Remember the days when retail media was called shopper marketing, and was dominated by gondola ends, shelf-wobblers and take-ones devised by sales promotion agencies? Yep, that was 2010.
Fast-forward 15 years and the channel has exploded into a multi-billion-dollar industry, projected to exceed $150bn globally in 2025 and accounting for more than 20% of all digital advertising spend.
This rapid evolution, driven by the ecommerce boom, the strategic use of first-party data, and a demand for measurable ROI, has fundamentally repositioned retailers as formidable media owners and created an entirely new ecosystem.
In 2010, brands were still heavily reliant on traditional advertising channels like TV and print, with digital advertising yet to achieve its full potential.
But the seeds of change were sown by Amazon, which launched its advertising division in 2012, with Amazon Marketing Services (AMS) the first PPC platform for sellers. By 2018, the platform had been rebranded Amazon Ads and the campaign manager was combined with AMS.
Once again, the widespread adoption of smartphones and the subsequent ecommerce boom soon created a wealth of digital opportunities and, crucially, first-party data on consumer purchasing behaviours.
While the likes of Tesco-owned DunnHumby and Sainsbury’s-owned Nectar had been building shopper insights for years through their loyalty schemes, suddenly other retailers began to recognise the opportunity to offer brands an unprecedented ability to target consumers with precision and measure the direct impact of ad exposure on sales.
This has also opened up major contracts for data giants Experian, Acxiom, The Trade Desk, LiveRamp and Epsilon, as well as online specialists SMG, Criteo, CitrusAd, Gig Retail, and BrandSwap.
Major players in the US, like Walmart, Target, and Kroger, began formalising their own retail media networks to monetise their digital assets.
The shift was accelerated by increasing data privacy regulations like GDPR, which made retailers’ first-party data an invaluable, privacy-compliant asset. The market started its “explosive growth” phase in 2019, with UK digital adspend rising from £1.32bn that year to £1.78bn within 12 months.
By 2021, retail media was firmly established as a mainstream advertising channel, no longer just a “niche add-on”. Its growth accelerated, with global spend surging past $100bn.
A number of factors have contributed to this, including a blurring of the lines between online and physical shopping, which has led to a push for seamless experiences across all touchpoints, from ecommerce sites to in-store digital displays.
Meanwhile, the adoption of programmatic ad buying has automated and streamlined campaign management, and self-service platforms have empowered brands to take greater control of their ad spend and optimisation.
In addition, beyond sponsored products, retail media networks have started to offer a wider array of formats, including video, connected TV ads, and off-site opportunities that extend reach beyond the retailer’s owned properties.
In the UK alone, Tesco, Sainsbury’s, Asda, Co-op, Ocado, Morrisons, Boots, Superdrug, John Lewis, Waitrose, Currys, M&S, B&Q, The Very Group, Asos, PrettyLittleThing, Boohoo and River Island have all jumped aboard, offering online, in-store, and offsite channels backed by rich first-party data.
Meanwhile, the exponential growth of retail media is now creating opportunities for other commerce-led vertical sectors to open up their digital assets to advertisers, including the airline, hotel, and financial services brands, with Deliveroo, JustEat, British Airways, American Express, PayPal and JPMorgan leading the way.
In fact, a Criteo report, published last year, revealed that nearly two thirds (58%) of brands and over half (51%) of agencies would like to see other verticals beyond retail further monetise their digital footprints.
In addition, more than eight out of ten (83%) publishers are curious to tap retail media ad spend by embedding products on their web pages, opening up more inventory opportunities for offsite campaigns.
Among the other key findings, an overwhelming proportion of agencies (93%), brands (88%) and retailers (89%) said retail media has had a strong or positive impact on their bottom line. In fact, eight out of ten (79%) advertisers agreed retail media spend is more effective in terms of sales than any other channel.
The trajectory seems pretty clear: retail media is now an essential component of the modern marketing mix, and its influence will only deepen in the years to come.
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