Turning Shopper Data Into Revenue: Retail Media Explained

Data and attention are the new currencies in today’s rapidly changing retail landscape. While traditional advertising models are losing efficiency, retailers are finding innovative ways to monetize their most valuable asset: their shoppers. This is where retail media comes in.

What Is Retail Media?

Retail media refers to advertising opportunities that retailers offer on their own digital platforms, such as websites, apps, and in-store screens. It allows brands to place targeted ads directly within the retail environment where purchase intent is at its peak. Think of it as the retail version of Google Ads or social media advertising, only it happens much closer to the moment of purchase.

For example, when a shopper searches for “shampoo” on Amazon, the first few listings might be sponsored products. That is retail media in action. It gives brands direct visibility and enables retailers to earn advertising revenue while improving the customer experience with relevant product suggestions.

How Retail Media Is Achieved

Retail media is built on the foundation of ‘first-party data’, which comes directly from a retailer’s digital channels and customer interactions. This data includes browsing history, purchase patterns, and demographic insights, all of which can be used to create precise audience segments.

Retailers then use Retail Media Networks (RMNs) to manage and sell this advertising inventory. RMNs operate similarly to digital ad platforms but are tied to a specific retailer’s ecosystem.

Examples include:

* Amazon Advertising, the pioneer and global leader in retail media.

* Walmart Connect, which leverages in-store and online data to serve ads across multiple touch-points.

* Target’s Roundel, offering brands access to guest insights for personalized campaigns.

* Tesco Media & Insight in the UK, which combines ‘Clubcard’ data with media placement to help brands drive measurable ROI.

Through RMNs, advertisers can target audiences not only on a retailer’s website but also across external digital channels using data clean rooms and partnerships with ad tech companies.

Retailers are also extending retail media beyond e-commerce platforms. In-store screens, digital shelf displays, and connected TV (CTV) advertising are all part of this growing ecosystem. For example, Kroger Precision Marketing uses both online and in-store channels to reach shoppers at different stages of the buying journey.

The Benefits of Retail Media

1. New Revenue Streams for Retailers

Retail media allows retailers to diversify income beyond product margins. For instance, Amazon’s “Other” category, which largely includes advertising, generated over $47 billion in ad revenue in 2024, making it one of its fastest-growing business units.

2. Better ROI for Brands

Because retail media targets consumers who are already in a shopping mindset, it tends to deliver higher conversion rates than traditional advertising. A McKinsey study found that retail media campaigns can produce 10 to 15 times higher return on ad spend (ROAS) compared to standard digital ads.

3. Enhanced Customer Experience

When done correctly, retail media improves the shopping experience by showing relevant products rather than intrusive ads. Personalized placements can guide shoppers to discover items that genuinely match their needs.

4. Improved Measurement and Attribution

Unlike other digital ads, retail media connects directly to actual sales data, giving brands clearer visibility into how their ad dollars drive conversions. This level of closed-loop measurement is a major advantage in an era where third-party cookies are fading.

5. Greater Collaboration Between Retailers and Brands

Retail media fosters a more collaborative relationship. Brands gain valuable insights into shopper behavior, while retailers benefit from shared marketing budgets and data-driven growth strategies.

The Future of Retail Media

Retail media is evolving beyond simple sponsored listings. The next wave involves ‘AI-powered personalization’, ‘cross-channel measurement’, and ‘real-time bidding’ integrated into retail ecosystems. As retailers expand their digital capabilities, retail media will likely become a core profit driver, on par with traditional product sales.

In essence, retail media is not just a marketing innovation; it is a strategic business transformation. Retailers who invest early are positioning themselves at the center of the advertising ecosystem, turning shopper intent into one of their most powerful assets.

Is your company already taking advantage of the potential of retail media?