7 Challenges Lead to Retail Media Fragmentation: Biggest Bottleneck isn’t Budget

Monopoly in the marketing and advertising industries can be both a bane and a boon. It depends on how you are experiencing it. Google becomes synonymous with search engines, and Meta becomes synonymous with social media advertising. 

Retail media networks are still developing. There are hundreds of outlets and thousands of spaces where retailers reach their audiences. This has become a success story in advertising. According to WARC, global retail media spend is expected to reach $196.7 billion in 2026, surpassing the combined spending on linear and connected TV (CTV). 

As brands continue shifting budgets toward retailer-owned advertising platforms, retailers are racing to launch new media networks built on first-party shopper data. 

With great success comes more obstacles. Every new retail media network adds another platform to manage, another ROAS framework to interpret, another dashboard to navigate, and another set of audience data. 

Skai’s 2026 State of Retail Media clearly shows how brands should treat RMNs as a reality. It presents seven challenges brands face while operating within the frameworks of several RMNs. 

Growth is adding more complexity

Amazon Ads operates differently from Walmart Connect. Target Roundel has its own shopper data and attribution model. Grocery retailers, pharmacy chains, convenience stores, and marketplaces continue to build their own advertising businesses, each with unique technologies and reporting standards.

Research from Skai and Stratably shows advertisers currently work with an average of six retail media networks, a number expected to rise to 11 by the end of 2026. Instead of simplifying media buying, expansion multiplies complexity. 

As Joshua Dreller, Senior Director of Product Marketing at Skai, writes in the report: 

“That structural fragmentation is not a phase the industry is passing through. It is the nature of the channel itself, because every retailer is, by definition, its own walled garden.” 

That observation fundamentally changes how brands should think about retail media. It shows that fragmentation is the environment in which marketers must learn to operate. 

Seven retail media fragmentation challenges that challenge brand strategies

Operational silos slow down execution

Managing multiple retail media networks often leaves marketing teams working in isolation. 

Regional teams optimize different retailers using different tools; agencies specialize in separate platforms, and internal learnings rarely flow across markets. What works on Amazon may never reach teams managing Walmart, Carrefour, or Tesco. 

Rather than creating a unified commerce strategy, organizations often end up managing several disconnected retail media businesses under one corporate umbrella. 

Measurement remains inconsistent

Measurement remains one of retail media’s weakest links. 

Every retailer defines performance differently. Attribution windows vary. Return on ad spend calculations differ. Some emphasize new-to-brand customers while others prioritize sales lift or basket value. 

This makes comparing performance across retailers extremely difficult. 

According to Skai’s 2026 State of Retail Media report, only 15 percent of brands report strong confidence in their retail media measurement capabilities, even as seven in ten advertisers meet or exceed campaign goals. 

WARC echoes this concern, noting that incrementality and cross-channel measurement remain among the industry’s biggest unresolved issues, despite strong campaign performance. 

Talent does not scale as easily as budgets

Retail media expertise remains highly platform-specific. 

An advertiser experienced in Amazon Ads cannot automatically apply those same optimization techniques to Walmart Connect or Kroger Precision Marketing. 

Each network requires different workflows, reporting systems, and optimization approaches. 

As retail media networks proliferate, brands increasingly require specialists rather than generalist digital marketers, creating both hiring and training challenges. 

Retail readiness extends beyond advertising

Success in retail media depends far more on media buying than on other factors. 

Product pages must be optimized. Inventory must remain available. Pricing must stay competitive. Reviews must remain positive. Creative assets require constant updates. 

Retail media has evolved into a cross-functional discipline, so marketing, merchandising, e-commerce, and supply chain teams all influence advertising outcomes. 

Without operational alignment, additional media spending often delivers diminishing returns. 

Data remains trapped inside walled gardens

Retail media’s greatest strength is also its biggest limitation. 

Retailers possess valuable first-party purchase data, but each keeps it within its own ecosystem. 

Brands can understand shoppers on individual retailers’ platforms, but creating a unified customer journey across retailers remains difficult. 

As omnichannel marketing becomes more important, disconnected shopper data increasingly limits strategic decision-making. 

Administrative work keeps growing

Every additional retail media network introduces another contract, another billing process, another reporting template, and another dashboard. 

Instead of spending time optimizing campaigns, many marketing teams spend hours consolidating spreadsheets, validating metrics, and reconciling reports. 

This hidden operational cost rarely appears in budget discussions but continues to consume valuable marketing resources. 

Scaling has become an operational challenge

Perhaps the biggest realization for marketers is that growth is becoming harder to manage. 

Retail media is no longer limited by advertiser demand. It is increasingly limited by operational capacity. 

More networks do not automatically translate into better performance if organizations lack the infrastructure to manage them effectively. 

AI can be a fix for complexity, but with shortcomings 

Artificial intelligence is increasingly being positioned as the solution to retail media’s operational challenges. 

Skai’s latest report shows brands are shifting their GenAI investments away from content generation and toward campaign optimization, analytics, and workflow automation. More than half of advertisers are also reallocating display budgets from open-web DSPs to retail media DSPs, attracted by stronger closed-loop measurement capabilities. 

AI can automate bidding, reporting, budget pacing, and campaign optimization. 

What it cannot do is standardize an industry in which every retailer owns different customer data, measurement methodologies, and technology stacks. 

Three major challenges continue to limit AI’s ability to solve retail media fragmentation:

• Data accessibility. Shopper data remains locked inside individual retail media networks. Since retailers rarely share raw first-party data, AI models cannot build a truly unified view of customers across platforms.
• Context and consumer insights. AI can surface trends and automate reporting, but understanding why shoppers behave in a certain way still requires human judgment.  
• Consumer trust and privacy. As retailers increasingly rely on first-party data, they must balance personalization with responsible data practices. Consumers are becoming more aware of how their shopping data is collected and used, while regulations continue to evolve.  

Cut to the chase

The next phase of retail media will likely be defined less by media budgets and more by operational maturity. The opportunity remains enormous, and so does the complexity. Brands that recognize fragmentation as a permanent feature rather than a temporary flaw will be better positioned to scale sustainably in the years ahead.