Retail media networks (RMNs) are poised for growth in 2025, driven by the increasing demand for targeted advertising, first-party data insights and measurable ROI from brands seeking to connect with consumers at the point of purchase.
Global retail media market is expected to be worth $179.5 billion in 2025 with a compound annual growth rate of 14.1% from 2023-2028, according to a recent Coresight Research report.
Retail media networks are digital platforms created by retailers that allow brands to advertise directly to shoppers via the retailer’s owned channels (e.g. websites, mobile apps, in-store screens and digital receipts). RMNs leverage the retailer’s first-party data to target ads catered to shoppers’ preferences, behaviors and purchase histories that deliver measurable advertising.
Compared to traditional advertising channels, like television, print media and radio, retail media is still “relatively new” for companies. 2025, retail media’s share of the global advertising market is projected to grow from 20.6% of the $752.8 billion market in 2024 to 23.2% of the $772.4 billion market, according to data from advertising agency Dentsu.
Retailers can expect RMNs to generate a 70% increase in gross margin, highlighting these platforms as highly profitable, according to Coresight. Since 2014, nearly 40 companies have developed their own RMNs, including convenience stores, grocery chains and delivery services like Instacart and Gopuff.
Data is king
Retailers continue to improve their data collection and analytic methods driven by consumers’ “search to purchase” patterns, according to Coresight. These “trails of data” are considered proprietary first-party data, the report states.
Leveraging more nuanced data points from consumers allow retailers to create and deliver targeted and customized ad campaigns – a feature that highlights how RMNs are beneficial for retailers more than brands, as previously reported by FoodNavigator-USA.
While brands are expected to pay for digital shelf space on retail media networks (RMNs) through ads, they gain the advantage of accessing retailers’ first-party data to deliver personalized ads that drive higher engagement.
Delivery company Gopuff’s AI-led RMN, which launched in July 2024, tracks consumers’ individual shopping behavior, time of day and purchase history to push personalized ads catered to each shopper. According to the company, the platform delivered strong results in its first month, including a 25% increase in click-through rates and 24% growth in conversion.
How can brands engage with shoppers?
Brands participating in a retailer’s RMN have the benefit of quantifying the impact of their ad campaigns through metrics like total clicks and page views, which ultimately help fine tune their ad strategies, according to Coresight.
Technology will continue to play an important role in addressing shoppers’ behaviors and preferences, and retailers may need to expand their ad formats while providing brands with novel ways to engage with shoppers beyond traditional formats, like sponsored ads or onsite displays. This need for expanded ad formats is largely driven by shoppers’ interaction with multiple online touchpoints, including user-generated content and influencer-led content.
According to Coresight’s report, two-thirds of 100 US brands surveyed in August 2023 expected retailers to include in their RMN offerings formats like digital coupons onsite and social promotions offsite. Nearly half of surveyed brands also emphasized the role of digital promotional tools for both in-store promotions and online digital displays.
Last year, Instacart partnered with mobile technology company Ibotta. Instacart leverages Ibotta’s catalog of digital coupons, providing shoppers with value-added offers close to the point of purchase, while increasing basket sizes and driving repeat purchases.
Retailer partnerships with media companies increasingly enhance brands' advertising footprints, according to Coresight. A notable example is Instacart’s 2024 partnership with Google, which made Google Shopping ads accessible to Instacart’s advertising partners. Through this collaboration, brands advertising on Instacart can leverage its first-party data to target shoppers actively searching for products on Google. Meanwhile, Instacart benefits by expanding its revenue streams with additional advertising units and engagement opportunities, as highlighted by Coresight.
