Retail media has, in a relatively short time, moved from the margins of digital strategy to become one of the most dynamic and fast-evolving parts of the advertising economy. What began as an add-on to e-commerce now sits at the heart of how many retailers engage with brand partners, monetise their digital ecosystems, and plan for growth. According to eMarketer, retail media is expected to be worth over £4 billion in 2025 which is around 10% of total advertising spend in the UK. This shift hasn’t happened by chance. It reflects broader changes in how data is used, how advertising is measured, and how commercial value is created in a more connected retail landscape.
The core driver is first-party data. Retailers, particularly in grocery, have long captured detailed insights through loyalty programmes, transaction history and digital interactions. But now, as the technology has improved, advertisers are able to use that data to tap into the connection between customer behaviour and final purchase choices in a way they haven’t previously been able to do at scale. Senior Director, Global Strategy & Innovation at SMG, Ollie Shayer, says: “The most critical element in the progression of retail media has been the evolution of the technology that is now available to make the data retailers hold more easily accessible for brand partners to use.
“Customer led data is a marketeer’s holy grail, and increasingly over the last few years retailers have been able to utilise the data they already hold more effectively.”
When used successfully, this data allows them to target specific customer groups and measure the impact of their campaigns with far more accuracy than most other advertising channels.
“This shift hasn’t happened by chance. It reflects broader changes in how data is used, how advertising is measured, and how commercial value is created in a more connected retail landscape.”
The ability to track a campaign from impression through to purchase is especially important for FMCG brands, where marketing spend is increasingly scrutinised. Ollie explains: “Measurement has become more key holistically across retail. We’re going through a world where all marketing budgets are being heavily scrutinised.” In the past, proving return on investment meant relying on proxies in the form of brand awareness surveys, assumptions about footfall or halo effects, but retail media offers something more concrete. By connecting advertising activity to real-world sales both online and offline, the data allows for more accurate decision-making and makes it easier to measure the true impact of marketing efforts.
Some have chosen to optimise campaigns within a closed-loop environment in-house, giving them greater control and allowing for tighter integration while others are working with tech partners to accelerate progress. In both cases, the objective is to create something scalable and sustainable rather than targeting short-term monetisation. When done well, retail media becomes more than a source of revenue, helping retailers to build stronger partnerships with suppliers by offering valuable insights and performance data while also enhancing the customer experience through more relevant and timely content.
As these platforms continue to evolve, the broader advertising landscape is shifting with them, as publishers and agencies adapt. Caroline Orange-Northey, Director of Retail at Pinterest and previously Head of Lifestyle Industries for Amazon Ads tells me: “In Europe, retail media will become an integral component of comprehensive media strategies rather than an isolated effort with separate channel marketing budgets.
“Moving forward, the focus will shift toward orchestrating unified media strategies and recognising that upper-funnel media (TV ads, brand awareness campaigns etc.) can drive sales and that lower-funnel conversions (search ads etc.) can effectively support brand building.”
Alongside the media agencies, retailers are emerging as serious players, as they can offer a different kind of value proposition built around proximity to purchase, rich customer data, and strong consumer trust. For brands, this means rethinking their approach, as traditional media buying frameworks often lack the flexibility to account for retail media’s unique structure. Steve Ricketts, Chief Commerce Officer of Publicis Media says: “Retail media is no longer a choice for retailers; it is existential as they cannot afford to leave money on the table for their competitors.”
Now, success is increasingly reliant on collaboration, shared objectives, and the agility to operate within new and more integrated models. An example of this which Steve shared was Vauxhall’s sponsorship of electric vehicle charging points in Tesco car parks. This initiative, which was delivered by Publicis, rewarded new electric vehicle buyers with 50,000 Clubcard points. This rewards shoppers, generates incremental revenue for Tesco and drives success for Vauxhall.
Part of this evolution involves looking beyond a retailer’s own digital real estate. Offsite media is becoming a key part of the retail media landscape as leading platforms push beyond their own websites and apps to activate retailer data across social media, video, and display networks. This expansion allows brands to reach customers at greater scale without losing the precision that first-party data enables, extending its influence into the wider digital ecosystem. What was once limited to the online supermarket is now part of a much broader and more connected journey that follows the customer wherever they are and keeps the path to purchase firmly in view.
All of this introduces a new level of complexity, as building a compelling retail media offering requires investment not just in technology but in capability. Teams need to navigate data privacy, performance marketing, content production and partner management, often simultaneously, with skillsets that are both diverse and still evolving. The talent pool remains relatively shallow, so for many businesses, finding the right people is becoming one of the biggest barriers to scale. Caroline explains: “It’s essential to assemble a team with complementary capabilities across data analytics, customer experience, behavioural science, creative strategy and strategic skills.
“Leaders should prioritise hiring talent that not only brings these diverse skills but also fosters collaboration across distinct teams.”
“Retail media is no longer a choice for retailers; it is existential as they cannot afford to leave money on the table for their competitors.”
Steve agrees saying: “Diversity in all measures is really important. From a skillset point of view, retail media needs a mix of people from retailers, from brands and people from media agencies.”
The physical store is also a critical part of retail media. Advances in screen technology, smart shelving and footfall analytics are bringing digital precision to in-store environments. Campaigns can now be delivered and measured across multiple touchpoints, linking what a shopper sees on their phone to what they encounter in the aisle, a shift from previously analogue options.
So where is all this headed? One of the biggest changes underway is how retail media is being organised and managed. What started as an informal effort is now becoming more structured, with many retailers setting up dedicated business units. This shift brings greater accountability, sharper focus and sends a clear message to internal teams and external partners alike that retail media, as it is now, is no longer an experiment but a long-term commitment that is central to retailer strategy.
Retail media is more than just an extension of e-commerce or a quick fix for shrinking margins. It represents a fundamental change in how retailers and brands work together and where the industry’s value is heading. The next phase will favour those who combine ambitious commercial goals with operational know-how and who understand that the real prize lies not in selling more ads but in creating stronger, data-driven relationships throughout the value chain. This is where the lasting value will be found, and it is those who know how to use it who will see success.
