive, but many challenges lie ahead for businesses without solid data foundations, writes Amperity’s senior technical account manager, Belinda Lloyd.
Retail media is growing fast in Australia. In the past year alone, seven in ten advertisers and agencies have increased their spend, with 77 per cent now working with three or more retail media networks, according to a 2025 report from IAB Australia.
Major Australian brands, including Metcash, Wesfarmers, Coles, Woolworths and Australia Post, are expanding their capabilities through digital screens, in-store radio, and sophisticated audience targeting across their store networks.
As the market matures and retail media networks expand and grow, many organisations will start to come up against data challenges. Without a solid data foundation, even the most ambitious retail media network can’t prove actual sales.
Many retailers believe the challenge is about increasing advertiser demand. In reality, it’s about data. Most retailers sit on massive, fragmented datasets scattered across ecommerce, loyalty programs, and in-store transactions. Without a unified identity layer to bring this data together at the customer level, even the most sophisticated media platforms struggle to deliver performance and results.
A significant obstacle to retail media network success is the reliance on rented, third-party data, rather than owned first-party intelligence. For next-generation networks, a critical shift is underway that is key to transitioning from impressions and clicks to measurable impact.
For years, retail media networks relied on data onboarders to link retailer audiences with advertiser demand. That process worked; until it didn’t. Increasing regulation, cookie deprecation, and privacy concerns have eroded the reliability and legality of third-party identity graphs.
Delays and inefficiency: What was once a bridge between retailers and advertisers has now become a bottleneck. The process of transferring and anonymising audience data through a third-party intermediary can take one to two weeks or longer. Campaigns lose agility, network managers lose visibility, and advertisers lose confidence in the data powering their investment.
Lack of transparency: Beyond the delays, these legacy workflows obscure the customer connection that makes retail media so valuable. Onboarders typically remove person-level identifiers, preventing retailers from tying ad exposure to actual sales. It limits feedback, with data flowing out to ad platforms but little insight returning to inform future campaigns.
Compliance risk: Onboarders rely on third-party data sources that are increasingly subject to legal and regulatory scrutiny. [IAB Australia] As governments and browsers limit how this data can be collected, shared, and applied, the approach is becoming less sustainable or noncompliant altogether. New privacy legislation and heightened consumer expectations around data use are prompting retailers to offer clearer messaging and a stronger value exchange.
Cost and complexity: Finally, scaling these systems often means adding more people, not smarter automation. Managing multiple vendors, file transfers, and reconciliation processes drains time and resources that could otherwise go toward optimisation and strategy.
Together, these challenges make clear why the third-party model can’t sustain the next generation of retail media networks.
Today’s networks need speed, transparency, and accountability. In a performance-driven environment, the inability to measure and prove impact is a liability. Advertisers are demanding transparency and proof of sales impact – and budgets will follow the retailers that can deliver it.
Forward-looking retail media networks are taking a different approach, powered by first-party data and real-time intelligence. Instead of relying on external onboarders, they’re turning inward to the data that already lives within their ecosystems, such as loyalty programs, e-commerce transactions, point-of-sale systems, and mobile app interactions.
By unifying this data across all channels, retailers can create durable identity graphs that provide a complete, privacy-safe view of every customer. This shift transforms how networks operate. When a unified identity layer is connected directly to ad networks, it enables a feedback loop that’s faster, more precise, and far more accountable.
Here’s how that’s playing out in practice. Firstly, faster activation: What once took days or weeks can now happen in hours. Same-day audience activation means brands can target in-market customers while they’re actively shopping, allowing campaigns to be responsive to changes in demand.
Closed-loop measurement: Connecting online and offline touchpoints gives retailers the full picture from exposure to purchase. This turns campaign reporting into a genuine measure of sales impact rather than a proxy for engagement.
In-flight optimisation: With real-time visibility into performance, networks can continuously adjust audience segments, creative, and spend to maximise return on ad spend and reduce wasted impressions.
Regulatory resilience: By building on opted-in, first-party data, networks can maintain precision targeting while staying compliant with evolving privacy regulations, preparing them for a future where third-party identifiers are fully obsolete.
This is an operational upgrade and a buffer against the competition. Retailers that can unify identity, activate quickly, and measure incrementality will be the ones that attract repeat brand investment.
As identity resolution becomes the backbone of retail media, the network itself begins to evolve. What started as a monetised media channel is quickly transforming into an intelligence platform, capable of understanding, predicting, and influencing customer behavior across the entire shopping journey.
This evolution is fueled by the growing intersection of customer data, machine learning, and ad-tech interoperability. By connecting first-party data directly into leading ad environments, retailers can activate audiences and measure outcomes without traditional onboarders or manual data transfers. The result is a faster, cleaner, and more transparent exchange of insight between retailers and advertisers.
In this new model, the network delivers intelligence instead of simply filling ad space. It enables brands to understand which customers are most likely to convert, which campaigns drive true incremental sales, and how to optimise spend in real time.
The next generation of networks will look less like ad networks and more like data ecosystems that are agile, measurable, and built on trust. Retailers that invest in this kind of intelligence infrastructure today will define the standard for performance tomorrow.
The payoff is mutual since advertisers gain the transparency and accountability they’ve been asking for, and retailers strengthen their position as indispensable partners in driving growth.
The Australian retail media market won’t slow down any time soon. According to IAB Australia On-site search and off-site extensions are driving strong growth, with retailer data-powered formats seeing significant year-on-year increases. Retailers are actively enhancing their capabilities, particularly in reporting and product expansion.
Major players are investing heavily in new formats, store networks, and strategic partnerships to capture share in this expanding channel.
But scale alone is no longer the differentiator. Success won’t be defined by who can build the biggest network—but by who can build the smartest one.
Without a unified, AI-powered identity, there is no retail media network.
Clean, organised customer data is the foundation for everything. When retailers connect that data seamlessly across systems, they drive faster activation, deeper insights, and measurable business growth for themselves and their brand partners.
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Why Australia’s Retail Media Networks Must Build On First-Party Data – bandt.com.au
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