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Navigating Retail Media’s Plateau: Winning Strategies for 2025
SUMMARY
Uncover why retail media’s growth is cooling in 2025 and how to rethink your strategy for maximum impact.
Rachel Horner
Rachel Horner serves as a Content Marketing Writer for Feedvisor. She has extensive experience in writing for diverse B2B brands, particularly in the tech industry, and is dedicated to fostering meaningful brand-audience connections.
Retail media has reached a tipping point. What began as a way to capture consumer attention through sponsored search and display ads has become a cornerstone of digital advertising. Originally rising to prominence by seamlessly integrating ads into on-site experiences, retail media has since evolved into digital’s fastest-growing channel, fueled by businesses adapting to signal loss and doubling down on performance marketing.
Yet, all good things must come to an end. Retail media’s growth is expected to cool this year, with ad spending projected to rise 10.6% in 2025—a three-point drop from 2024—as trade budgets tighten. At the same time, leading players are leveraging their vast first-party data to expand their influence beyond their own platforms, helping businesses target consumers on emerging channels like TikTok and within the rapidly growing connected TV space.
What does this mean for the future of retail media? How can you stay ahead of the curve? We explore the forces driving these changes and how to adapt your strategy to stay competitive.
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The Future of Retail Media
As retail media moves beyond its rapid growth phase, 2025 will mark a shift from spending more to spending smarter. Businesses are recalibrating their strategies to maximize impact, focusing on profitability rather than just expansion. With economic uncertainty persisting, ad budgets are tightening, and the emphasis is now on consolidating retail media networks (RMNs) to ensure every dollar spent translates into actual sales while minimizing wasted spend.
Retail media’s projected $60 billion in ad spend was built on the assumption of unlimited demand. Now, as retailers reassess their available ad inventory, some are confronting a stark reality—growth expectations are increasingly uncertain. Advertisers are becoming more selective, prioritizing streamlined partnerships over spreading budgets too thin.
In this new landscape, businesses will take a more strategic approach to selecting RMNs, fine-tuning their investments to maximize returns and ensure every advertising dollar delivers measurable impact.
To do so, they will need these questions to be answered:
Is there flexibility in budget allocation and optimization?
RMNs must enable flexible budget management. The ability to reallocate spend across campaigns and platforms based on real-time performance data will be essential to maintaining efficiency and responsiveness.
How well does the RMN support full-funnel growth?
Retail media networks that can handle the full customer journey—from awareness to conversion—will be in high demand. Businesses will prioritize platforms that drive both short-term sales and long-term brand health by supporting full-funnel strategies.
How does the RMN drive incrementality?
RMNs must prove incremental value by showcasing how mid and upper funnel investments contribute to overall growth. This transparency will be critical to justifying ad spend and ensuring dollars aren’t wasted on low-impact initiatives.
Not all retail media networks are equally equipped to tackle these challenges. As retail media matures, the emphasis will increasingly shift from rapid expansion to strategic optimization. Businesses will demand networks that not only support efficiency and flexibility but also demonstrate their ability to drive incremental value in a competitive and evolving commerce media landscape.
Despite retail media investments slowing down, dominant players like Amazon and Walmart have solidified their positions, with Amazon operating at a scale that sets it apart from the rest. These industry leaders have the resources to hire top talent, develop proprietary ad technology, and acquire media assets that strengthen their upper-funnel capabilities, further widening the gap between the most sophisticated RMNs and those struggling to keep pace.
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Key Strategies for Maximizing Retail Media ROI
As retail media evolves, it is critical to move beyond traditional ad placements and adopt a more holistic approach to maximize their returns. The most successful advertisers are integrating paid, organic, and community-driven strategies, leveraging first-party data, and prioritizing seamless shopping experiences. Here’s how to implement a new approach to retail media and drive greater impact:
1. Integrate Retail Media with Organic and Community-Driven Strategies
While retail media networks initially focused on sponsored search and display ads, the evolving landscape now emphasizes blending paid strategies with organic and community-driven content to foster authentic engagement and stronger brand connections.
2. Leverage First-Party Data for Cross-Platform Targeting
Leading businesses are harnessing vast stores of first-party data from retail media networks to strategically target audiences across emerging platforms like TikTok, creating precise, personalized advertising that aligns with rapidly spreading trends.
3. Create a Seamless Multi-Channel Shopping Journey
Retail media networks enable retailers and advertisers to deliver a cohesive shopping experience by connecting social media interactions with online purchasing, guiding consumers from discovery to conversion with personalized offers and content.
4. Capitalize on Creator Partnerships for Engagement
Businesses can increase reach and relevance by collaborating with creators whose content drives product discovery on high-engagement platforms like TikTok, where user-driven trends have significant influence on purchasing decisions.
5. Prioritize High-Engagement Platforms for Improved ROI
To maximize returns, businesses should focus on platforms that offer high user interaction and community-based engagement, using targeted retail media campaigns to enhance visibility and capture consumer attention where it matters most.
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Final Thoughts
Retail media is at a crossroads, facing a slowdown after years of rapid growth. But with change comes opportunity. As businesses adapt to tighter budgets and shifting consumer behaviors, those willing to rethink their strategies will come out on top. The key is to evolve with the landscape—leveraging first-party data, embracing cross-platform integration, and focusing on high-impact channels.
To help you stay ahead of the curve, we dive into these shifts—and other key e-commerce trends—in our E-Commerce Trends and Predictions Report for 2025. Download it now for expert insights and strategies you need to keep your brand at the forefront of e-commerce.
