After five years of being one of the fastest growing areas of marketing, retail media is transitioning from its early growth phase to maturity. The latest IAB ad spend study predicts the industry will grow thanks to 12.1% in 2026.
Retail companies have launched dozens of media networks. Brands have moved billions of dollars into retail environments. Tech companies have built systems that connect media exposure to purchase data. For a while, growth came easily. Market Continues to Grow: Forrester Predicts Global Retail Media Investment to Eclipse 300 billion dollars by the end of the decade.
But behind this growth, a more complex reality emerges:
- Growth mainly comes from a few large players, capture most retail media investments.
- So far, trade and consumer budget reallocations have fueled most of the growth. Industry estimates suggest that between 30% and 60% Investments in retail media come from commercial and consumer funds. But this well is drying up. The next phase of growth depends on securing additional media budgets.
These aren’t the only challenges the industry faces as it attempts to expand its influence. The industry faces tough questions around accountability, integration and business outcomes. How we address these challenges will determine our ability to redirect investments from other digital channels and increase budgets.
Signals suggest that retailers are changing how they view their media networks. In the beginning, many businesses treated retail media as a monetization tool – a way to extract extra margin and leverage their existing traffic and shopping data. This approach established the category.
Today, leading retailers view it as a capability that connects multiple parts of the business. Increasingly, it is located at the intersection of:
- Merchandising.
- Marketing.
- Loyalty programs.
- First-party data.
- E-commerce platforms.
- In-store operations.
This integration creates opportunities, but it introduces considerable complexity. This is forcing organizations to rethink team collaboration and requires new incentives, new operational structures and leadership alignment.
Operational obstacles increasingly exceed technological obstacles.
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Measurement progress has been modest and far from resolved
Measurement is the second major pressure point. Closed-loop attribution helped drive early investments. The ability to link media exposure to purchase data remains valuable. Retail Media Networks (RMNs) offer more advanced measurement.
But as spending increases, advertisers are asking tougher questions:
- Did the media generate additional sales or capture existing demand?
- How can I evaluate and compare NMR performance?
- How should we measure campaigns that span digital and physical environments?
These challenges become more pronounced as commercial media expands into stores. Physical retail captures some of shoppers’ most valuable attention. Yet measuring in-store media remains challenging, especially when exposure and purchase occur within seconds of each other.
Further progress in commercial media measurement depends on transparency: disclosure of methodologies, data and blind spots.
The broader retail industry is evolving as boundaries blur. Retailers operate as media platforms. Media companies are adding shopping to content environments. Tech companies are integrating commerce into discovery experiences.
At the same time, artificial intelligence is reshaping the way consumers research, evaluate and purchase products. In some cases, AI already guides a large part of the purchasing journey.
This raises important questions for marketers.
- As product discovery becomes more and more automated, how does influencer marketing work?
- What place do NMRs have in this future, if at all?
The answers remain unclear, but they will shape the next phase of the industry.
With the growth of NMR comes higher expectations. The next phase will force the industry to address several structural challenges:
- Integrate NMRs into broader marketing planning and budget frameworks.
- Establish measurement approaches that demonstrate incremental business impact.
- Create technology systems that enable retailers, brands, agencies and platforms to collaborate more effectively.
- Adapt to a future where AI and automation reshape the purchasing journey.
These questions will be at the heart of discussions within the IAB Connected Commerce Summit on April 14 in New York. Industry leaders from retail, FMCG, consumer electronics, service providers and technology companies will examine the future of this category. Join us as we write the answers to the industry’s biggest challenges.
The easy growth phase is over. The next phase will depend on the industry’s ability to build the systems needed to scale sustainably.
