Is retail media the next big opportunity for ecommerce brands?

Is retail media the next big opportunity for ecommerce brands?

The numbers tell a compelling story: by 2027, retail media will command over 25% of all US digital advertising spend, surpassing $109 billion annually. Retail media networks (RMNs) offer an unparalleled combination of high-intent audiences, precise targeting and closed-loop measurement that's changing how brands connect with consumers.

For D2C, B2C, and omnichannel brands alike, the question is no longer if they should invest in retail media—it’s how to do it strategically.

What is retail media and why is it booming?

Retail media refers to advertising within a retailer’s owned platforms—like search ads, display banners, and sponsored products on marketplaces or digital storefronts. These ecosystems, called Retail Media Networks (RMNs), enable brands to target shoppers directly at the digital point of purchase using the retailer's first-party data.

Leading examples include:

• Amazon Ads: The pioneer and largest player offering the most sophisticated suite of advertising solutions across sponsored products, sponsored brands and sponsored display
• Walmart Connect: Leveraging its massive omnichannel footprint with in-store and online advertising opportunities
• Instacart Ads: Within the grocery delivery space
• Best Buy Ads: Category authority in consumer electronics

So why the surge? Retail media sits at the intersection of media consumption and shopping behavior. Unlike social media or display advertising, where consumers may be in discovery or entertainment mode, retail media engages shoppers who are actively looking to buy.

This high-intent context is further enhanced by retailers' first-party data, which includes:

• Complete purchase history across categories
• Brand preferences and price sensitivity
• Shopping frequency and basket composition
• Real-time browsing behavior
• Demographic and geographic information

The combination creates targeting precision, especially as third-party cookies continue to deprecate.

Additionally, leading RMNs can now connect online ad exposure to both digital and in-store purchases, providing a more comprehensive view of campaign impact than standalone platforms.

Overcoming common retail media challenges

Despite its promise, retail media isn’t without its hurdles:

Platform fragmentation

Each RMN operates with unique ad formats, attribution models and reporting structures. Scaling across networks requires specialized expertise and platform-specific strategy.

Increasing competition and costs

As more brands recognize retail media's effectiveness, competition for placements intensifies. Cost-per-clicks on Amazon have risen steadily, with an increase of 11.6% in 2023. Without disciplined campaign management, Return on Investment can erode quickly.

Siloed execution

Retail media often straddles teams—marketing, ecommerce, trade, sales. Without a clear owner or cross-functional alignment, performance suffers.

Channel cannibalization

Over-investing in RMNs without integrating them into your broader paid media mix can lead to inefficiencies and attribution overlap with Google, Meta or affiliate spend.

5 Strategic approaches for ecommerce brands entering retail media

1. Choose RMNs that align with your audience and distribution channels

Not all networks make sense for every brand. Consider:

• Where your target customers already shop
• Which retailers have the strongest data in your category
• Platform sophistication and targeting capabilities
• Your existing retail relationships and distribution

Focus your efforts where your target audience shops and where your products are well positioned to compete.

2. Prioritize high-impact Stock Keeping Units (SKUs)

Start with SKUs that already perform well, have strong margins or anchor key categories. 

Prioritize products for retail media promotion based on:

• Margin structure to support advertising costs
• Inventory availability and supply chain reliability
• Competitive landscape within each retailer
• Seasonal relevance and promotional calendar

Retail media accelerates momentum—it doesn't fix poor product-market fit.

3. Test on-site and off-site formats

On-site ads convert better, but off-site media (like Demand Side Platform retargeting) can drive awareness and re-engagement. 

• Start with sponsored product ads (on-site) to capture existing demand
• Expand to sponsored brand/display ads to build category awareness
• Test off-site extensions to reach new customers earlier in their journey

The most sophisticated brands build full-funnel strategies using both.

4. Tailor creative for the retail environment

Effective retail media creative is product-first, conversion-optimized and aligned with platform norms. What works on Meta or YouTube often fails on Amazon.

• Clear product imagery optimized for small formats
• Benefit-focused copy addressing immediate purchase consideration
• Strong calls-to-action that align with shopping behavior
• A/B testing of multiple creative variations

5. Work with a growth team that understands RMNs

Success in retail media requires more than budget. It requires channel-specific expertise, data fluency and cross-functional alignment.

• Build specialized in-house retail media teams
• Partner with agencies that specialize in retail media optimization

Cart.com’s Growth Marketing Team partners with brands to build, manage and scale winning strategies across retail media networks—from Amazon Ads to Walmart Connect and everything in between.

Build a smarter retail media strategy with Cart.com

Consumers will respond best to brands that treat retail media not just as another advertising channel, but as a fundamental transformation of how they engage with them during the purchase decision process.

By developing specialized expertise, you can leverage this $109 billion opportunity to drive sustainable advantage and profitable growth. 

Discover how our marketing team helps ecommerce brands drive performance across the entire customer journey. With deep expertise in retail media and marketplace strategy, we empower brands to reach high-intent shoppers, maximize ROI, and scale with confidence across platforms like Amazon and Walmart. Contact us today to know how to drive results where it counts.