How Retail Media Is Transforming The Retail Industry

4 min readJul 25, 2022

Ecommerce has been on the rise for years, but the pandemic pushed online shopping to meteoric new heights. With growth across nearly every spending category, this evolution has opened compelling new doors in online advertising — and in retail media specifically.

Retail media is one of the most critical elements for the future of programmatic growth, but for many brands, it’s still a largely unexplored space. It’s sometimes confused with retail marketing, which can also be referred to as shopper marketing and trade marketing, but a retail media network — RMN for short — is a very specific tool in the retail advertising space. By exploring the ins and outs of these digital ad platforms, it’s possible for brands to establish a strong strategy in the retail media space unhindered by shortcomings in other eCommerce areas.

What Is a Retail Media Network?

A retail media network is an advertising service owned by a retailer that allows for the purchase of digital advertising space — and utilization of first-party data throughout a customer’s buying journey — across all of the retailer’s digital assets. Effectively, it’s a way to connect advertisers and customers using a retailer’s platform, providing a tool with which to target customers throughout the buyer journey. For advertisers who want to hone in on the customers with a penchant for a particular retailer, there’s no better way than through a retail media network. Ads can appear on product pages, category pages, brand pages, or all of the above to create a curated buying experience.

Why Is Everyone Talking About Retail Media Networks?

The opportunity to advertise on retailer websites isn’t exactly new, so why are retail media networks such a hot topic?

With eCommerce continuing to rise, advertisers see the opportunities available in attracting customer attention at the point of sale. Using an RMN for advertising purposes is similar to a cardboard cutout in a product aisle or a display next to the cash register — a convenient way to influence customers toward a purchasing decision when it matters most.

Traditional retail media isn’t quite as specific. There are only so many ways to advertise within a store, which means someone loses. In a digital space, a huge swath of the internet is dedicated to shopping and buyer behavior, meaning that with an RMN as a part of the strategy, advertisers can always be close to the point of sale.

The Increasing Number of RMNs

Retail media networks are on the rise for one simple reason — opportunities to leverage data.

The amount of data on customers available to retailers is immense, and it’s exclusively available on a retailer’s own platform. Most retailers are hesitant to provide access to customer loyalty information with nothing in exchange, so the best way to use this data to convert shoppers is within a retail media network environment. The data available — things like demographics, shopping behavior over time, and buying trends — can help advertisers target the right people at the right time, ensuring more bang for the buck.

In general, RMNs aren’t necessarily effective at contributing new users, but instead in driving more sales from an existing userbase. However, when there’s a data-sharing partnership in place, in which customer credit card info is directly linked, new users may be a happy coincidence in addition to innate benefits.

What Is the Opportunity for Retail Media?

Retail media networks aren’t growing simply for fun; they’re growing because the opportunities available are worth the investment. As this space continues to drive business, brands of all kinds are eager to take advantage.

But what kind of growth potential is on the horizon? According to recent trends, a lot. Research indicates that the retail media market will grow an estimated 25% YOY, hitting a market share of $100 billion within five years and encompassing more than a quarter of digital media spending by 2026. Advertisers are seeing the benefits of closed-loop measurement capabilities — and the ways in which RMN can tie a campaign to omnichannel sales. In essence, it’s a marketing channel and business opportunity in one. And the potential for profits is huge. One analysis found that advertisers leveraging a retailer’s media network will see a growth rate of over 20% a year, with margins as high as 90%. Offsite media opportunities — a common choice for smaller retailers not interested in setting up their own channels — are growing, too; margins aren’t as high, but growth rates average around 35% per year.

Changing data sources can also make RMNs a convenient, compelling option for advertisers to explore. As privacy concerns accelerate and third-party data sources shrink, using RMNs can keep key customer info readily available. With Facebook losing an estimated $10 billion in advertising revenue in 2021 alone due to changing privacy policies, now’s a great time to participate in retail media networks as the data sources are all first-party and aren’t impacted by third-party privacy shifts.

With RMNs in use, everyone benefits — retailers included. For retailers, selling ad space can be even more profitable than selling goods. This can be quite beneficial in a digital marketplace, which can have lower margins than brick-and-mortar sales. Boasting so many advantages, it’s not hard to see why RMNs are among the most important retail trends of 2022, and why savvy advertisers are advised to hop on board.

For advertisers seeking new opportunities as well as retailers looking to capitalize, retail media networks hold a wealth of potential. By participating in RMNs established by major brands, like Amazon Advertising, Walmart Connect, and Target Roundel, or in offsite options serving small to mid-sized players, there’s a good fit for advertisers of all kinds.




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