Top 5 Predictions and Forecasts for Retail Media in 2025

Retail media continues to evolve at a breathtaking pace, reshaping how brands connect with consumers and how retailers monetize their platforms. As we look ahead to 2025, several key trends and innovations are poised to define the retail media landscape. Here are the top five predictions for retail media in the coming year:

1. The Integration of AI-Driven Personalization

Generative AI has already made waves in retail media, but 2025 will see it reach new heights. Retailers and brands will leverage AI tools to deliver hyper-personalized shopping experiences, both on and off retail platforms. These advancements will allow for real-time personalization based on individual shopper behavior, preferences, and historical data.

• Dynamic Product Recommendations: AI will generate tailored product suggestions that update dynamically as consumers interact with ads or retailer sites. A report from McKinsey notes that personalization can drive a 10-15% increase in revenue for companies that implement it effectively.

• Creative Optimization: Generative AI tools will produce ad creatives that align with the preferences of specific audience segments, boosting engagement and conversion rates. Case studies from early adopters have shown a 20% improvement in click-through rates using AI-optimized creatives.

• Smarter Audience Segmentation: AI will refine audience segmentation by analyzing more granular data points, enabling brands to target niche customer groups effectively. For instance, a Forrester study found that AI-driven segmentation can improve targeting accuracy by 30%.

Brands that invest in AI-driven retail media strategies will gain a competitive edge, achieving higher ROI and fostering deeper customer relationships.

2. The Expansion of Retailer-Owned Media Networks

The rise of retailer media networks (RMNs) will continue unabated in 2025, with more retailers launching their own platforms. However, we’ll see significant innovation in how these networks operate and collaborate with brands.

• Partnerships with Streaming Platforms: Retailers will deepen their integration with streaming TV advertising, allowing for seamless connections between viewing habits and shopping behaviors. According to eMarketer, U.S. connected TV ad spending is expected to reach $27 billion in 2025, highlighting the growth potential in this area.

• Omnichannel Attribution Models: Retail media networks will refine their attribution models to measure the impact of ads across online, in-store, and third-party platforms. This addresses a long-standing challenge of proving ROI in retail media, with Nielsen estimating that better attribution can improve ad efficiency by up to 25%.

• Expanded Offerings: Smaller and niche retailers will enter the space, offering competitive options for brands looking to diversify their advertising efforts. As of 2023, over 75% of top retailers have launched or expanded their media networks, and this trend shows no signs of slowing down.

For brands, this expansion means more opportunities to access retailer-first party data and craft campaigns tailored to their unique customer base.

3. The Convergence of Retail Media and Social Commerce

Retail media will increasingly intersect with social commerce in 2025, blending the boundaries between shopping and social interactions. This trend will be fueled by:

• Shoppable Livestreams: Retailers and brands will use livestreaming to showcase products, answer questions in real-time, and provide instant purchasing options. In China, livestream commerce is already a $423 billion market, and similar growth is expected in the U.S. by 2025.

• Influencer Partnerships: Retail media will integrate affiliate and influencer marketing programs more deeply, allowing influencers to create content that drives traffic directly to retailer platforms. A recent survey revealed that 61% of consumers trust influencer recommendations, making this a valuable tactic.

• Seamless Shopping Experiences: Social platforms will evolve their native shopping capabilities, enabling users to purchase directly without leaving the app. Retailers will tap into these tools to reach younger, socially engaged audiences, with Gen Z leading the charge.

This convergence will challenge brands to adopt a more integrated approach, blending their retail media, social media, and eCommerce strategies for maximum impact.

4. The Rise of Sustainability as a Retail Media Differentiator

Consumers are increasingly prioritizing sustainability, and in 2025, this trend will permeate retail media strategies. Brands and retailers that align with sustainability values will attract more conscious shoppers and differentiate themselves in a crowded marketplace.

• Eco-Friendly Ad Campaigns: Retail media platforms will highlight products with sustainability certifications or eco-friendly attributes in their advertising. Research from NielsenIQ shows that products marketed as sustainable grew 2.7x faster than their conventional counterparts.

• Carbon-Neutral Advertising: Retailers will adopt carbon offset programs for their media networks, promoting them as a greener option for brands. A 2022 study found that 68% of consumers prefer brands that actively reduce their carbon footprint.

• Transparency in Supply Chains: Ads will emphasize supply chain transparency, showcasing how products are sourced and manufactured responsibly. This aligns with growing consumer demand for ethical practices, as reported by Deloitte’s 2023 Global Consumer Survey.

Sustainability-focused retail media campaigns will resonate with environmentally conscious consumers, fostering loyalty and driving sales.

5. The Growth of First-Party Data and Privacy-Centric Advertising

With the continued phasing out of third-party cookies, first-party data will solidify its position as the cornerstone of retail media. In 2025, retailers and brands will double down on strategies that prioritize data privacy while still delivering effective advertising.

• Enhanced Loyalty Programs: Retailers will enhance loyalty programs to collect richer first-party data, offering personalized discounts, exclusive offers, and tailored content in exchange. Data from Accenture shows that 91% of consumers are more likely to shop with brands that provide relevant offers and recommendations.

• Contextual Targeting: Privacy-compliant contextual targeting will gain traction, allowing brands to deliver relevant ads without relying on invasive tracking methods. This approach is expected to grow as a preferred tactic, with the global contextual advertising market projected to reach $335 billion by 2026.

• Secure Data Sharing: Retailers and brands will adopt advanced technologies like clean rooms for secure data collaboration, ensuring privacy while enabling effective targeting. These technologies are predicted to become a $15 billion market by 2025, according to IDC.

As consumers become more aware of data privacy, these approaches will build trust and maintain the effectiveness of retail media campaigns.

Bonus 6th. The Emergence of Digital Out-of-Home (DOOH) in In-Store Advertising

Digital out-of-home (DOOH) advertising has traditionally been associated with billboards and urban displays, but 2025 will see its transformative application in physical retail spaces. This trend will enhance in-store shopping experiences and drive engagement at the point of purchase. Key developments include:

• Interactive Store Displays: Retailers will implement DOOH screens equipped with touch or motion-sensing technology, enabling shoppers to explore product details, check stock availability, or browse related items on demand. Studies show that interactive in-store displays can increase dwell time by up to 30%.

• Real-Time Promotions: Advanced data integration will allow DOOH ads to display tailored promotions based on time of day, inventory levels, or local shopper demographics. For example, a grocery store might use digital signage to promote specific snacks during peak evening hours.

• Integration with Mobile Experiences: QR codes and NFC technology on DOOH screens will bridge the gap between physical and digital shopping. Shoppers can instantly access online reviews, tutorials, or product pages, creating a seamless omnichannel experience.

• Personalization Through AI: AI-driven insights will power DOOH content, dynamically adjusting messages to align with in-store traffic patterns and customer behavior. This personalization can boost sales conversions by presenting the right message at the right time.

DOOH in-store advertising will offer brands a unique opportunity to connect with shoppers at the most critical moment—when purchase decisions are being made. As retailers continue to invest in innovative in-store technologies, DOOH will become an integral part of the retail media mix.

Preparing for the Future

The retail media landscape in 2025 will be characterized by innovation, integration, and a strong focus on consumer-centric strategies. Brands and retailers that stay ahead of these trends will be well-positioned to thrive in an increasingly competitive environment. By investing in AI-driven tools, embracing sustainability, leveraging first-party data, and exploring new collaboration opportunities, they can unlock the full potential of retail media.

Are you ready for 2025? Start planning your retail media strategy now to stay ahead of the curve!