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Retail marketers face a turning point: the frenzy around retail media has cooled, and the industry now demands clear proof of impact. Teams must show measurable returns, stretch tighter budgets, and choose when to adopt new technologies like AI. This shift forces a smarter, outcome-driven approach to investment and tactics.
Performance demands reshape retail media investments
Retail media is no longer judged by presence alone. Advertisers now expect channels to deliver measurable business results.
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- Performance first: Many brands are reallocating spend when returns fall short.
- Consolidation matters: Big platforms like Amazon and Walmart still attract heavy investment.
- Rise of niche networks: Smaller retail media outlets captured roughly 25% market share, up from about 16% in 2024.
That shift reflects a desire for both reach and precision. Large retailers offer scale. Smaller networks can target shoppers more narrowly and sometimes boost ROI. Smart teams balance both to avoid wasted spend.
Prioritizing channels to protect and grow marketing budgets
Finance teams are asking tough questions. Marketing leaders must demonstrate efficiency to earn budget increases and defend existing funds.
- Budget expectations: Around 62% of retail marketers anticipate higher budgets this year.
- Efficiency pressure: Nearly 35% of teams are shifting to lower-cost, high-efficiency channels under CFO direction.
Where to focus spend
- Lean into high-performing organic and paid social to maintain visibility with less cash.
- Allocate greater weight to video formats when they drive stronger returns.
- Reduce over-reliance on bottom-funnel tactics that see diminishing returns.
Marketing mix modeling (MMM) can guide reallocations. These tools connect channel spend to business outcomes and support scenario planning when budgets change.
How AI fits into retail media strategies
Marketers are curious about AI but cautious about wholesale adoption in advertising.
- Adoption rate: Only about 21.7% are buying generative AI ads today.
- Practical use: Roughly 61% use AI for planning, ideation, and media strategy.
- Consumer trust: Studies show 30% of Gen Z view AI-made ads as inauthentic, and 24% question the ethics of AI-generated creative.
Testing is the low-risk path. Compare AI-driven media plans and creative against human-led options to measure time, cost, and performance differences.
Human oversight remains essential. Where authenticity and brand trust matter, keep people in the loop when deploying AI for ad creation.
Practical steps retailers can take now
Execution should be disciplined and measurable. Below are tactical moves that help translate strategy into results.
- Prioritize channels by impact: focus on those that move the business needle.
- Use MMM and scenario tools to model budget shifts and external shocks.
- Test AI in planning and measurement first, then in creative if results justify it.
- Shift a portion of spend to video and higher-impact formats.
- Maintain human review to preserve brand authenticity and ethical standards.
Measure constantly. Short feedback loops let teams reallocate quickly when a tactic underperforms.
What success looks like in a maturing retail media market
Winning retailers will combine data-driven rigor with creative agility. They’ll invest where performance is proven and move away from tactics that only look good on paper.
- Focus on verifiable outcomes over vanity metrics.
- Scale investments that show repeatable ROI.
- Keep authenticity front and center when experimenting with AI.
By aligning spend to measurable business goals and applying innovation selectively, marketing teams can make their budgets go further and protect brand trust.
Supported by Keen Decision Systems
