Global Retail Media Market Approaches $200 Billion Milestone as Growth Decelerates, Raising Industry Concerns
The global retail media landscape continues its upward trajectory, with ad investments projected to surpass $200 billion this year and reach $223 billion by 2027, according to WARC Media. However, the pace of growth is slowing, approaching single-digit figures, which raises questions about the sustainability of current expansion strategies and the potential impact on consumer experience.
When excluding industry leader Amazon, retail media growth is expected to dip to 9.8% in 2027—the lowest annual growth rate since WARC Media began tracking this market. This slowdown underscores the need for brands and retailers to innovate and adapt to a more mature, consolidated landscape.
Industry Expert Insights
Alex Brownsell, Head of Content at WARC Media, emphasizes: “The retail media landscape is maturing and consolidating, forcing marketers to rethink their approach. While retail media excels at converting existing demand, it underperforms on long-term brand building. Retailers face a delicate balancing act: growing ad revenue to boost margins without overwhelming shoppers with too many ad interruptions that compromise both shopper experience and campaign effectiveness. Success now depends on smart integration with other channels and finding the optimal path to sustainable results.”
Market Trends and Forecasts
Forecasts indicate that global retail media ad spend will reach $200.4 billion in 2026, growing by 11.5% in 2027 to $223.4 billion, representing 15.2% of total worldwide ad spend. However, the growth trajectory is uneven; excluding Amazon, the market is expected to grow at just 9.8% in 2027—a significant slowdown.
Regional Perspectives
While European retail media growth is decelerating into single digits, the US market demonstrates resilience. WARC Media projects US retail media spend will grow 13.6% in 2028, reaching nearly $75 billion. Yet, dominance remains concentrated: in 2025, Amazon accounted for 78% of US retail media expenditure, with Walmart capturing just 7.5%, according to Walrus Intelligence. Across Europe, Amazon’s share exceeds two-thirds in countries like France, Germany, Italy, Spain, and the UK.
Brand Investment and Creative Challenges
Retail media continues to dominate advertising budgets within the consumer packaged goods (CPG) sector, with estimates suggesting it will represent over half of digital ad budgets for categories like alcoholic drinks (55.8%) and food (54.9%) by 2027. Yet, categories like technology and electronics see retail media capturing only 15% of total spend—down from 16.2% in 2025.
Many retail media networks are over-reliant on a small pool of advertisers. Nearly 74% of UK brands spend with three or fewer retail media networks, highlighting a potential vulnerability in diversification and revenue streams.
Beyond retail, Amazon’s non-retail advertising efforts—spanning Prime Video and Twitch—are projected to generate $6.7 billion in 2027, surpassing Walmart’s total ad spend in 2025. This positions Amazon as a dominant force in the evolving commerce media ecosystem, second only to China’s largest players.
Emerging Opportunities and Risks
Video on demand (VOD) is poised to overtake retail media’s global ad spend by 2028, with connected TV (CTV) already accounting for 23% of retail media investments. Walmart’s recent acquisition of Vibe.co signals a strategic move to attract smaller brands into CTV and other digital channels, opening new avenues for retail media networks to diversify.
However, industry insiders warn of the risks associated with ‘enshittification,’ a term popularized by tech author Cory Doctorow, describing how digital platforms degrade as they prioritize monetization over user experience. As consumer spending tightens, some platforms may increase ad loads—Amazon, The Home Depot, Macy’s, and Walmart each serve over 20 ads per page on average—potentially damaging brand perception and shopper engagement.
To mitigate this, brands are encouraged to focus on frictionless, relevant, and engaging consumer experiences. Building better measurement systems and leveraging AI with deep consumer insights can help maintain quality and relevance.
Creative Challenges in Retail Media
Retail media creative must work harder than ever to resonate with audiences. Ipsos research reveals that memory encoding for ads on retailer platforms drops by 47% compared to generic off-site environments. For undecided shoppers, high-quality creative drives a 12% increase in short-term brand choice, while superior creative quality yields a 21% advantage among those not actively shopping.
Despite the potential, retail in-store advertising remains underdeveloped. Over half of US grocery buyers (62%) have purchased a product directly after seeing it on an in-store screen, yet many campaigns lack the creative depth needed to capitalize on this opportunity.
Furthermore, industry analysis indicates that retail media is more effective at converting existing demand rather than building long-term brand equity. Addressing creative shortcomings—particularly through innovative partnerships with creators and integrated physical-digital campaigns—may hold the key to unlocking retail media’s full potential.
Credit: WARC
