Navigating Retail Media’s Growing Pains: What Hightouch’s Moves Signal About the Future
The expansion of retail media is undeniable. With forecasts projecting it to become a $100 billion-plus category in the next few years, brands and retailers alike are moving aggressively to stake their claims. But as the space grows, so do the operational challenges—and the cracks are beginning to show.
A recent conversation with Ian Maier, Ad Tech and AI Lead at Hightouch, sheds light on some of the underlying dynamics driving change in this sector, and hints at where retail media infrastructure may be headed next.
From Monolithic CDPs to Composable Architectures
Traditional customer data platforms (CDPs) were designed to consolidate disparate customer data into a unified system of record. In theory, this centralization should empower marketing and media teams to act more intelligently. In practice, legacy CDPs often require extensive data migration projects—typically measured in months or even years—with significant technical debt and long payback periods.
Hightouch is positioning itself as a counter to this model, advocating a “composable CDP” that connects directly to a company’s existing data warehouses (like Snowflake, Databricks, or Google BigQuery). Instead of forcing a rip-and-replace migration, composable architecture promises faster deployments and greater flexibility.
This architectural shift is not unique to Hightouch. The broader enterprise software market is moving in a similar direction, as companies grow weary of platform lock-in and prioritize time-to-value. But Hightouch’s claim—that it can stand up CDP capabilities in weeks rather than quarters—is notable, particularly for global enterprises with complex infrastructures.
The larger question for the industry is whether composable CDPs can consistently deliver the same level of governance, performance, and usability that monolithic CDPs historically promised. Early signs, particularly with Hightouch clients like Accor Hotels, are promising, but the long-term implications remain to be fully tested at scale.
AI Decisioning: Promise vs. Practicality
Beyond composable data infrastructure, Hightouch’s most aggressive move has been its entry into AI-driven decisioning.
The company’s new platform aims to move beyond static audience segmentation and campaign scheduling, offering marketers the ability to deploy real-time, personalized decisions—optimizing not just who gets messaged, but when, how, and with what content across multiple channels.
Case studies like WHOOP’s reported 10% incremental lift using AI-driven messaging suggest there is tangible upside. But, as always with AI in marketing, practical challenges remain:
- How customizable are these decisioning models?
- How easy is it for marketers to adjust, oversee, and trust AI outputs?
- What happens when underlying business goals shift faster than AI training cycles can adapt?
At this stage, it’s clear that AI decisioning has potential to offload significant operational burden from marketing teams. Whether it can be implemented safely and at scale across diverse industries—and whether marketing leaders will trust it enough to make it central to their strategy—is still an open question.
The Pressure of Fragmentation in Retail Media
One of the most pressing issues in retail media is fragmentation. There are now over 200 active retail media networks, each with its own buying protocols, measurement systems, and data access models.
As Maier pointed out, advertisers and agencies simply cannot manage hundreds of bespoke platforms manually. Consolidation on the demand side (e.g., through DSPs and marketplaces) is inevitable, but for retail networks themselves, the path forward will depend on differentiation: offering uniquely valuable audiences, lower operational friction, and provable ROI.
Hightouch’s partnership with Databricks to enable self-service audience management is a timely move in this context. It suggests that forward-looking retail media players are starting to recognize the need to build easier, more interoperable systems if they want to remain competitive.
Still, interoperability is only one piece of the puzzle. Without consistent standards for audience definition, campaign execution, and attribution, retail media’s fragmentation challenge will persist. It is unlikely that technology alone will solve what is ultimately a market-level coordination problem.
A Growing Demand for Measurement and Proof
Another recurring theme at NRF and across the retail media landscape is the growing demand for incrementality measurement—that is, real proof that campaigns are driving new business, not just cannibalizing organic sales.
According to Maier, Hightouch is developing tools to automate holdout group creation and integrate incrementality measurement into the retailer’s own data systems. If successful, this would represent a major step forward. Unlike third-party attribution models that rely on black-box methodologies, first-party incrementality experiments controlled by the retailer could offer more transparency and credibility.
However, executing true incrementality testing at scale is not trivial. Challenges include ensuring statistically significant sample sizes, managing channel cross-contamination, and aligning metrics with brand-side expectations. Hightouch’s offering sounds promising on paper, but success will depend heavily on how easy it is for retail media operators to actually implement and explain the methodology to their brand partners.
Funding, Momentum, and the Road Ahead
Hightouch’s recent $80 million funding round, which values the company at $1.2 billion, is a clear validation of its positioning. Notably, the round was led by top-tier investors, suggesting a broader belief that composable architectures and AI-driven marketing will be critical components of next-generation media infrastructure.
The company plans to invest heavily in R&D, particularly around expanding AI capabilities and building richer insight layers for its customers. This is consistent with what the broader retail media ecosystem will demand over the next 12-18 months: faster activation, better optimization, and clearer, more trustworthy measurement.
That said, rapid fundraising can sometimes outpace operational maturity. As retail media buyers become more sophisticated and scrutiny intensifies, technology providers like Hightouch will be judged not just on vision—but on execution, customer outcomes, and the ability to integrate into increasingly complex marketing stacks.
Final Analysis
Hightouch’s moves align with some of the most important trends reshaping the retail media industry:
- A shift from static platforms to composable, flexible architectures
- A growing reliance on AI to automate and optimize decision-making
- An urgent need for transparency, trust, and provable value in media buys
While the early signals are strong, the real test will come as more retailers attempt to operationalize these capabilities at scale. If Hightouch—and others pursuing similar models—can deliver measurable, reliable improvements in efficiency, activation speed, and revenue impact, they will be well positioned to define the next chapter of retail media’s evolution.
For now, the industry should watch carefully—not just for the headlines, but for the operational realities behind them.
