The End of Retail Media’s Bottom-Funnel Illusion

Retail media cannot be called a scrappy newcomer in the ad ecosystem any longer. It was once positioned as a last-mile sales channel, but the industry has seen it become a strategic nerve centre for how brands engage consumers across the journey. And AI is turning the category from a performance tool into a decision-making engine.

“AI is now playing a central and transformative role in retail media, by turning vast amounts of insight into real-time actionable marketing decisions,” says Amir Rasekh, Managing Director of Nectar360, Sainsbury’s data insights platform. 

“It is enabling marketers to analyse behaviours, optimise targeting and adjust campaigns dynamically across channels as well as access real time reporting.”

The launch of Nectar360’s Pollen platform reflects this shift, using AI to streamline segmentation, creative optimisation, and performance measurement. The result is less guesswork and more precision.

The Unification Problem

For years, retail media promised omnichannel impact but was hamstrung by fragmentation. Data sat in silos, online, offline, and offsite, and brands often struggled to connect them into a cohesive view.

Rasekh is blunt about the solution: “To truly unify online, offline and offsite experiences in retail media, brands need a single view that brings together omnichannel campaigns.” Without it, campaigns risk being efficient in pockets but blind to the bigger journey.

The industry is at a tipping point where unification is the prerequisite for making retail media a long-term growth driver rather than a tactical lever.

Misunderstood Muscle

Despite the hype, retail media still suffers from a branding problem. Many advertisers see it only as a bottom-funnel play, good for coupons, sponsored search, and nudges at the point of sale.

That’s shortsighted, Rasekh argues: “While it plays a strong role in influencing purchase decisions close to point of sale, this view really underestimates retail media’s potential.”

With first-party insights and closed-loop measurement, retail media can do much more, build awareness, drive consideration, and nurture loyalty across physical and digital touchpoints. 



This reframe could prove pivotal as advertisers look for brand-safe environments with better accountability than open web buys or social platforms.

The Trust Equation

As retailers become media owners, the question is how to balance monetisation with customer trust.

“Advertising should feel additive, engaging and seamlessly integrated,” says Rasekh. “Striking the right balance between media activation and customer experience is what builds deeper loyalty and long-term growth.”

Here lies retail media’s paradox: the very data that makes it powerful can also undermine it if handled without care. Consumers expect personalisation, but they’re less forgiving of experiences that feel intrusive or transactional. Brands and retailers who get this balance wrong risk undermining the credibility of the channel itself.

From Transactions to Partnerships

Perhaps the most exciting shift is in the brand–retailer relationship. Historically transactional (brands bought inventory, retailers provided access) AI is creating room for strategic collaboration.

“As AI becomes more deeply embedded in planning and measurement tools, collaboration is naturally going to transform,” says Rasekh. Shared insights, unified reporting, and predictive modelling allow both sides to align on growth goals rather than fight over margins. The winners will be those who co-create experiences rather than trade placements. 

Retail Media’s Reinvention

The narrative around retail media is evolving. Once dismissed as the last stop before checkout, it is now repositioning itself as one of the most strategic levers in modern marketing, powered by AI, underpinned by trust, and elevated by deeper collaboration.

“Retail media is no longer just about sales,” Rasekh notes. “It’s about creating meaningful connected experiences through the entire customer journey.”

That sentiment may define the sector’s next act: from optimising impressions to orchestrating intelligence and turning retail media into the connective tissue of customer experience.

Also published in: Martechvibe