From the rise of connected TV to the untapped potential of in-store media, brands are betting big on retail media. Meanwhile, first-party data and new formats are enabling more personalised and impactful campaigns, making the competition for consumers fiercer than ever. Rajesh Verma, General Manager, Middle East at Epsilon, highlights five trends set to redefine retail media in 2025.
2025 will be the year of differentiation. To stand out in an increasingly crowded market, brands need to stay ahead of the developments shaping retail media, adopting new technologies and strategies to create hyper-personalised journeys for consumers.
Here are five trends to watch:
1. Retail media is no longer limited to on-site and endemic brands
Retailers are quickly realising the benefits of off-site media channels and selling ad inventory to non-endemic brands to reach broader audiences. Both are hugely attractive to brands thanks to the phasing out of third-party cookies (which is gaining momentum despite Google’s u-turn) with retailers’ first-party data becoming an indispensable tool for precision targeting.
But there’s work to do. Only a third of retailers offer off-site programmatic advertising, according to an Epsilon State of Retail Media Report. The rest risk leaving revenue on the table.
Those retailers who can master the art of reliably identifying customers on the open internet, connecting with customers wherever they are, and independent of which device they are using, will have the competitive edge. As will those retailers who can offer a unified retail media solution across on-site and offsite, with clear metrics for both that help brands properly attribute results and the success of their advertising campaigns.
2. We will see more new media formats
Retailers are moving away from traditional advertising formats, instead exploring new ways to engage consumers. Channels such as on-demand streaming services and connected TV are set to dominate due to their ability to deliver relevant and targeted ads to their audiences.
As streaming is becoming viewers’ default preference, connected TV presents an almost untapped but huge opportunity. It vastly increases the off-site advertising inventory and promises greater reach, capturing consumers at different points in their media journey. Plus, acceptance is growing among consumers who are willing to watch ads in return for free content.
3. AI is driving precision and efficiency
We are well aware of how powerful AI is. Applied, in retail media, it allows retailers to make better use of their customer data to deliver personalised and targeted ads, at scale.
In the next 12 months, we will see advertising powered by AI that works in the background in near real-time. Retailers and brands will adopt predictive AI to analyse usage patterns, identify customer intent signals and zoom in on their target audience with a granularity they haven’t achieved before. Meanwhile, Generative AI will enable them to create personalised ads much faster, which can be used to reach the right customers at the right time.
4. Brands are monetising physical retail spaces
Retailers are finding new ways to monetise physical retail media, such as digital screens in brick-and-mortar stores. Interestingly, for many retailers, in-store audiences can now rival or actually exceed online visitors. Brands will be eager to capitalise on this in-store foot traffic. The challenge lies in delivering personalised content to individual customers – for example leveraging data from loyalty programs - and doing so with precision and scalability.
Retailers will need to understand how to make the connection between what they know about their customer and their location in real-time, joining the dots on the entire online and offline customer journey. They will also need to be able to analyse their data to close the loop on how in-store and online advertising have affected online and offline sales.
5. Brands are outsourcing some of the retail media work
As retail media becomes more sophisticated, brands are increasingly turning to external specialists to help them understand and tap into its true power.
Large retailers are partnering with full-service agencies that can supply the retail media technology as well as the plethora of services surrounding it. We have seen this recently with Alshaya Group which recently joined forces with media agencies and technology partners to launch an omnichannel retail media network that will allow advertisers to run targeted on-site and off-site campaigns at scale. Of course, every retailer will have different needs. For some brands, tapping into Retail Media-as-a-Service will be an interesting strategy alongside developing their own in-house resources.
What’s clear from these trends is that retail media is evolving fast, and brands that truly understand the driving forces behind retail media’s growth will have the upper hand in 2025.
It’s no longer just about traditional ad spend. It’s about embracing new means of engagement to connect with consumers in more meaningful, and timely, ways. In doing so, brands will be better positioned to win over new customers, maintain loyalty, and drive sustainable growth.
