The grocery sector is experiencing a profound transformation, driven by the convergence of digital innovation, evolving consumer expectations, and the relentless pursuit of profitability. Among the most significant developments reshaping the industry is the rapid rise of Retail Media Networks (RMNs). For grocers, RMNs represent a powerful new business model—one that leverages first-party data to unlock high-margin revenue streams by offering targeted advertising opportunities to consumer packaged goods (CPG) partners. This page explores how grocers are building and scaling RMNs, the technology and best practices enabling success, and the impact on both shopper experience and supplier relationships.
Retail Media Networks are digital advertising platforms operated by retailers, allowing brands to reach shoppers with targeted ads across the retailer’s owned channels—websites, mobile apps, emails, and increasingly, in-store digital displays. In grocery, the value proposition is especially compelling: grocers possess rich, high-frequency first-party data on shopper behavior, preferences, and purchase history. By activating this data, they can offer CPG partners unprecedented precision in reaching the right customer, at the right moment, with the right message.
The timing is critical. As e-commerce penetration in grocery has surged from 2-3% to 12-15% of sales in just a few years, grocers have faced mounting pressure to improve digital profitability. Traditional online grocery models are challenged by high fulfillment costs and thin margins. RMNs, by contrast, deliver high-margin, incremental revenue—often generating $100 million or more annually for leading grocers, with the potential to scale to billion-dollar business lines.
The foundation of a successful RMN is the ability to harness and activate first-party data. Grocers collect vast amounts of information through loyalty programs, online and in-store transactions, and digital engagement. By unifying this data into a single customer view, they can offer CPG partners highly granular audience segments—enabling personalized, contextually relevant advertising that drives both brand engagement and sales.
Modern RMNs extend beyond digital banners on e-commerce sites. Leading grocers are integrating advertising across the full shopper journey:
This omnichannel approach maximizes reach and relevance, allowing CPGs to influence shoppers at every stage of the path to purchase.
To scale RMN operations and attract a broad base of advertisers, grocers are investing in self-service platforms that allow CPG partners to plan, execute, and measure campaigns with ease. Programmatic buying capabilities, real-time reporting, and transparent attribution are now table stakes. This not only streamlines operations but also democratizes access, enabling both large and emerging brands to participate.
The backbone of a high-performing RMN is a robust technology stack. Grocers are modernizing their IT architectures—moving to cloud-based, API-driven platforms that support real-time data integration, audience segmentation, and campaign optimization. Advanced analytics and AI are used to refine targeting, personalize offers, and measure incremental sales lift. Integration with customer data platforms (CDPs) ensures that insights are actionable and privacy-compliant.
When executed thoughtfully, RMNs can enhance—not disrupt—the shopper journey. Personalized offers, relevant product recommendations, and timely promotions add value for customers, making discovery more engaging and convenient. For example, AI-driven engines can suggest complementary products based on basket contents or past purchases, or deliver digital samples and exclusive deals that surprise and delight.
For CPG partners, RMNs offer a direct line to high-intent shoppers, with the ability to measure outcomes in real time. This transparency fosters deeper collaboration between grocers and suppliers, shifting the relationship from transactional to strategic. CPGs can co-create campaigns, test new product launches, and optimize assortments based on granular shopper insights—driving mutual growth.
The financial impact is clear: RMNs deliver high-margin, incremental revenue that can offset the costs of digital transformation and fulfillment. Leading grocers have reported annual media revenues in the hundreds of millions, with some on track to build billion-dollar advertising businesses. This new income stream is critical for sustaining investment in technology, supply chain modernization, and customer experience.
As the grocery sector continues to evolve, RMNs will play an increasingly central role in the business model. The winners will be those who:
With the right strategy and technology partner, grocers can not only monetize their data but also create richer, more relevant experiences for shoppers and suppliers alike. Retail Media Networks are not just a trend—they are a cornerstone of the future grocery ecosystem.
Ready to unlock the full potential of your first-party data and build a high-impact Retail Media Network? Connect with Publicis Sapient to start your transformation journey.