What is retail media?
At Carat our mantra is to make every impression matter. When it comes to the rapidly expanding arena of retail media, we adopt a class-leading approach to incrementality – so that we can maximise the retail impressions that matter the most.
Retail media is known for offering brands unparalleled access to shoppers at the point of purchase, but its evolution now extends into more passive mindsets by keeping brands in conversation with consumers around the moment of consumption, not just purchase.
This shift has driven brand budgets into retail media solutions, intensifying competition among Retail Media Networks to capture demand and secure incremental revenue – highlighting different capabilities across the networks. But who wins a spot on the media plan?
The answer is typically determined by ensuring data and performance can be evaluated and understood to present performance to the client, vs. what it would be if they weren’t investing in these solutions.
This is known as incrementality.
The question retailers and networks aim to fully answer is: can we demonstrate that every pound spent delivers measurable value, e.g., conversions and other key KPIs?
What is a measurable value, and how is it typically defined and understood?
To delve into this further, it’s a key topic of consideration in retail media, as the solutions are there to answer the fundamental question: Would this sale have happened without the ad spend? asked by commercial managers, brand managers, and others.
Without this focused lens, retail media risks over-attribution – a problematic state in which there are claims for conversions that were already likely to occur. This can lead to inflated performance metrics and scepticism, ultimately stalling growth.
This is where our commerce strategy team helps our clients to navigate these opportunities, guiding them through measurement methodologies and ensuring that retail media investments are backed by robust evidence. This strengthens relationships and positions agencies as strategic growth partners, rather than just media buyers.
How do we measure incrementality?
We have defined the market and the problems of lift and over-attribution, but how is incrementality typically embedded into media workstreams?
In our world, incrementality testing typically involves creating a control group (unexposed to ads) and a test group (exposed to ads) to measure the difference in outcomes:
- A/B holdout tests: randomly exclude a portion of the audience from campaigns.
- Geo-based experiments: compare performance across regions with and without exposure. E.g., focus on over- or under-indexed areas/regions of stores to measure the impact of media on sales vs. non-media areas to measure sales uplift.
These methods are employed differently across retailers, especially in the grocery market, to reveal the actual impact of retail media spend, beyond what attribution models alone can show.
Source: SKAI AND PATH TO PURCHASE INSTITUTE 2025 STATE OF RETAIL MEDIA REPORT. https://www.forbes.com/sites/kirimasters/2025/02/05/as-retail-media-spending-soars-brands-face-a-measurement-crisis/
While incrementality measures whether spend drives additional sales, multi-touch attribution (MTA) explains how different channels contribute to sales throughout the customer journey.
Within commerce strategy, our team sits alongside paid search, social, and programmatic display, making it essential to understand its relative influence across the whole activation landscape, to filter the effects of the role retail media has played in growth and performance for that client’s allotted spend.
To put this in a reporting perspective for clients, MTA assigns a small credit to each touchpoint, moving beyond last-click attribution. For example:
- A shopper sees a sponsored product ad on a retailer’s site.
- Later, they engage with a social ad and then convert via paid search.
Without MTA, retail media might be undervalued or overvalued. Combined with incrementality, it provides a holistic view – something we continue to drive and communicate with clients and our broader teams.
Final thoughts on the future
Looking ahead, the next frontier lies in AI-driven attribution models and real-time incrementality measurement, enabling dynamic budget allocation. Clean rooms will play a pivotal role in privacy-compliant data sharing, though cost barriers remain; retail media networks will continue evolving into full-funnel ecosystems.
