While Amazon dominates the buzz, retail media isn't a recent phenomena. From in-store product samples to printed circulars, retailers have always used their spaces to influence purchases. The goal remains the same: engage shoppers with their wallets already open and drive sales.
The internet, e-commerce, and smartphones fueled retail media's evolution. No longer confined to brick-and-mortar stores, advertisers have found new ways to reach consumers. Mobile devices have revolutionized shopping, creating opportunities for retail media to follow shoppers anywhere.
The pandemic accelerated online shopping and cemented the value of digital stores. Increased customer volume, rich data, and a new revenue stream became undeniable benefits for both brands and retailers.
Omnichannel and the Cookie's Demise
Programmatic advertising and social media's growth underscored that customer journeys extend across numerous platforms and devices. This gave rise to Retail Media 2.0: the omnichannel approach. Combining on-site and off-site strategies allows brands and retailers to gain unparalleled insights into the customer experience, leading to more effective media planning.
With third-party cookies crumbling, retailers and brands recognize the power of their first-party data. Partnerships will form to combine this data, opening new purchase opportunities and cross-sell strategies throughout the buyer journey.
Explosive Growth and Challenges
This evolution drives huge growth as consumers seek convenience on marketplaces and brands see the strategic importance of retail media. Personalization and data connect shoppers with products they might love but haven't discovered yet. Retailers of all sizes capitalize on new revenue streams. However, with rapid growth come challenges.
Forrester predicts that by 2026, the U.S. retail media market will double to $85 billion. Surveys indicate 73% of brands will boost their retail media spending. This rapid expansion can strain the retailer-brand relationship unless retailers take decisive steps to demonstrate their understanding of brands' KPIs and prioritize long-term growth.