Next time you open your grocery app to reorder coffee, notice which products jump to the top. That sponsored listing? It’s no random placement—it’s part of retail media. What began as a simple tool for online shops has grown into a major profit driver for retailers and a powerful way for brands to reach customers.
Turning Product Pages into Profit
On core grocery items, retailers typically make just 1–5% profit. But by turning product pages into ad space, they’re generating margins of 40–70%. Those high margins fund flashier apps, faster updates, cleaner experiences, better loyalty perks—and keep retail prices competitive.
Ads That Actually Help You Shop
The difference between retail ads and regular display ads? Intent and data. Retailers know what you’ve bought before and what you might need next. That first-party data powers targeting that’s up to 94% more efficient, according to recent studies. Brands spend smarter; shoppers see smarter suggestions; fewer ads feel irrelevant.
Money Talks: The Growth Numbers
The shift toward retail media isn’t small—it’s seismic:
- U.S. on-site retail ad sales are projected at $56–61 billion by 2025
- $230 billion globally by 2028
- U.S. commerce media spending is set to increase 21.8% in 2025
Amazon leads the charge: $13.9 billion in Q1 2025, topping $56.2 billion for full-year 2024.
“Retail media turns every product page into a revenue driver,” says Scott Cohen, CEO of InboxArmy. “With first‑party data, retailers can finally link ad spend directly to sales lift.”
Real Results on the Books
Walmart Connect—Walmart’s ad platform—generated $4.4 billion in ad sales in 2024, a 27% increase year-over-year. Then in FY 26, it grew 31% year-over-year, showing that retail ads aren’t a gimmick—they’re pushing real profit.
Brands Shifting Budgets
Many consumer-goods brands now allocate 10–20% of their digital ad budgets to retail media networks. Target’s in-house ad platform, Roundel, grew ad sales 20% in 2023, hitting $1.5 billion—a sign that brands are chasing clearer attribution and measurable returns.
Beyond the Storefront
Retail media isn’t just confined to shopping apps anymore. Off-site placements—think social media, video, even streaming—powered by retailer data are up 42.1% in 2025. This lets brands reach you across channels using the data you’ve already shared, without feeling intrusive.
What’s Just Ahead
Soon, expect:
- Self-serve ad platforms for smaller brands
- Real-time personalization based on your latest cart actions
- Privacy-first data sharing, e.g., secure “clean rooms” that protect shopper privacy while enabling precise targeting
For shoppers, that means more relevant offers and fewer irrelevant ads. For brands and retailers, it means every click, scroll, and “Add to Cart” becomes a measurable investment—boosting both sales and profit.