Inside the $179.5 Billion Surge in Retail Media Networks for 2025

As we approach the midpoint of 2025, the retail media landscape is undergoing a seismic shift, transforming the way brands connect with consumers and reshaping the advertising industry. The retail media sector is accelerating into a critical maturity phase, with networks projected to generate $176.9 billion globally in 2025—surpassing total TV revenue for the first time and representing 15.9% of total advertising. The retail media industry is projected to generate $179.5 billion globally in 2025—a 15.4% year-over-year increase—as brands and retailers prioritize AI-driven personalization, self-serve platforms, and standardized measurement. Bain & Company’s 2024 report highlights the urgency for stakeholders to adapt, warning that retail media’s “easy growth” phase is ending as the market enters a performance-focused era demanding strategic sophistication.

Market Outlook & Key Drivers

Retail media’s rise, fueled by first-party data and closed-loop attribution, has made it a rare bright spot in retail. Bain forecasts the sector to grow 12% annually through 2026, with networks like Amazon (75% market share) and Walmart Connect (+31.6% growth in 2024) leading the charge. Three factors underpin this expansion:

1. First-party data dominance: Retailers leverage shopper insights to offer hyper-targeted ad solutions.
2. AI-driven efficiency: Machine learning optimizes ad placements and automates campaign management.
3. Profitability: Retail media delivers margins exceeding 50% for retailers, far outpacing traditional trade.

Emerging markets are also gaining traction, with over 200 retail media networks (RMNs) now operating globally, per Total Retail.

Top Trends Defining 2025

1. AI-Powered Personalization:
   Advanced algorithms enable real-time ad customization. For example, Kroger’s partnership with Disney targets shoppers on streaming platforms using purchase history data.
2. Self-Serve Platforms:
   Retailers like The Home Depot are adopting unified self-serve portals, allowing advertisers to manage campaigns autonomously. Gartner’s Greg Carlucci notes this shift will drive scalability: “2025 will be the year of standardization—retailers that simplify buying will win.”
3. In-Store Digital Integration:
   Spending on in-store ads (digital displays, smart shelves) is expected to rise 47% as retailers like Walmart test immersive formats.
4. Measurement Standardization:
   Bain emphasizes the need for consistent ROI metrics as advertisers demand transparency. Coresight Research highlights efforts to unify cross-platform analytics.
5. Offsite Expansion:
   Brands are diversifying beyond retailer websites, with offsite ad spending (e.g., social media, connected TV) projected to grow 61.5%, per Dragonfly AI.

Strategic Shifts for Retailers and Brands

• Retailers: Focus on operational efficiency. Bain advises investing in integrated tech stacks to reduce workflow fragmentation and enhance advertiser ROI.
• CPG Companies: Prioritize RMNs offering full-funnel impact. Unilever and P&G are testing AI tools for dynamic creative optimization and supply chain alignment.

Challenges Ahead

Despite optimism, hurdles remain:

• Advertiser overload: Over 80% of top U.S. retailers now have RMNs, creating choice paralysis for brands.
• Data privacy: Rising consumer scrutiny demands ethical data use, with 75% of shoppers seeking transparency.
• Profit pressure: While RMNs are lucrative, Bain warns that underperforming networks risk obsolescence as advertisers prioritize measurable returns.

The Road to 2026

Bain projects the market to hit $140 billion by 2026, with the U.S. leading at 16% annual growth. Winners will balance innovation with foundational improvements:

• Retailers: Streamline self-serve tools and in-store ad relevance.
• Brands: Allocate budgets to RMNs demonstrating proven sales lift and audience insights.

For those willing to adapt, the rewards are substantial—but the window for experimentation is closing fast.