Top 5 Retail Media Trends Shaping the Industry

Retail media advertising used to be a complementary activity. Retailers thought of it as an online counterpart to in-store promotions. However, what was once an experimental strategy has matured into a standalone revenue stream with a steady income.

Ad spending in retail media is growing faster than any other form of advertising. eMarketer expects it to reach $165 billion and account for 21 % of overall ad spending by 2025. Such optimistic projections leave experts wondering if this niche can dominate the advertising ecosystem in the next few years.

Meanwhile, nobody has had more success in the space than Amazon, which earned $46.9 billion from advertising, primarily from sponsored ads. Other players catch up, but Amazon has 75% of the revenue. Competitors recognize the importance of differentiating in this space and launch retail media networks to gain a slice of the earnings pie.

Success lies in adapting to significant shifts within the retail media industry. New trends are emerging and influencing retailers' investment decisions. Let's look at the top five factors shaping the domain's current and future state.

Trend #1. Active Launch of New Retail
Media Networks

Regularly updated lists of retail media networks indicate retailers' growing tendency to launch new advertising solutions. Over 200 RMNs originate from the USA, Europe, APAC, and LATAM regions. Among them, we can find retail media networks operated by brick-and-mortar and online-first retailers. Non-endemic businesses also plan to go to market with retail media platforms.

Recent studies point to booming RMN adoption rates. For example, Delloite surveyed 450 C-level executives at large US-based retail companies operating AdTech stacks.

Moreover, four in five retailers shared their plans to send an RFP for RMN vendors.

The rise of RMNs is driven by the availability of valuable first-party data used for targeting audiences with personalized messages. As third-party cookies take a back seat and publishers opt for cookieless alternatives, retailers can leverage the ideal moment to onboard more advertising campaigns.

While standardization and reporting uniformity are still in progress, advertisers are increasingly cooperating with retail media networks. The platforms’ ability to deliver full-funnel advertising solutions and closed-loop measurement attracts advertisers looking to increase ROAS and boost conversions.

What’s Next?

Market consolidation and tiered offerings can become one of the hottest retail media network trends in the coming years. Early players like Amazon and Walmart will continue to maintain top performance in the industry. Large contenders that lack widespread reach will likely create custom platforms providing exclusive ad formats and audience segments. Small players may merge into more extensive networks or focus on partial advertising capabilities instead of investing in full-scale RMNs.

Trend #2. Advanced Personalization
to Become Mainstream

Personalization has become one of the primary differentiators for retail media players, enabling them to prove their worth to advertising partners. As a response to changing user expectations, customer-centric strategies let advertisers follow the preferences of their audiences and target them with tailored ads.

The best retail media solutions currently go beyond just promising personalized ad campaigns. They deliver measurable outcomes to validate these claims. Retailers turn to AI to extend their capacity for creating resonating user experiences across any channel. Here's how:

• AI helps target audiences in real-time through personalized ads. Algorithms analyze previous interactions, purchase history, and other contextual data to get a specific brand from the right customer.
• ML-powered recommendation engines use available shopper data to suggest tailored offers for customers.
• AI supercharges predictive analytics systems' potential for improving targeting precision. Retailers employ this technology to anticipate customer needs based on identified patterns. 
• AI automates A/B testing. Different variations of the same ad go through serving pipelines without manual intervention.

Additionally, the latest retail media trends show that retailers explore diverse tactics for first-party data activation to better inform hyper-targeted advertising strategies.They obtain evergreen findings about consumer behavior and preferences by analyzing this data from different angles. Here's how:

• Build and maintain customer profiles using collected data;
• Segment customers to identify groups of consumers in the buying mindset;
• Analyze user responses to personalized messages to adjust frequency capping and other campaign settings.

What’s Next?

Retailers investing in AI and diversified first-party data collection tools will be in the optimal position to deliver efficient advertising experiences. While most AI solutions need development and refinement to become plug-and-play, their advanced capabilities have already been revealed. AI surpasses human performance in processing large troves of Big Data, leading to improved targeting with fewer resources.

Trend #3. Offsite Retail Media Placements Are on the Rise

As retailers face intense competition from their industry peers, they seek extra opportunities to monetize their digital assets. One of them is to start launching ad campaigns beyond owned properties by leveraging offsite retail media channels.

Offsite ad placement has become a growing trend among retail media platforms. It lets businesses use their exclusive first-party data to target audiences across many touchpoints. Access to extended audiences on new channels helps diversify revenue streams and attract more advertising budgets.

The trend has gained popularity among advertisers as well. US agencies spent close to $11 billion on offsite retail media in 2023, as per eMarketer data. The future projections indicate that the US ad spend in this channel is likely to reach $13.5 billion, accelerating by 27%. Other findings suggest that the rest of the world is also moving in this direction.

Offsite channels that experience ad spend surge include:

• Offsite programmatic ads. Retailers integrate their advertising platforms into DSPs to expose their retail media inventory to a vast pool of programmatic buyers. This approach helps automate ad serving on external websites and apps using RTB pipelines. Additionally, retail media platforms feed DSPs with insights derived from available first-party data to improve targeting. As a result, retailers gain a broad reach for targeted campaigns without overspending.
• Streaming and CTV platforms. Viable monetization opportunities also await retailers tapping into video inventory. This ad format engages cord-cutters who increasingly subscribe to ad-supported streaming services. For retailers, this option means leveraging the advanced targeting capabilities of streaming and CTV platforms. It also extends its audience reach beyond traditional formats like display ads.
• Audio ads. Audio streaming and podcasting platforms also provide advertising space for retail media owners. Although ad interactions happen in a listening mode, they prove to be efficient as they reach relevant audience segments with non-intrusive promotions. For example, Spotify reported that 60% of its subscribers call ads on the platform “honest and trustworthy.”
• Shoppable ads. Retailers experiment with this ad format to drive impulse buys and add interactivity to advertising experiences. As one of the most popular social media retail trends, shoppable ads are most commonly served by retailers on Instagram and Pinterest. For instance, Zara plans to launch live-shopping events in a series of broadcasts to reach a wider pool of consumers.
• In-store signage. Retailers can launch targeted promotions on digital displays within offline stores to improve in-store experiences. The most successful examples of this offsite activity combine online and offline user behavior insights to tailor dynamic ad content.

What’s Next?

As retail competition intensifies, businesses will experiment with offsite retail media placements. Advertisers will also be interested in exploring new opportunities for increasing ROAS through targeted ad campaigns on every available medium. The future of offsite retail media ads looks promising due to its potential to reuse first-party data insights across the entire advertising ecosystem, from video and audio streaming to programmatic display ads on social media and partner websites.

Trend #4 Advertisers Prioritize Retail Media Measurement

One of the red-hot retail media trends 2024 is the growing focus on measurement and reporting. Brands and advertisers are looking beyond placing targeted ads on retailers' properties. They prioritize accountability and transparency in their campaigns and expect RMNs to deliver data-driven insights and sophisticated performance-tracking capabilities.

These features help advertisers understand their investments' value and justify spending on retail media campaigns. It’s no surprise that advertisers tend to partner with retail media platforms that provide advanced reporting and analytics tools.

Successful retail media businesses adapt to these demands in the following ways:

• Centralize campaign performance data. User-friendly advertising dashboards consolidate performance information into a unified view. A dashboard displays and refreshes critical KPIs in real-time, including impressions, clicks, and conversions. Having this information at their fingertips means that advertisers can assess the efficiency of every campaign and make necessary adjustments.
• Measure closed-loop attribution. Advertisers should be able to oversee how each touchpoint contributes to conversions. Retailers must ensure complete visibility into each ad, campaign, and channel and integrate the data for consecutive tracking.
• Connect metrics to their impact. Advertisers expect retail media partners to maintain accountability for collected metrics. At the end of the day, they want to gain a complete picture of the highest- and lowest-performing strategies. More companies are looking beyond tracking impressions and churn, as their focus shifts to more tangible findings. For example, they want to understand how each interaction contributes to sales and repetitive purchases.
• Report data in consistent formats. The Association of National Advertisers noted that the lack of measurement standards limits ad investments in retail media. Industry-wide documentation is still in the early stages of development, allowing retailers to create their own measurement paradigms. Meanwhile, the top industry performers thrive by creating tailored reporting solutions that respond to the unique needs of individual clients.

What’s Next?

Retailers will employ advanced analytics platforms and AI-powered tools to facilitate real-time reporting from all touchpoints. They will prioritize omnichannel attribution models to deconstruct incremental metrics in online and offline settings. More investments will be poured into ML models that will connect ad interactions to actual purchases.

Trend #5 Omnichannel Integration for
Full-Funnel Advertising

It’s no secret that modern consumers prefer to interact with retailers through multiple channels. They engage with online, in-app, and in-store advertising content at every stage of the shopping funnel. Audiences also change their shopping habits from time to time. As retailers collect rich data related to shopping patterns and cross-channel behaviors, they can offer new omnichannel opportunities for buyers.

Advertisers now expect retail media platforms to:

• Provide complete funnel advertising solutions that support all stages, from discovery to post-purchase:
  • Awareness;
  • Consideration;
  • Purchase;
  • Loyalty.
• Map out omnichannel customer journeys by integrating shopper data from social media, onsite, offsite, in-store, and out-of-home (OOH) channels;
• Deliver a 360-degree view of individual audience preferences beyond online-only experiences;
• Leverage real-time insights and AI-driven automation to serve consistent and personalized ads on every medium;
• Use data integrations and data clean rooms to provide on-demand access to information on any touchpoint and metric;
• Eliminate internal data silos and ensure uninterrupted interoperability and data exchange between systems;
• Create seamless integrations between advertising platforms, websites, offline stores, loyalty programs, and marketing tools;
• Provide comprehensive opportunities for measuring the impact of omnichannel campaigns.

What’s Next?

Omnichannel strategies will top the lists of retail media advertising trends in the coming years. Its future looks promising due to the proliferation of innovative technologies. They facilitate real-time analytics, automated first-party data processing, and seamless integration of diverse channels. By using data-driven insights about target audiences, retailers will serve full-funnel ads across online and offline channels.

How Geomotiv Helps You Navigate
the Biggest Trends in Retail Media

Our company stays on top of the latest changes shaping the current and future state of the retail media industry. We monitor dynamic shifts in the ecosystem to help you secure large advertising budgets. Geomotiv also provides you with advanced tech expertise to help you overcome intense retail competition.

With vast experience in custom software development for AdTech, MarTech, and retail media domains, Geomotiv helps digitally transform your retail operations. With our support, you can:

• Build custom retail media networks from the ground up;
• Implement AI-driven personalization, predictive analytics tools, and recommendation engines;
• Connect with programmatic advertising platforms and RTB auctions;
• Create custom analytics dashboards and closed-loop attribution models;
• Implement modular architecture to eliminate data silos;
• Segment audiences across all touchpoints with your in-house CDP.

Conclusion

Ever since retailers moved from brick-and-mortar stores to online settings, they have learned to some extent to adapt to shifting consumer behaviors. However, the recent changes in retail media advertising are unlike anything they have seen. To compete with other players, retailers must create and optimize differentiating offers.

Emerging concepts like full-funnel retail media ads, hyper-personalized messages, and offsite audience extension require new approaches. Additionally, brands and advertisers actively call for retailers to adopt innovative AI-powered tools and predictive analytics systems.

The good news is that you can get expert help when traveling the route. With an experienced retail media development partner like Geomotiv, navigating retail media trends 2025 and beyond will become easy. Contact us to incorporate innovative functionalities into your retail media platform today!

FAQ

We Help Unlock Answers to Your Questions

How is social media used in the retail industry?

Retailers leverage social media as a crucial element of the omnichannel strategy. They connect with audiences, promote products, and collect first-party data to inform marketing strategies.

What are the challenges retail media businesses face?

Tightened data collection regulations and integration complexities are typical roadblocks. Learn other challenges and the best ways to overcome them in this article.

How does AI affect retail media operations?

AI and other emerging technologies contribute to improved personalization, precise targeting, and accurate predictions. This blog post explores other cases of AI being used in advertising.