Insights

(Source: BCG)

Big retailers are already racing toward a $100 billion high-margin annual revenue prize in retail media. Companies in other industries characterized by extensive customer interaction and deep first-party data - travel and tourism, for example - have a similar opportunity. For companies already implementing personalization programs, retail media can be a high-profit extension of their current efforts.

But building the business is a heavy lift, especially in terms of data, technology, and skills. Amazon has already grabbed a leading share (some estimate as much as $26 billion in 2021 revenue), and other major retailers, including Walmart, Target, and Kroger, are moving fast to establish their own positions. The good news for potential players is that we expect the market to subdivide into one broad, and several specialty, media markets in segments such as consumer electronics, health and beauty, and DIY. Because of the operative dynamics, the top three or so companies in each submarket will dominate, while others will find themselves largely shut out. Time is short for those that want to play.