The Evolving Landscape: Beyond Search Dominance
The global retail media market is on track to approach $200 billion by 2027, marking a maturing phase following years of rapid expansion. While growth remains strong, the pace is moderating. One of the most notable shifts within this landscape is the move away from search-focused advertising to a heavier reliance on display and off-site ad formats. Display advertising, including channels such as connected TV (CTV) and digital out-of-home, is becoming a key driver of this growth, reflecting a broader push toward more visually engaging, brand-building opportunities.
This transition underscores the necessity for retail media networks (RMNs) and advertisers to adopt full-funnel commerce media strategies. Relying solely on sponsored search limits the potential to reach consumers throughout the customer journey, especially in awareness and consideration stages. A diversified channel mix enables broader audience engagement and deeper measurement capabilities.
AI’s Transformative Role in Commerce Media
Agentic AI Commerce is emerging as a fundamental force reshaping retail media. This form of AI proactively interacts and transacts on behalf of consumers, potentially altering traffic volumes and engagement patterns on retail media platforms. For RMNs, AI brings both opportunities and risks—the capacity for enhanced targeting and personalization contrasts with uncertainties around standards and measurement methodologies.
Strategic adoption requires careful evaluation to harness AI’s benefits without overreliance on narrow success metrics such as return on ad spend (ROAS). Holistic measurement approaches that capture customer lifetime value and brand impact become vital as AI-driven commerce introduces new dynamics in user behavior.
Strategic Imperatives for Retail Media Leaders
Scale remains a key differentiator for RMNs to compete effectively in this evolving environment. Leading players like Amazon illustrate the benefits of expansive, full-funnel demand-side platform (DSP) offerings integrated across retail and off-site channels. Their ability to connect data and inventory across multiple touchpoints presents a blueprint for effective market positioning.
Retail media networks must develop strategies that reflect these changes, including investments in off-site media, AI capabilities, and comprehensive measurement frameworks. This broader approach aligns with market evolution and buyer expectations, ensuring investments deliver value beyond last-click metrics.
Conclusion
The retail media market is entering a new phase that demands strategic adjustment and innovation. As the sector approaches a $200 billion valuation, success hinges on embracing full-funnel approaches, integrating advanced AI capabilities, and adopting measurement practices that capture the entire customer journey. Retail media leaders who respond thoughtfully to these shifts will position themselves to thrive amid evolving consumer and technological landscapes.
