RETAIL MEDIA: THE FUTURE OF DIGITAL RETAIL MARKETING

Many still think of Retail Media as just a nice add-on. In reality, it has become a crucial revenue driver and is now attracting more ad budgets than traditional TV advertising. But what exactly is behind the term? Why is retail media so important in e-commerce? What role does adtech play, and what do these ad formats look like?

This article provides a concise overview.

WHAT IS RETAIL MEDIA?

Retail Media refers to the strategic placement of advertising directly on a retailer's digital platforms, such as their online shops or apps. Brands benefit from being present exactly where potential customers already show high purchase intent. Retail media leverages proximity to the point of sale, allowing for a direct influence on purchase decisions. This channel is particularly effective because the advertising is not only visible but closely tied to product searches and the shopping process.

Onsite vs. Offsite Retail Media

Retail media can be broadly divided into two areas: onsite and offsite. Both leverage the first-party data from retail platforms but differ significantly in placement and advertising goals. While onsite strategies occur directly within the digital shop environment, offsite campaigns reach consumers through external channels based on their previous behavior in the shop.

Onsite retail media includes all ad placements that appear directly on the retailer’s website or app, such as sponsored product placements, banners on category or search result pages, or personalized recommendations. These ads target consumers at a moment of high buying intent: they are already browsing the shop, searching for products, or comparing offers. Onsite retail media aims to increase visibility for brands or products at exactly these key decision-making moments and drive direct conversions.

Offsite retail media, by contrast, takes place outside the retailer’s platform, for example, via display ads, video ads, or social media placements. These ads are not shown randomly; they are based on user data and interests previously collected in the shop. For instance, past visitors can be reminded of products they viewed on other websites or apps, or shown relevant alternatives. Offsite campaigns extend the reach and impact of the shop beyond its own environment, meeting potential buyers wherever they are online.

WHY IS RETAIL MEDIA IMPORTANT FOR E-COMMERCE?

Retail media offers online retailers a way to unlock new revenue streams without negatively impacting the user experience. In fact, relevant product recommendations or promotions can even enhance the shopping experience. For brands, retail media is especially valuable because it allows them to advertise exactly where consumers are making purchase decisions.

By being embedded into the customer journey, retail media also enables excellent attribution opportunities. It allows for precise tracking of which ad led to which sale and which combination of creatives, audiences, and placements delivers the highest ROI. Compared to many other digital channels, Retail Media offers significantly more effective performance measurement for e-commerce.

You can find a comprehensive case study from TAKKO on retail media HERE.

Retail Media in the Adtech World

In recent years, retail media has emerged as one of the fastest-growing channels in the adtech space. For companies in this sector, this means new opportunities, but also technical challenges. A key factor is the use of retail data, particularly first-party data from retailers, which provides insight into user behavior and interests.

Adtech platforms integrate technically with retail systems, for example, via server-side interfaces (APIs) that allow access to inventory, user data, and transaction data. This creates a programmatic ecosystem where campaigns can be delivered and optimized in real time. Targeting is based on unique user IDs, generated via login data, ID solutions, or other identifiers. Various targeting technologies, especially ID-based targeting, enable precise user engagement even without classic third-party cookies.

Technological Infrastructure and First-Party Targeting

The foundation of successful retail media lies in a stable adtech infrastructure that connects programmatic buying, data processing, and dynamic ad delivery. Adtech platforms must be capable of handling large data volumes in real time, both on the retailer and advertiser sides.

A key to success is precise targeting using first-party data. These are generated through login information, purchase histories, or product searches and can be used in compliance with GDPR. Adtech providers play a crucial role here by integrating this data into their DSPs (Demand Side Platforms) and enriching it with additional data sources (e.g., from Data Clean Rooms). Data activation is then executed via unique IDs or hash-based identifiers that enable cross-device tracking.

Additionally, Data Management Platforms (DMPs) or Customer Data Platforms (CDPs) are used to segment audiences, build lookalike audiences, or apply frequency capping. Machine learning and algorithmic optimization adjust ad delivery in real time to maximize performance.

Benefits for Consumers

Retail Media offers a number of benefits for consumers in the digital advertising space — especially compared to traditional online advertising. The major difference is relevance: Retail Media is based on real shopping data and user behavior within the shop environment. This means consumers mainly see products that match their current interests, whether directly on a product detail page (onsite) or outside the shop on external websites and social media platforms (offsite).

While onsite ads generate buying impulses at moments of high purchase intent, offsite ads extend this effect and accompany consumers along their digital journey, without appearing random or intrusive. The result: advertising is perceived as a helpful part of the customer journey, not as a disruptive interruption. Consumers benefit from personalized recommendations, better deals, and shorter decision-making paths. At the same time, they retain control, as Retail Media is not about aggressive persuasion but about relevant support. For many, this leads to a more relaxed, efficient, and informed shopping experience.

The Future of Retail Media

Retail Media is on a clear growth trajectory and is becoming an integral part of modern marketing strategies. Driven by the ongoing digitization of physical retail and the increasing number of retail media platforms opening up to external advertising, a dynamic and increasingly professional ecosystem is emerging.

More and more retailers are investing in their own adtech infrastructures or partnering with specialized technology providers to efficiently and programmatically monetize their inventory. At the same time, Retail Media is gaining importance as part of holistic multi-channel strategies, serving as a bridge between online and offline touchpoints.

Thanks to strong data foundations, close proximity to the purchase moment, and technological innovations such as in-store retargeting or dynamic DOOH advertising, Retail Media offers significant added value for both brands and retailers. It enables precise attribution, improves ROI, and creates relevant customer experiences throughout the entire journey.

In short: retail media is more than an add-on. It’s a forward-looking channel that will help shape digital value creation in the long term.

Curious to see what more Retail Media campaigns could look like?

Explore examples from brands like TCHIBO, Kaufland, or Sephora!