For those retailers who have built their P&L success on the premise that CPG trade dollars will always be available to plus up their profit margins should take note that the same technology that is creating an exciting new category of trade support through Retail Media Networks (RMN) does not necessarily represent “new money” but rather a new, more measured means to measure return on investment on a finite bucket of money the brands are willing to invest to any given retailer.

Major retailers will likely insist on maintaining trade funds tied to aggregate brand sales, as their budgets are relying on these dollars. They will also insist on (RMN) funds to be incremental. Meanwhile, CPG brands are increasingly leveraging data to understand the what, where, and why of their product sales, enabling more efficient product launches and promotions through all investment buckets, whether they be trade, national accounts, or (RMN).

This divergence in priorities—between retailers and brands—will shape discussions around retail media and the critical role of return on advertising spend (ROAS). Retailers, no matter what label the CPG places on their money, must invest in technologies that deliver robust sales attribution metrics for brands channeling funds into retail media networks and digital platforms.

Regional and independent retailers, lacking the influence of larger chains, will be the first to encounter new requirements to maintain or increase their share of brand funds. However, they are often the least prepared to adopt this new paradigm without substantial support from suppliers and marketing services companies. That is beginning to happen, but certainly not universally.

There are clear incentives for the retailer to embrace retail media, beyond allure of short term revenue from their media. Improved merchandising placement, communication, and enhanced margin management are all byproducts of the data (RMN) platforms can deliver. No matter from which CPG bucket the funds originate, sales attribution metrics will be increasingly required. CPG brands must also contribute by providing financial and intellectual resources to help retailers adopt these platforms. As in all new initiatives that reach their potential in retailing, both retailer and brand partner must fully embrace, invest in, and commit to this transformation

Over time, retailers may even reduce dependence on brand funds, shifting focus from supplementing margins to growing top-line revenue, a departure from the traditional role of trade funds.

Finally, I like to think of (RMN) as an accelerant of an already existing trend in the partnership between retailer and brand. CPGs are already pushing for more data and more definitive metrics. RMN investment will only take that trend to a new level. Exciting times ahead for those who are embracing the change!