Unlocking High-Margin Opportunities: Leveraging Existing Data for Business Growth
You're Sitting On A High-Margin Business—Here's How You Can Realize It
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Todd James, CEO of Aurora Insights, emphasizes that companies can significantly increase profits by treating their existing data as a product rather than merely an operational tool. By leveraging data for retail media and analytics, businesses can realize high margins, similar to successful models seen at Walmart and Kroger.
- 01Core retail margins typically range from 2% to 5%, while retail media advertising margins can soar between 50% to 90%.
- 02Kroger's alternative profit ventures, including retail media, generated $1.5 billion in operating profit in fiscal year 2025.
- 03The key to monetizing data lies in structuring it around decision-making needs of brands, as demonstrated by Kroger's 84.51° subsidiary.
- 04This data monetization strategy is applicable across various industries, including media, logistics, healthcare, and manufacturing.
- 05As AI tools become ubiquitous, the value of a company will increasingly depend on the quality and usability of the data it possesses.
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Todd James, Founder and CEO of Aurora Insights, argues that many companies overlook a significant economic asset: their existing data. While firms often use data for operational tasks like reporting and tracking KPIs, they miss the opportunity to treat it as a product. For instance, retail margins are typically low, ranging from 2% to 5%, but retail media advertising can yield margins of 50% to 90%. Successful companies like Walmart and Kroger have capitalized on their data, with Kroger reporting $1.5 billion in operating profit from ventures outside traditional grocery operations in fiscal year 2025. The transformation involves structuring data to meet the specific needs of brands, thereby creating new revenue streams. This principle extends beyond retail to sectors like media, logistics, and healthcare, where operational data can enhance decision-making. As AI capabilities grow, the differentiation will come from how companies utilize their data, making it crucial to act swiftly in unlocking these profit streams.
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Companies can enhance profitability by effectively monetizing existing data, impacting their operational strategies and revenue generation.
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