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Arlington, Va. – The FMI—Food Industry Association, NielsenIQ, and Think Blue have released an innovative report, The Evolution of Retail Media: Decoding What Works and What Doesn’t. The report highlights the critical role of Retail Media Networks (RMNs) in today’s fragmented retail landscape and explores how RMNs have evolved beyond traditional advertising channels into strategic growth engines driven by shifting consumer preferences and technological advancements.
Retail media, deeply rooted in the history of commerce, has transformed into a sophisticated ecosystem that leverages data and technology to meet modern consumer expectations for convenience, personalization, and seamless shopping experiences. Today, RMNs encompass various tactics, including paid search, on- and off-site display ads, in-store media, Connected TV (CTV), and social media campaigns, all powered by retailers’ first-party data. These networks are now critical for delivering measurable business outcomes, such as return on ad spend (ROAS), brand awareness, and customer lifetime value.
The report serves as a roadmap for unlocking the full potential of RMNs as the retail media landscape evolves. It ensures that RMNs remain a powerful tool for driving growth, enhancing consumer experiences, and delivering measurable business outcomes in an increasingly competitive market.
Key developments shaping the future of RMNs
The report identifies several key trends driving the rapid growth of RMNs:
- Fragmentation of the consumer path to purchase: As consumers shop across multiple channels—online, in-store, via apps, and through social media—RMNs must adapt to provide seamless, integrated experiences across all touchpoints.
- Omnichannel integration: The blending of physical and digital retail has created new opportunities for retailers to monetize touchpoints and build capabilities that span both realms.
- RMN investment evolution: RMNs have transitioned from being funded primarily by CPG trade budgets to capturing significant portions of endemic and non-endemic media budgets. This shift reflects their growing importance as strategic levers for growth and consumer engagement.
- Data-driven strategies: Advanced analytics and AI are enabling more targeted, personalized, and effective retail media campaigns, while privacy-first solutions like data clean rooms ensure secure data usage.
- Collaborative models: Brands and retailers are forging new partnerships to align investment strategies and integrate RMNs into broader business planning, moving beyond traditional trade and shopper marketing silos.
The report projects that CPG Retail Media spending will soar to $27 billion by 2026, with the grocery channel accounting for $6.6 billion of that total. Non-grocery retailers, led by giants like Amazon and Walmart, are expected to dominate, capturing 75% of RMN investments by 2026. This growth underscores the critical role RMNs play in activating consumer demand and influencing purchasing decisions in an increasingly omnichannel retail environment.
Challenges and opportunities
Despite their rapid growth, RMNs face significant challenges, including fragmentation, lack of standardized metrics, and transparency issues. The report highlights the need for:
- Unified frameworks and standards: Establishing consistent ROI metrics and attribution models to foster trust and comparability across platforms.
- Organizational transformation: Developing cross-functional teams and upskilling talent to navigate the complexities of RMNs.
- Technological innovation: Leveraging AI and advanced analytics to deliver hyper-personalized campaigns and seamless omnichannel experiences.
A call to action for the industry
The report concludes with a call to action for brands, retailers, and agencies to align on critical priorities, including standardizing measurement practices, investing in talent development, and fostering consumer-centric collaboration. “RMNs are no longer just media channels—they are strategic growth engines reshaping the future of retail and media investment,” said a spokesperson for the report’s authors.
Download the full report here: