Big tech might just be coming for the golden goose of retail
Retail Media Networks (RMNs) have been one of the strongest growth engines in retail in recent years. Look at the National Retail Federation’s (NRF) agendas for the past few years and you will see vendors, experts, and retailers themselves talking about this new-found gold mine: a 75-90% profit margin business sitting on top of humble single-digit merchandise sales. For context:
- Worldwide, there are +200 retail media network businesses globally1
- Roundel, Target’s RMN arm, brought in nearly $ 650m in the twelve months ending in February 20252
- Almost a third of Walmart’s operating profit comes from advertising revenues3
What makes RMNs so attractive (high demand, high margin) comes down to four fundamentals:
- The value of ads (how much you can charge for them) is proportional to how much sales are generated per dollar invested by clients (in the case of RMNs, these are usually FMCG firms).
- Retailers’ digital “real-estate” is visited by customers at the end-stages of the purchase journey, and the closer they are to an actual purchase, the likelier an ad is to convert into a sale.
- Retailers are the only ones able to directly link ads to purchases, as they own the later stages of customer journeys, up to the final purchasing step (“closed-loop measurement”).
- Retailers know their customers like no one else. 1st party data collected via CRMs, loyalty programs, and “ecosystem components” such as credit cards is deeper than what 3rd parties can collect or infer about individuals. This enables retailers to build more relevant audiences for campaigns.
Together, these strengths make it so that retailers can compete for ad budgets with the likes of large social-media platforms and major search and advertising providers. While retailers and big tech have been collaborating to empower RMNs (e.g., enabling secure, privacy-compliant 1st, 2nd, and 3rd party data to be used for activation across certain social channels), the power to link an activation to a purchase has been exclusive to retailers up until now.
Enter agentic commerce
On January 11th, Sundar Pichai, the CEO of a leading global technology company, and John Furner, the incoming CEO of Walmart, took the stage to announce the launch of the Universal Commerce Protocol (UCP). Put simply, UCP is a “manual” for how agents can access legacy retail and payments systems.
If it is adopted at scale, the economic benefits of UCP can be tectonic. Providers will multiply, costs will go down, quality will go up, customer experience will improve, and entire new business models will be created.
At the same time, going back to retailers, and specifically their digital businesses, it is clear that their current competitive advantages, when it comes to digital journeys, will no longer hold:
- The value of ads will still be proportional to how much sales are generated per dollar invested by clients.
- Retailers’ digital surfaces will receive less traffic as more customers delegate discovery to agents or use them for purchasing.
- Agent providers will have access to what customers purchase. Even if the retailer is marked as the “Merchant of Record”, the agent will ultimately handle the customer interaction. This means that the blind spot on big tech’s measurement stack, which has been a chronic competitive weakness for years and allowed retailers to monetize ads, will soon evaporate
- Agent providers will know customers like no one else. Think about it: only the agent will see what brands, retailers, price points, etc., the customer explored and ultimately bought. Blend these insights with others derived from all kinds of conversations and people might have with their personal agents, and the information asymmetry will be unprecedented. While retailers will retain 1st party data, its value will shrink as consumers consolidate shopping within agentic assistants. A reasonable analogue are food delivery apps: while some restaurant chains can successfully convince loyal customers to install and use their branded apps, most of the traffic and consumption happens on aggregators like UberEats, DoorDash, Swiggy, and the likes.
According to our studies in the US and Latin America, more than 50% of customers in the Americas have already used GenAI for their holiday shopping at the end of 2025 (+65% for Gen. Z), even as AI platforms were still mostly limited to the exploratory stages of the customer journey. And while agentic commerce will initially make more sense for higher-ticket, more complex purchases, one could envision a future where ChatGPT and others of the like, work on agents that optimize your weekly grocery shopping.
Walmart, Target, and other retailers that contributed to the development of UCP are clearly embracing what they see as the inevitable future. How they navigate the evolving digital power landscape remains to be seen, but here is a starting list of questions that all retailers should be asking right now:
- What will our unique selling points and factors of differentiation be, within an agentic commerce economy, towards consumers and fast-moving consumer goods (FMCG) firms?
- What capabilities should we enable for agentic commerce, considering the trade-offs for our brand, our customers, and our digital businesses?
- What roles will our digital channels play in the future, under different assumptions of agentic commerce growth?
- What are the most likely financial results of our RMN business in the coming 5 years, and how do the main scenarios affect our investment and growth decisions?
- As we embark on agentic commerce, what commercial conditions can and should we enforce for successful tech partnerships?
What are the implications of Agentic Commerce for your business? Reach out to our experts to explore them and lead the Agentic future.
- Retail Media Networks Statistics 2025: 92+ Stats & Insights [Expert Analysis], Marketing LTB
- Target Corporation Reports Fourth Quarter and Full-Year 2024 Earnings, ModernRetail
- Almost a third of Walmart's profit now comes from selling ads, Target
