Big-Box Briefing: Why executive turnover has been a consistent theme in retail media

But in other ways, the news wasn’t terribly unexpected. “Turnover at the top of RMNs has been a consistent theme from the beginning,” Andrew Lipsman, an independent analyst with Media, Ads + Commerce, told Modern Retail. He said he couldn’t immediately think of a single retail media GM or SVP who has led the same retail media network since 2019, when he began covering the retail media industry more closely. One executive with perhaps the longest tenure is Rich Lehrfeld — he’s been SVP and GM of Walmart Connect since October 2020, and earlier this year was promoted to oversee both Walmart Connect International and Sam’s Club Connect.

While the circumstances that led to Monahan’s departure are unclear, one thing that is clear is that it comes at a uniquely challenging time for the industry. Publicly, retailers like to paint their retail media networks as reliable, fast-growing revenue engines with great profit margins. 

But much of the industry’s low-hanging fruit is gone, and it’s getting harder for retail media networks to meet their growth goals. What’s more, some analysts argue that many retail media networks had unrealistic growth expectations to begin with. 

A recent survey from eMarketer and Bain & Company underscored the tough environment retail media leaders face. In a survey of just over 60 retail media leaders, 31% said they expected to come in below their growth plans for this year, while only 18% expected to finish above plan.  “I do think we’re likely to see continued leadership changes as retailers recalibrate what they expect from these businesses,” Sarah Marzano, VP and principal analyst at eMarketer, said in an email.

Albertsons Media Collective, for its part, had this to say in a statement: “Brian played a key role in building Albertsons Media Collective into an important and growing part of our business. We thank him for his leadership and contributions and wish him continued success.” 

In addition to Monahan’s departure from Albertsons, one of the other notable departures in the retail media world this year was Melanie Babcock, who had previously led Home Depot’s Orange Apron Media Network for the past few years, leaving to become chief marketing and growth officer at 1-800 Flowers.

Overall, it’s not unusual for retail media leaders to move around every few years. The circumstances surrounding each of these departures are unique and not necessarily indicative of bigger issues at the retail media network.

One of the biggest issues plaguing the industry right now, analysts say, was setting unrealistic growth expectations to begin with. While Amazon has built a nearly $70 billion ad business, few players can come close to reaching that kind of scale. 

“What I hear consistently is that there are a lot of management consultants running around talking a big game about how big these businesses can be, because that’s work for the management consultants,” said Kiri Masters, founder of the Retail Media Breakfast Club.

Masters coined the idea of the “The Retail Media Doom Loop,” a dynamic that she sees playing out a lot in retail media. The idea is that a retailer, inspired by the size of Amazon or Walmart’s ad business, decides they would like a slice of that pie and launches their own retail media network.

Growth in the first year or two is easy, because a lot of money is moved over from, say, trade or shopper marketing budgets. Then, once the quick wins dry up, growth stalls. After that comes the “underinvestment” stage, where retailers, spooked off by slowing growth, hesitate to invest more in tech or talent to build the retail media network. 

Buyers get frustrated, and then retailers enter what masters calls the “add sparkles” stage, where they roll out a new partnership or format to “fix” the issues with their retail media network. And then the doom loop cycle begins again.

“You need a different type of sales notion to go to a brand and say, ‘Hey, that money that you’re spending on connected TV, you should spend that with us,’” Masters said. “That’s a harder conversation than buying a sponsored product ad unit on a website.”

So what could fix the retail doom loop? For starters, an acknowledgment of the realities of the B-to-B sales cycles. 

“It just takes a lot longer for those deals to materialize and turn into revenue, especially if it’s managed service, and a lot of [retail media networks] still heavily lean on managed service,” Lipsman said.

Lipsman said that some of the most successful retail media businesses seem to be those that have also launched a third-party marketplace, because that creates a more predictable revenue stream, “and because it creates competition that pushes up CPNs and CPCs,” he said. 

In-store media is another big opportunity. But even on-site, retailers are too often “just making a few ad slots available, and it’s just not enough to scale the business,” Lipsman said. “They have to be willing to make more supply available on-site or build better experiences on-site to monetize.”

Sean Crawford, managing director of North America for retail media consultancy SMG, said he’d like to see more cooperation across retail media networks across the industry. 

“Everyone cannot be a walled garden — it’s not possible. If you’re an agency, how do you work with 200-300 networks? You literally can’t,” Crawford said. 

He gave the hypothetical example of a regional grocer with a strong network in the South teaming up with a regional grocer with a strong presence in the Northern U.S. 

“There’s a need for RMNs to start going, ‘I have a complementary audience with you, and we should start thinking about how we access those incremental dollars together, because we’ll have a bigger scale to compete with a Walmart or an Amazon, because we are bigger together,” Crawford said.

But what could also help stop the game of musical chairs happening within the top ranks of retail media networks, Crawford said, is a greater focus on nurturing talent within the industry. Retail media is still a young industry, and as a result, there isn’t a great breadth of talent that has experience leading retail media networks. “That is leading to people just continuously poaching from one to the other,” he said. 

“I think what we need to be really focusing on is actually bringing through this next generation of talent,” Crawford added. “And it’s on the agencies to help do that, [and] it’s on retailers within their own organizations to help do that.” 

What I’m reading

• Target-owned same-day delivery service Shipt has a new CEO: Raj Kapoor, formerly the company’s COO from 2022 to 2025. 
• In other Target news, the company launched its digital holiday toy catalog this week. Alongside it, the company is incorporating a new list-scanning feature that allows people to upload handwritten shopping lists. 
• Amazon quietly laid off around 1,000 workers, per Reuters, mainly in its Stores division.

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