In our first blog, we looked at banks wrestling with what data they can actually monetize. Retail, by contrast, addressed this question years ago, and the economics are striking. Average retail operations run on tight 2 to 4% profit margins, and data businesses built on that same infrastructure consistently hit 75 to 90% margins.
These are fundamentally different business models operating within the same organization, yet the opportunity is often overlooked because leaders focus on revenue share rather than profit contribution.
We recently worked with a major retailer where the data business generated only 1% of total revenue. While that looks small on a spreadsheet, that single 1% line was delivering 13% of the company's total operating profit. This wasn't a projection; it was a realization of wildly different economics living under the same roof.
A real-world look at data monetization at scale
Our client in Latin America, a multi-billion-dollar retailer, had access to extensive transaction and loyalty data but was not fully leveraging it:
- Insights: They sold packaged analytics to CPG manufacturers, showing exactly which customer segments were buying products and what drove those decisions
- Owned digital inventory: They sold ad space on their own website, app, and in-store screens. This revenue stream activated quickly because they controlled the real estate
- Open-web advertising: They utilized first-party data to target their customers across the wider internet
The project resulted in a four-year forecast of +600% revenue growth. All three streams operating at 75 to 90% margins.
What are retail media networks and why are they high-profit?
Building a data monetization business is not always plug-and-play, and almost always requires real investment to build dedicated systems, data governance frameworks, privacy compliance infrastructure, and specialized talent.
But once that foundation is in place, the margins come from three assets retailers possess that no one else can replicate:
- Customer knowledge: Deep understanding of who the customers are and what drives their purchasing decisions (data that accumulates with every transaction)
- Purchase-ready attention: Access to customers at the exact moment they're primed to buy, when advertising has maximum impact
- Closed-loop measurement: The ability to track exactly what happens after an ad runs - did the customer buy the product? This attribution capability makes data so much more valuable to advertisers.
Anyone can buy and sell products. But owning the customer relationship, the data, and the measurement infrastructure enables Meta, Alphabet, and now traditional retailers to extract dramatically more profit per unit of attention than pure-play retail ever could.
Unlike moving physical inventory where every additional unit involves costs for goods, warehousing, and trucking, generating a consumer report for a brand does not. The data exhaust from retail operations becomes feedstock for high-margin products.
Retail media revenue trends and industry patterns
This pattern extends across the industry.
- In 2024, a leading global e-commerce and cloud services platform generated about $56B in advertising revenue (roughly 9% of total sales), while in Q3 2025 alone its ad business has already produced about $18B, growing 22 percent year over year each quarter.
- Walmart’s global advertising business, including Walmart Connect, delivered $3.4B in 2024 (about 33% YoY growth)1 and has grown further to roughly $4.4B2 in FY25
- Target’s Roundel brought in $649M3 of ad revenue in 2024 (about 24% growth versus 2023), with management continuing to cite nearly $2B5 in total “value” when indirect benefits are included, illustrating how these units remain relatively small in revenue terms but disproportionately important to profit.
Consideration: A $10 billion retailer with 4% margins equates to $400 million in operating profit. Launch a data business that hits 1% of revenue ($100 million) at 80% margins. That's $80 million in profit contribution. Only one percent of revenue, but twenty percent of profit.
The future of retail media networks
While AI commerce is challenging 10-year strategic plans across retail, retail media networks are not going away. If anything, the importance of successfully leveraging proprietary data increases. As traditional search and social media advertising lose ground to AI agents for product discovery and purchase, retailers and digital solution providers are figuring out how to connect and monetize AI-enabled data assets.
There is still a high level of uncertainty around how AI commerce will evolve. For instance, how much more attention share will GenAI platforms capture in product discovery and purchase? Should retailers share their information with AI providers? How openly? Regardless of how it all plays out, retailers’ first-party data and closed-loop measurement become even more valuable when the traditional advertising paths erode.
Lessons for financial services and monetizing unique data sets
The financial institutions looking at retail success should ask “what are the equivalent unique data assets that we can sell?”
The parallel isn’t exact as banks don't have purchase-ready attention in the same way retailers do. But they have something equally powerful: transaction data that reveals spending patterns across an entire economy, creditworthiness signals that retailers can't access, and predictive insights about consumer financial behavior. The infrastructure already exists. The question is how to package and price it.
Banks launching data-as-a-service offerings are seeing similar margin patterns because the underlying economics are the same: high fixed costs to build the infrastructure, then near-zero marginal costs to serve additional customers.
Next in this series: Key lessons from successful retailers and how financial services can apply them - covering specific use cases, regulatory considerations, and go-to-market strategies for banks and insurers entering the data monetization space.
Ready to explore data monetization for your business? Contact us
1 Walmart Reports, Fourth Quarter Results, 2024
2 Walmart Reports, Fourth Quarter Results, 2025
3 Target’s digital ad unit delivers $2B in value for embattled retailer, Marketing Dive, 2025
