Retailer diversification is prevalent—and there is no greater evidence of how retailers are evolving into new-style organizations than the rise of retail media.
Since Amazon revealed its advertising division made $31.2B in 2021, the wider retail industry has embarked upon a gold rush to find and grow new income streams by building their own media arms. There was work in the space before, but a whole new ecosystem of companies supporting retail media has emerged in the last four years, and the term has become a buzz phrase in digital commerce.
Amazon’s most recent figures place annual revenue for its ad division at $46.9B, while Walmart revealed its global ad business was worth $3.4B in 2023-2024, and Target, Kroger, Walgreens Boots Alliance, CVS, and Best Buy are among those with significant skin in the game—there are opportunities for all, and a multitude of new ideas forming.
It shouldn’t be a mystery why so many retailers are following this route, which we identify as US retail industry trend #1 in a 2025 trends report published in October 2024. Many think the digital ad landscape has simply not improved in the last 20 years, and retail media has the potential to bring the closed loop, trackable, and targeted offering brands desire.
Research from Path to Purchase Institute and digital marketing agency Goodway Group into the factors driving retail media network investments found 75% of brands and retailers agree retail media improves their relationships and collaboration. And 80% of CPG brands rank data and insight quality, scale, reach, and reporting capabilities as the most influential considerations impacting retail media investment.
For retailers, though, it’s all about the dollars—and finding ways to serve their customers better.
In many compelling examples of retail media, it’s a case of simply utilizing existing assets to generate new revenue streams. And what an enticing strategy that must be for finance, marketing, and commercial executives looking to balance the books in a tough economic climate—they should always be on the lookout for these wins.
How can they find other partners who can help them earn more money from what they already do?
Retailers are building new media strategies around their loyalty programs, for example, utilizing the rich data here to help brands get in front of the right consumers. They are using email space for further advertising opportunities, and they are placing ads on their websites, which have grown traffic in the wake of the post-pandemic e-commerce boom, and they are realizing placing ads in the position where shoppers are ready to make a purchase is a powerful play.
There is a significant post-transaction opportunity for retailers too. Advertising on an order confirmation page, after a customer has completed a purchase, can be a strong tactic as that consumer is in a buying mindset and should react well to a neatly timed offer.
In the last two decades, the digital media space made a lot of promises that were not held up, and retailers are coming along and delivering on some of those promises. In the best examples—although personalization is a work in progress—brands can reach the right people with the most relevant message, and ad performance is measured.
There is great opportunity through retail media for retailers to help make advertising better for partner brands—via A/B testing, segmenting messaging, or other methods. Retailers have the data brands want, and the retail media movement is sharpening how retailers and brands work with one another, as well as fostering new-style partnerships.
If in a decade’s time a retailer is relying solely on customers to pay for goods, it’ll be at a significant disadvantage—there’s growing momentum for this way of thinking in the industry. There is a need for retailers to bring additional services to the table and protect themselves from a fast-evolving consumer base that can love shopping with them one minute before moving on to something else and a competing brand the next.
Best Buy is now sharing ad inventory with tech reviews platform CNET and is a prime example of a retailer trying new things to augment the traditional revenue stream. The partnership involves the latter’s product reviews and ‘expert picks’ being displayed in the former’s stores, and on its website and mobile app.
Analyst at research house eMarketer, Rachel Wolff, calls this a “mutually beneficial” tie-up because it gives both sides (and advertisers) access to more than 50 million unique users per month. And she’s confident similar retail media partnerships will emerge in 2025—there’s simply so much innovative thinking going on in this space.
As retailers venture into this new world of retail media, they’ll need to be acutely aware of the U.S. data privacy framework which changed dramatically in 2020 as the California Consumer Privacy Act created heightened compliance for organizations collecting personal information about California residents. Several other states have now implemented data privacy rules, meaning retailers must forge ahead with caution.
Ultimately, retail media is an opportunity not to be missed. Now is the time for retailers to explore how they can make money from repositioning themselves as media players.
Read how Exhance can augment your retail media strategy and help drive post-transaction revenue and customer loyalty.