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**When Promotions Pay the Bills and Retail Media Loses the Plot**

3h ago · 6 sources · trend

Grocery still runs on discounts. In high-low pricing models, sale markdowns drive 20%, 30%, even 40% of store business. That adds up to hundreds of billions of dollars in retail sales and tens of billions in incremental gross profit, largely funded by suppliers.

At the same time, omnichannel shopping is splintering loyalty. Shoppers split baskets across retailers and channels, making repeat trips harder to lock in. When an item is out of stock in one location, shoppers just buy it somewhere else. Retailers are responding by turning stores into mini warehouses and fulfillment centers, Walmart among them. They are also leaning into loyalty programs, which generate larger basket sizes, according to Lunds & Byerlys. Some are experimenting with personalized pricing, though some states are now pursuing legislative action against those practices.

Then there is retail media. More than 200 RMNs popped up in the boom, a true Wild West. Now more than a quarter of retail marketers are pulling ad dollars out. 34.8% are moving budgets to lower-cost, higher-efficiency channels. Measurement is tightening too. 30.4% favor customer lifetime value and 26.1% favor total revenue over vanity metrics.

Why it matters. The old trade playbook still funds the system, but the growth bets are shifting. Brands cannot just buy endcaps and retail media impressions anymore. They need in-stock excellence, sharper data, and proof that spend drives lifetime value, not just clicks. The retailers who connect promotions, loyalty data, and fulfillment speed will win the next round.

Key facts

  • In high-low grocery pricing models, sale markdowns account for 20%, 30%, even 40% of store business, adding up to hundreds of billions of dollars in retail sales annually and tens of billions in incremental gross profit dollars, primarily funded by suppliers.
  • Omnichannel grocery shopping is fragmenting retailer loyalty as shoppers split spending across channels and retailers, making repeat trips harder to win.
  • Retailers without a data-backed stocking strategy risk losing share because when a product is out of stock in one location, consumers simply buy it elsewhere.
  • Loyalty program members typically generate larger basket sizes, according to retailer Lunds & Byerlys.
  • Some states are pursuing legislative action against personalized grocery pricing practices that use shopper data to set prices based on shopping habits.
  • Retailers are turning stores into mini warehouses and fulfillment centers to deliver products faster and at lower cost, with Walmart cited as an example.
  • More than a quarter of retail marketers are pulling ad spend from retail media networks to fund other channels, according to Keen Decision Systems.
  • More than 200 retail media networks emerged during the retail media boom, creating what Keen’s CEO described as a 'Wild West' environment.
  • 34.8% of retail marketers have moved budgets toward lower-cost, higher-efficiency channels amid economic uncertainty, according to Keen.
  • Retail advertisers are shifting away from vanity metrics, with 30.4% favoring customer lifetime value and 26.1% favoring total revenue as indicators of media effectiveness.
  • 20%
  • 30%
  • 40%
  • hundreds of billions of dollars
  • tens of billions
  • more than 200 RMNs
  • 34.8%
  • 26.1%

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