Kiri Masters on what’s next in retail media: US vs. Europe & the 2026 edge

00:00:00: What does the future of retail media look like if consumers spend more time with AI companions rather than on a retailer.com in the early stages of their buying journey?

00:00:32: Hello, hello, welcome dear listeners.

00:00:34: Glad to have you on this show.

00:00:36: I'm Haike Larry, Director of Partner Marketing and Consultancy at Zalando Partner Marketing Services, helping connect fashion, beauty and lifestyle brands to consumers all over Europe.

00:00:48: This is already our last episode of twenty twenty five.

00:00:52: And I think it's really true, times flying when you have fun.

00:00:55: And definitely, it was so much fun becoming the podcast host of Inside Fashion Marketing this year.

00:01:02: And we are closing with a special, a big bang, so to say, by having here Kiri Masters, who's joining us today.

00:01:12: She's a retail media industry

00:01:14: expert,

00:01:15: a columnist, and a seller podcast host.

00:01:18: Every morning, she shares a brief ten-minute episode of the Retail Media Breakfast Club.

00:01:23: Such a pleasure to have you here.

00:01:25: Big welcome to you, Kiri.

00:01:27: Thank you, Haike.

00:01:28: Thank you for having me.

00:01:29: Fantastic.

00:01:32: You share an episode of your podcast every morning.

00:01:35: Kudos to you already for this.

00:01:38: Tell us, listen us about it.

00:01:40: Yeah, sure.

00:01:40: So it's called Retail Media Breakfast Club and it is Monday to Thursday now because I've realized that no one was really listening or reading on a Friday.

00:01:48: So it's almost daily, but it is a little snippet into trends, research, discussions happening in the retail media industry.

00:01:58: I'm primarily focused on the US market because There is just so much going on in retail media.

00:02:06: It's impossible to keep up with what's happening in retail media in every market.

00:02:11: I sort of rotate perspectives between different stakeholders in the industry.

00:02:17: Of course, you've got brands selling online.

00:02:21: retailers with their retail media network the solution providers so technology and agencies and consultants and I typically find that.

00:02:29: People come from one of those areas or maybe one or two of those areas and they may not understand the perspectives of the other.

00:02:36: so for a brand or an advertiser they understand how.

00:02:41: the budget gets spent in their world and what their priorities are and what are their incentives, but they may not understand what are the incentives for the retailer running that retail media network.

00:02:53: So there's a lot of unspoken I don't know, drama, I guess.

00:02:59: And it is interesting when you tease out, oh, OK, this is the real incentive of these different stakeholders.

00:03:04: Why are they acting this way?

00:03:06: Or why are they doing this thing that doesn't seem to make sense to the other stakeholders?

00:03:10: So I do find that.

00:03:12: the space in between those different players is very interesting in the relationships that they have with each other.

00:03:18: Oh yeah, that sounds very familiar.

00:03:21: Also the word drama you mentioned here.

00:03:23: So what is also interesting, you talk about different viewpoints is that if I'm not mistaken, you're joining us from the US today.

00:03:30: So we have now our first cross-continent podcast episode even.

00:03:36: Yeah,

00:03:36: also maybe very interesting to see if there are any differences between Rita and me.

00:03:42: in Europe and the US.

00:03:43: So yeah, let's see.

00:03:44: But maybe you can share with us first, what is your background in retail media and how did you get to this area?

00:03:51: Yeah, so you may have noticed from my accent, I'm not American, even though I cover the US market primarily.

00:03:56: So I'm from Australia.

00:03:58: And nine years ago, I started a marketing agency that was focused on Amazon and helping brands sell on Amazon and drive sales there and eventually set up advertising campaigns.

00:04:16: I was pretty early on in the Amazon marketing ecosystem.

00:04:22: I grew that agency primarily through educating around Amazon and how it worked.

00:04:28: I did a lot of blogs, started a podcast in to contribute to different publications like Forbes in twenty seventeen as well.

00:04:39: And that's sort of how we got the word out about my agency Bobsled Marketing.

00:04:44: And we eventually started working with different retail media channels as well.

00:04:51: And then I sold that company in twenty twenty two.

00:04:54: to another agency called Acadia and worked there for a couple of years.

00:04:58: And then this year, twenty twenty-five was the year that I started Retail Media Breakfast Club in in earnest as a full-time industry commentator.

00:05:08: Okay,

00:05:09: wow.

00:05:09: So a real expert and early mover here.

00:05:12: So again, I discovered similarity.

00:05:15: So also ZMS started, yeah, a bit more than nine years.

00:05:19: So we celebrated our tenth year anniversary just

00:05:22: this year.

00:05:23: And also we're happy to be quite early on, but therefore saw also the industry change a lot, right?

00:05:30: And the offer and what retail media is all about.

00:05:35: So maybe we start with a little recap of this year.

00:05:40: When you look at all of your retail media breakfast, what were the topics you spoke about the most?

00:05:47: Or were there any big trends that you saw evolving this year?

00:05:52: Yeah, well the big one and I've been talking about this a lot recently is a gentic commerce and AI enabled shopping and that really I wouldn't say it came out of nowhere this year, but it really is the first year that we're seeing, I think, some meaningful engagement from consumers with AI platforms, either at the start of their shopping journey to do research, to compare different options, and then we're also starting to see, especially in the last couple of months, AI platforms and retailers build out very meaningful sort of mid funnel and purchase level AI capabilities as well.

00:06:35: So just in the last couple of weeks before Black Friday, we saw a number of different platforms release price drop automations and price tracking.

00:06:44: With Google, you can call stores and with Rufus on Amazon as well, a lot more persistent memory about who I am as a customer and what.

00:06:55: kind of brands I prefer and what my lifestyle looks like.

00:06:58: So I think that is a very meaningful development this year and how it relates to retail media is very interesting because if we're spending more time in the research stage as consumers, with an AI companion versus going to a retailer that has pretty profound implications for onsite sponsor product ads and display ads.

00:07:23: It has implications for offsite retail media.

00:07:27: And so I think this has been a big year to think about.

00:07:32: what does the future of retail media look like if consumers spend more time with AI companions rather than on a retailer.com in the early stages of their buying journey.

00:07:44: Yeah,

00:07:44: absolutely.

00:07:45: And obviously, you're preaching to the choir here.

00:07:48: Also with mentioning this big news for this year and these trends, is there a recommendation you could make for anyone who decides to offer their brands on a marketplace?

00:08:02: How much focus would you advise them to give to advertising at the actual point of virtual sales?

00:08:10: It's a really good question.

00:08:12: My answer differs.

00:08:14: depending on whether we're talking about a brand or a retailer.

00:08:19: So taking the perspective of a brand for a moment, there's really, as it pertains to a gentic commerce that is actually buying within an LLM or letting an agent buy for you, a lot of the optimization that can be done to get your product showing up.

00:08:39: when someone's making a specific.

00:08:41: search query, a lot of that is in the hands of a retailer.

00:08:44: And if the retailer is doing all the right things from like an SEO perspective to get their products to show up in a product card on chat GPT or Google AI mode, for example, or Microsoft co-pilot, a lot of what is possible to optimize is in the hands of a retailer.

00:09:05: So that's my first recommendation to brands is to understand Among their retail partners, retailers and marketplaces, how they are thinking about a genetic commerce and AI enabled commerce because there's only so much that you can do as a brand before it is in the hands of a retailer.

00:09:26: These LLMs are partnering with retailers.

00:09:29: They do not want to become retailers themselves.

00:09:32: So they have to partner with them and retailers have very different perspectives right now about whether AI is a friend or a foe.

00:09:43: Yes, absolutely right.

00:09:45: Speaking about the big developments this year, what did surprise you the most?

00:09:50: What surprised me the most actually is a number of retailers announced or really dug into algorithmic, what we call a little bit cheekily, black box algorithms forbidding.

00:10:07: on their retail media network.

00:10:10: Amazon at Unboxed announced an algorithmic bidding platform.

00:10:16: This is something that Google and Meta have had for a long time.

00:10:20: But also other retailers that I've been speaking with are building towards this as well.

00:10:26: Instacart has an algorithmic capability.

00:10:29: Albertson is the grocer in the US.

00:10:32: They are working on this.

00:10:35: I'm surprised because to me, as a former agency person, these black box algorithms are met with a lot of skepticism.

00:10:47: And in some cases, derision, especially when we look at Google Pmax, that was not a very well liked system from sophisticated media buyers because it was so locked down.

00:11:03: There was, it wasn't optional.

00:11:05: And this has been, you know, there's been some developments, you know, over the last couple of years to make it a little bit more open.

00:11:12: But for a sophisticated media buyer that has a very clear idea of what they want to do and what they want to optimize for, they do not like the idea of giving a platform a budget.

00:11:25: And an objective and letting the algorithm do its thing because it's that they want to know.

00:11:31: how is my budget being spent.

00:11:33: I want to put some controls in.

00:11:34: I want to make sure that this skew gets this much and that skew gets that much.

00:11:40: And within very large brands that are publicly traded, you know, think about like big CPG multinationals, they have very.

00:11:51: very, very specific guidance on where they are supposed to be spending their ad budget at different stages and across different brands and products.

00:12:01: So I was surprised at the number of black box algorithms being released because at least within my context of very large sophisticated media buyers, they don't seem to be particularly well liked.

00:12:16: But for these I think what I understand from these retailers is they want to provide easy access to all types of advertisers and quite possibly the types of advertisers that they are positioning these algorithmic models to are the more inexperienced.

00:12:35: advertisers who love the idea of giving the algorithm a budget and optimizing towards it.

00:12:42: They don't have dedicated media buying teams or work with a fancy advertising agency.

00:12:50: So yeah, that was my biggest surprise from the year.

00:12:53: Yeah,

00:12:53: it's just like a matter of control versus efficiency, right?

00:12:57: Yeah.

00:12:58: I think there could still be a good place for an algorithm in a sophisticated media buying strategy, much like back in my Amazon days, we would still run automatic campaigns.

00:13:11: Often, they would surface really interesting keywords that we hadn't thought of, that hadn't come up in our research.

00:13:19: There can be a place for both.

00:13:21: I just really believe that it should be optional and there should be more pathways for independent advertisers to manage campaigns independently of those algorithms.

00:13:35: Yes,

00:13:35: a hundred percent agree.

00:13:37: And when now looking at the funnel development in retail media, what do you find the biggest win here when you look over the past year?

00:13:47: Yeah, I think that this year was the year that the mid funnel came became a lot stronger in retail media.

00:13:55: So for a long time, many platforms have had sponsored product ads at the bottom of the funnel and some type of off-site retail media or on-site sort of banners, things like that.

00:14:09: But I really think that the mid funnel has been built out a lot.

00:14:15: So we're seeing more formats like sponsored video, on-site shoppable formats, upper funnel integrations that are more like true media channels, not just bolt-on off-site partnerships and things like that.

00:14:33: I think that that has been quite interesting to see from a funnel perspective.

00:14:38: I do also have a point of view.

00:14:41: I'd love to hear what you think, Haika, on this, but although there is still a meaningful difference between an awareness campaign and strategies around that and bottom of funnel.

00:14:57: There is just so much movement between different channels for information and comparison and discovery that we can't.

00:15:07: We can't think of a funnel the way that we used to between social media and AI and what retailers are able to do when connected TV and just this very fragmented, you know, fragmented use of time across different audience segments.

00:15:23: There's no single funnel anymore.

00:15:25: And it's just like, okay, you kind of need to replicate a funnel on every platform that people are spending time on.

00:15:33: Completely.

00:15:34: And what I find interesting is though that you On one hand, have to make this experience seamlessly, right?

00:15:40: That always the consumer understands, okay, this is still the brand I'm looking at, the campaign.

00:15:46: But on the other hand, it must always be true to the format.

00:15:50: And so, especially with TikTok, that immediately the consumer see once an ad is actually just converted into TikTok, but wasn't initially filmed or produced for it, right?

00:16:02: So I think this is a very interesting stretch.

00:16:07: When I joined in on this question, you're absolutely right.

00:16:10: So growth of the mid funnel, but we were also surprised to see how much interest there is for the upper funnel and specifically how nicely you can match physical offside activities that where you really give the customers a chance to experience your brand also jointly with others, right?

00:16:32: It's all started with run clubs, but now there are so many different.

00:16:36: occasions, we see this for fashion partners, but also for beauty.

00:16:40: And then to scale online by creating content that gives everyone the feeling they were there in this moment too.

00:16:48: So I have to say, yeah, really the the upper funnel also had had a big impact this year.

00:16:54: And it's great to see that retail media is no longer just about the lower funnel sponsored products, as you said, in the beginning.

00:17:02: So I think this area became a whole more exciting.

00:17:05: even this year.

00:17:06: Right.

00:17:07: And so now looking ahead, what will retail media and twenty twenty six look like?

00:17:13: And what do you think will change?

00:17:16: Well, I have a less positive outlook for the long tail of retail media networks going into twenty twenty six.

00:17:26: And that is because large brands who have a lot of budget.

00:17:32: I have learned from speaking with many of them as well as a very large number of surveys of brands is that they don't want to be dealing with dozens of retail media networks.

00:17:48: They might have the large budgets where they could, in theory, spend across dozens of retail media networks, but they just do not have the internal capacity to be planning, buying and reporting across dozens of retail media networks.

00:18:07: They typically want to work with five, six, seven, and this is in CPG categories where you might be selling to dozens of grosses and convenience stores and.

00:18:22: gas stations and things like that.

00:18:24: But they just don't have the internal bandwidth to be effectively buying across all of those different media platforms.

00:18:32: So it does seem to me that in the US, we have AT or so retail media networks worldwide.

00:18:39: There might be two hundred and fifty or so.

00:18:42: And it just doesn't seem to me to be sustainable for these longer tail retail media networks to be expecting direct.

00:18:51: brand dollars to be flowing to them.

00:18:54: So I imagine a couple of different scenarios here.

00:18:59: One is consolidation within federations or cooperatives or conglomerates, much like in the U.S.

00:19:11: you have values in France, I believe, and also Unlimitale, which is the backbone is the Carrefour grocery chain.

00:19:28: These are conglomerates that have been established in Europe that work very well.

00:19:35: It enables brands to be buying across a number of different retail partners, but with a unified front-end and all that they want on the back end.

00:19:47: Now, that means that retail media networks, they don't have as much differentiation, perhaps, if they're just part of a conglomerate, might be less profitable for them overall, but I just don't see it as... sustainable in its current format where each media network is expecting direct advertising revenue to come to them.

00:20:17: Either conglomerates or a much stronger demand side consolidation as well with these media networks integrating with more DSPs.

00:20:32: in its current format, it's too much.

00:20:37: I think it's sort of at a house of cards moment as it stands.

00:20:41: Okay, yes, well described.

00:20:46: What do you think?

00:20:47: Is it different in Europe?

00:20:49: Do you think that those consortiums are more established?

00:20:54: Yeah, so we see that, of course, when we look around in the agency world, also there's a big offer, right?

00:21:01: Of then agencies who offer to do retail media for all of the platforms and to become, as you described, such a conglomerate, which in the stand from an efficiency point of view, but then, yeah, again, it's always the question, what is the right choice for you as a brand partner, for instance.

00:21:20: But I think ultimately, it's very important to focus focus also and looking at your points of sale, right?

00:21:27: And then see where is really the right investment and right advertisement reaching your customers and your audience.

00:21:38: This is the segue to our last and I want to say maybe most important question.

00:21:43: So Kiri, I want to ask you what are your retail media tips and tricks to our fashion and beauty partners?

00:21:52: What can they learn from you?

00:21:54: Yes.

00:21:55: Well, going back to the big change from this year, moving towards AI-enabled shopping, I think that for fashion and beauty brands especially, I think when people think about AI-enabled shopping, they might just think about replenishable household categories.

00:22:15: Toilet paper.

00:22:17: bread and milk and things like that.

00:22:20: But there is quite a bit of interest from consumers in having AI help them with more of these quote unquote creative categories.

00:22:30: And I think that runs the gamut from people who.

00:22:33: don't really love to shop for clothes and shoes as crazy as it is, but there's a lot of people out there that don't find that to be a joyful activity.

00:22:42: They would like some help with that and they want to know, you know, I have these criteria, I would like to find a new pair of jeans.

00:22:51: with this criteria.

00:22:53: And then they'll go on by five pairs of the same genes, right?

00:22:57: We know those people.

00:22:58: And then those people, like myself, I quite like shopping for those categories, but I'm always interested in maybe finding a good deal or finding something new and different that I wouldn't have gone to search for.

00:23:14: So I wouldn't dismiss AI enabled AI enablement in those shopping journeys in these categories that we generally think of as fun and discovery.

00:23:28: So if you also believe that is true, then I would be thinking about.

00:23:35: Optimizing for these AI engines, whether that is on site, AI assistants like on Amazon, there is Rufus.

00:23:46: I'm sure that you have one with Zalando.

00:23:49: We have one.

00:23:49: And guess what?

00:23:50: It's called the fashion assistant.

00:23:52: The fashion assistant, I love it.

00:23:52: The fashion assistant,

00:23:54: exactly.

00:23:56: We started with the question, I'm invited to a wedding in Sicily this summer.

00:24:00: It's probably this and this many degrees, what should I wear?

00:24:04: And yeah, this is exactly what you describe, right?

00:24:07: The type of questions where then even consumers who might feel great to shop for their daily occasions, when it comes to a special occasion, then it's really where you want to have professional help.

00:24:22: assistant will guide you through and it's interesting because of course I've tried myself and sometimes you wonder and you might disagree with the choices offered but for sure there are also then options that you would have not considered yourself or maybe brands that you yeah would it out from the beginning where you then think oh but this is actually lovely assortment and I think you are a spot on with this.

00:24:49: As a brand in this category, I'd be thinking about my channels for both awareness and there's now fashion AI apps which do personal styling, so optimizing for them.

00:25:03: Obviously, they're going to need to link out to a retailer or a marketplace as well as those retailer shopping assistants.

00:25:13: What product attributes are required?

00:25:15: What?

00:25:16: just really rethinking your SEO strategy with AI in mind from the very beginning and working around what that looks like?

00:25:26: Because I really think that on the media side of things that there might be opportunities to advertise in the future.

00:25:35: There's some emerging opportunities there.

00:25:37: Primarily what we have right now is an organic opportunity and you want, there's a very rare chance to be early with these kinds of things.

00:25:45: And I think that twenty twenty six is a moment where he can be an early mover.

00:25:52: if you're willing to sort of place, place your bets at the start of the year with that.

00:25:57: Wow.

00:25:57: Nothing can come off the disk just wearing the perfect closing words.

00:26:01: Thank you so much, Kiri.

00:26:03: It was wonderful to have you.

00:26:05: Thank you for joining.

00:26:06: our podcast.

00:26:07: Thank you, Heike.

00:26:08: It

00:26:08: was a big pleasure to discuss this with you.

00:26:11: So dear listeners, also thank you for tuning into another season of Inside Fashion Marketing and get ready for the next season, kicking off.

00:26:20: early twenty twenty six.

00:26:22: If you're looking for more, we've dropped some useful links in the show notes of this episode and make sure to check them out.

00:26:28: And if you like this episode, then please hit subscribe.

00:26:32: We have more wisdom from top marketeers like Kiri today across our partner base in the next episode.

00:26:39: Happy holidays and ciao for now.