The retail media landscape is undergoing a seismic transformation, with digital commerce reshaping how brands, agencies, and retailers interact. As advertising spend continues to shift, retail media is emerging as one of the fastest-growing channels, redefining how brands connect with consumers and optimize their media investments. According to GroupM’s latest “This Year, Next Year” report, UK retail media and commerce are growing at an impressive 17.7% year-on-year, outpacing most other advertising channels. Some retailers are even witnessing over 50% growth in ad spend, a trend unparalleled in other segments of the industry.
The Evolution of Retail Media
Retail media is not a new concept. For decades, retailers have monetized in-store placements, offering suppliers valuable shelf space and promotional opportunities. However, these early advertising efforts were largely static, analogue, and disconnected from broader digital marketing strategies. Today, the rapid digitization of commerce, coupled with sophisticated data capabilities, has transformed retail media into a powerful, scalable, and data-driven advertising channel.
The key drivers behind this shift include:
- E-commerce Expansion: As consumers increasingly shop online, retailers are capitalizing on their digital assets to serve highly targeted ads.
- Data Utilization: Retailers have access to rich first-party data, enabling precise audience segmentation and measurement.
- High Margins for Retailers: Unlike traditional retail margins, which can be thin, media revenue provides retailers with a lucrative, high-margin revenue stream.
- Advertiser Demand for Closed-Loop Measurement: Brands are prioritizing platforms that offer full-funnel attribution, where they can directly link advertising efforts to sales outcomes.
Retailers as Media Owners: The Walmart Playbook
Retailers are increasingly behaving like media owners, leveraging their assets to create full-funnel advertising solutions. A prime example of this transformation is Walmart, which has taken inspiration from Amazon’s advertising model. With its Walmart Connect platform, the retail giant has turned its digital and in-store environments into an advertising powerhouse. Walmart’s ad business grew by 27% to $4.4 billion, making it one of the top 20 global media players.
Walmart’s success is rooted in several strategic initiatives:
- On-Site Technology & Data Monetization: Leveraging AI-driven ad placements and real-time shopper insights.
- Retail Media Networks: Offering advertisers omnichannel solutions across digital, in-store, and social platforms.
- Agency-Friendly Agreements: Ensuring seamless integration with programmatic platforms and self-service tools.
This model is now being emulated worldwide. In the UK, Tesco’s retail media network is rapidly scaling, providing brands with connected solutions spanning digital, in-store, and shopper data analytics. However, retailers must still adapt to the advertising industry’s expectations, particularly regarding measurement standardization and self-serve capabilities.
Overcoming Industry Barriers: The Path to Integration
Despite its rapid growth, retail media faces hurdles in achieving full-scale adoption across the broader advertising ecosystem. Key challenges include:
- Breaking Down Walled Gardens: Many retailers operate in isolated ecosystems, limiting cross-platform measurement and transparency.
- Standardization of Metrics: Unlike digital advertising platforms like Google and Meta, retail media lacks universally accepted measurement standards.
- Competition for Ad Dollars: Retailers must contend with traditional media giants, social platforms, and CTV networks for a share of brand budgets.
- Infrastructure & Technology Investment: Retailers must enhance their programmatic capabilities, automation, and self-serve platforms to attract agency investments.
Retailers who align their strategies with the broader programmatic advertising ecosystem will be best positioned to capture significant ad spend. Agencies, on the other hand, will play a critical role in navigating this evolving space, bringing expertise in data, automation, and programmatic execution.
The Future of Retail Media: Collaboration is Key
The most successful retail media networks will be those that foster collaboration between retailers, brands, and agencies. By integrating trade and brand budgets, retailers can unlock new revenue streams, while brands can drive measurable sales outcomes.
At MarkApp, we recognize that the next phase of retail media growth will be defined by:
- Programmatic In-Store Advertising: Combining digital signage, mobile, and DOOH to create real-time, personalized shopper experiences.
- AI-Driven Ad Personalization: Leveraging machine learning to serve dynamic creative optimization (DCO) ads based on real-time shopping behaviors.
- Advanced Data Partnerships: Retailers collaborating with DSPs, SSPs, and data providers to enhance audience targeting and measurement.
- CTV & Omnichannel Integration: Expanding retail media networks into connected TV and cross-device programmatic campaigns.
Retail media is no longer a niche segment; it is a multi-billion-dollar industry reshaping how brands engage with consumers. As digital commerce continues to thrive, retail media will become a cornerstone of modern marketing strategies, offering brands unparalleled reach, first-party data access, and full-funnel attribution.
For retailers, the opportunity is clear: those who invest in scalable advertising infrastructure, embrace automation, and align with industry standards will dominate the next era of commerce. At MarkApp, we are at the forefront of this transformation, helping brands and retailers unlock the full potential of retail media in an ever-evolving digital landscape.
