As e-commerce matures and digital transformation accelerates, retailers are facing a new imperative: how to drive sustainable, high-margin growth in a landscape long dominated by Amazon. While Amazon’s diversified business model—spanning e-commerce, cloud, and advertising—has set the pace, a new opportunity is emerging for retailers of all sizes: retail media networks (RMNs). These platforms are rapidly becoming the most significant profitability lever in digital commerce, offering a path to incremental revenue, deeper customer engagement, and a competitive edge that extends well beyond Amazon’s reach.
Retail media networks have quickly evolved from a niche experiment to a $30 billion industry, outpacing the growth trajectories of both search and social advertising. By 2028, RMNs are projected to account for over 15% of all ad revenue, surpassing even television as a preferred advertising platform. What’s driving this explosive growth? The answer lies in the unique assets retailers possess: rich first-party customer data, high-intent digital traffic, and the ability to influence purchase decisions at the point of sale.
For retailers, the appeal is clear. RMNs deliver advertising revenue at margins of 40-60%—far higher than traditional retail or even most e-commerce sales. Even partial investments in retail media capabilities are generating hundreds of millions in annual revenue for leading retailers. This is not just a new revenue stream; it’s a transformative business model that can fundamentally shift the economics of digital retail.
The COVID-19 pandemic accelerated digital adoption, pushing e-commerce to the forefront of retail strategy. At the same time, Amazon’s continued investment in its advertising platform has demonstrated the power of data-driven, targeted media in driving both revenue and customer loyalty. As Amazon’s leadership transitions and the industry moves beyond the initial shock of the pandemic, retailers are re-evaluating their own digital assets and seeking new ways to compete.
Retailers are uniquely positioned to capitalize on this moment. Unlike pure-play digital platforms, they have decades of transactional data, established loyalty programs, and direct relationships with millions of customers. By leveraging these assets, retailers can offer advertisers unparalleled targeting capabilities—reaching shoppers with relevant offers at the exact moment of purchase consideration.
For retail CMOs, digital strategists, and e-commerce leaders, the path to a successful RMN involves several critical steps:
Retailers sit on a goldmine of first-party data, from purchase histories to loyalty program engagement. The key is to unify this data across channels and use advanced analytics and AI to segment audiences, personalize offers, and deliver measurable results for advertisers. Moving beyond basic segmentation—such as targeting loyalty members solely by spend—toward more nuanced, behavior-based targeting will drive higher engagement and return on ad spend.
A robust RMN should enable both on-site (ads within the retailer’s digital properties) and off-site (ads across the open web, powered by retailer data) campaigns. This omnichannel approach allows brands to reach customers wherever they are in their journey, reinforcing messages and driving conversion. Integrating these experiences with the retailer’s e-commerce platform ensures that advertising is relevant, non-intrusive, and value-adding for the customer.
As privacy regulations evolve and third-party cookies disappear, retailers’ ability to offer privacy-compliant, first-party data targeting becomes a major differentiator. Building trust with customers is paramount—clear communication about data usage and value exchange (such as personalized offers or loyalty rewards) will be essential to maintaining engagement and compliance.
Launching and scaling an RMN requires investment in technology platforms that can manage inventory, optimize campaigns, and provide real-time reporting to advertisers. Many retailers are partnering with technology providers or leveraging modular, cloud-based solutions to accelerate time-to-market and reduce operational complexity.
The most successful RMNs will move beyond “spray and pray” tactics to deliver hyper-personalized, contextually relevant advertising. AI-driven recommendations, dynamic creative optimization, and integration with loyalty programs can create a virtuous cycle of engagement and value for both shoppers and advertisers. Retailers that continually innovate—experimenting with new formats, channels, and data applications—will set themselves apart in a crowded market.
While Amazon remains a formidable player, the RMN opportunity is not limited to digital giants. Grocers, big-box retailers, specialty chains, and even regional players are finding success by leveraging their unique customer relationships and data assets. In grocery, for example, digital transformation has opened new channels for supplier-funded promotions and targeted sampling, helping to offset the traditionally thin margins of online sales. In general merchandise, partnerships with third-party sellers and brands are creating new advertising inventory and revenue streams.
Retailers that act now to build and scale their RMNs will not only unlock new profitability but also strengthen their position as indispensable partners to brands and manufacturers. As the advertising landscape shifts, those who own the customer relationship—and the data that comes with it—will shape the future of commerce.
Retail media networks represent the next frontier in e-commerce profitability—a high-margin, scalable, and defensible revenue stream that leverages retailers’ most valuable asset: their customer relationships. As the industry moves beyond Amazon’s shadow, the retailers who embrace this opportunity will not only drive new growth but also redefine their role in the digital economy. Now is the time to act, innovate, and lead.
Ready to explore how a retail media network can transform your business? Connect with Publicis Sapient’s retail experts to start your journey toward sustainable, data-driven profitability.