Something fundamental has shifted in the relationship between retailers and the brands that sell through them. For most of retail history, a retailer's job was to sell products and collect a margin. An advertiser's job was to convince consumers to buy those products — mostly through TV, print, and search. Those two ecosystems were largely separate.
That separation is over. Today, your favorite grocery store, pharmacy chain, and big-box retailer are all in the advertising business. They're selling sponsored placements in search results, banner slots on product pages, and ads within email newsletters — monetizing the first-party data they've quietly accumulated from years of loyalty programs and transaction history. The category has a name: retail media. And it is growing at a rate that is reshaping where brand marketing budgets go.
Global retail media is forecast to exceed $200 billion in 2026, with projections putting the market at $312 billion by 2030. In the U.S. alone, the market is expected to reach $69.33 billion this year — a 17.9% increase year over year. To put that in context, retail media is now approaching 18% of all digital advertising spending in the United States.
At a Glance
1. How We Got Here
Retail media isn't new — Amazon has been selling sponsored search placements since 2012. But the category has exploded since 2020, for a few converging reasons.
The deprecation of third-party cookies pushed advertisers to look for channels with cleaner, consented audience data. Retailers — sitting on years of loyalty program data, purchase histories, and browsing behavior — had exactly that. At the same time, the pandemic-era e-commerce surge gave retailers dramatically larger digital footprints to monetize. And as margins in physical retail remained razor-thin, a high-margin advertising revenue stream looked very attractive to CFOs.
The result is that advertising has become a core business line — not a side project — for Walmart, Kroger, Target, Walgreens, Home Depot, CVS, Instacart, and dozens of others. More than 80% of digital advertisers now have a dedicated retail media budget, according to IAB, and three-quarters of U.S. advertisers plan to increase that budget in 2026.
2. The Amazon–Walmart Duopoly (and Everyone Else)
Let's be honest about who's winning. Amazon and Walmart together are expected to capture over 89% of incremental retail media dollars in 2026. Amazon remains the dominant player — its advertising business is growing more than 20% annually and is now one of its most profitable segments. Walmart Connect has surged on the strength of its first-party shopper data and an aggressive push into connected TV advertising, with its advertising business reaching $6.4 billion.
But the budget allocation patterns are revealing. Brands making under $50 million in revenue put 79% of their retail media spend on Amazon. As brands grow larger, they diversify: brands making between $500 million and $1 billion allocate a significantly larger share to Walmart (29%), and brands over $1 billion begin to weight Target meaningfully as well.
The lesson: Amazon dominates for smaller brands largely because it's a known quantity with measurable ROI. As brands scale, the strategic logic of diversification — to reach different shopper segments and avoid over-dependence on a single platform — starts to matter more.
3. The Long Tail: Grocery, Pharmacy, and Specialty Networks
Beyond Amazon and Walmart, there's a growing ecosystem of retail media networks at every tier. Kroger Precision Marketing uses purchase-based audience segments across Kroger's network of grocery banners. Walgreens Advertising Group targets health and wellness audiences with high intent. Instacart Ads connects brands to consumers at the moment of grocery consideration. Home Depot has built out a network for home improvement brands. CVS Media Exchange focuses on healthcare and beauty.
The appeal for brands on these smaller networks is straightforward: lower cost-per-click, less competitive saturation, and audiences that are genuinely in-market for specific categories. If you're selling pet food, a Petco network placement reaches an audience that has self-selected as pet owners in a way that a generic programmatic buy never could.
The average brand today works with six retail media networks, and that number is expected to climb to eleven by 2026 as the category matures. Vendors like Stratacache, Wovenmedia, and Criteo are positioning themselves as cross-network infrastructure layers — helping brands manage, measure, and optimize across fragmented network portfolios.
Enjoying this analysis?
Get Sonny's weekly e-commerce insights delivered to your inbox.
4. Why Retail Media Is Different From Search Advertising
It's tempting to think of retail media as just another form of search advertising — buy a keyword, get a placement. But there are important structural differences that brands are still learning to account for.
The most significant is purchase data as the targeting signal. Google and Meta can tell you a lot about a user's interests and browsing behavior. Retailers can tell you what people actually bought, how often, and what else they bought alongside it. That's a fundamentally different signal — and one that becomes increasingly valuable as brands try to reach proven category buyers rather than people who once searched for a product and moved on.
The measurement story is also different. Retail media platforms can close the loop from ad exposure to purchase within the same ecosystem — meaning retailers can show brands a clean attribution path that Google and Meta struggle to provide in a post-cookie world. That measurability is a major reason for the budget shift.
The complication is that each network operates its own measurement methodology, making cross-network comparison genuinely difficult. Brands often can't compare an Amazon ROAS to a Kroger ROAS on an apples-to-apples basis, which is one reason the vendor layer for cross-network analytics has become a growing business in its own right.
5. What This Means for Shopify Brands
For direct-to-consumer and Shopify brands, the retail media boom creates both pressure and opportunity.
The pressure: if your products sell through retailers who have their own media networks, those retailers will increasingly expect advertising investment as part of the commercial relationship. Trade marketing budgets — historically spent on slotting fees, promotions, and co-op advertising — are being renegotiated to include digital retail media commitments. Brands that don't engage with those networks risk losing organic visibility in favor of competitors who do.
The opportunity: for brands that aren't yet in major retail channels, the proliferation of retail media networks makes it possible to reach highly targeted, in-market audiences at scale without necessarily being stocked by those retailers. Instacart, for instance, allows CPG brands to advertise on its platform regardless of whether they sell directly through it.
The most actionable near-term question for most brands is simple: where are your highest-value customers actually shopping? The networks where those shoppers have first-party relationships are the ones worth investing in — and the data to answer that question is probably sitting in your own analytics already.
$200B+ global market
U.S. retail media hits $69.3B in 2026, approaching 18% of all U.S. digital ad spend.
Amazon + Walmart dominate
The two giants capture 89% of incremental spend — but specialty networks offer lower CPCs and less competition.
First-party purchase data
Retailers can close the loop from ad to purchase in one ecosystem — a measurability advantage Google and Meta can't match.
Brands expanding networks
Brands average 6 retail media networks today. That number is expected to grow to 11 as the category matures.
The retail media boom is, at its core, a story about data asymmetry. Retailers have spent decades accumulating purchase-level behavioral data through loyalty programs, and they're now monetizing it. The irony is that brands often paid for that data indirectly — through the products they sold — and are now buying it back in the form of media placements.
That said, the channel genuinely works. Reaching a shopper at the moment they're already in a purchasing mindset, with an ad informed by their actual purchase history, is more efficient than almost any alternative. The measurement story is cleaner. The intent signals are stronger. The brands doing well in retail media right now are the ones treating it as precision infrastructure, not a spray-and-pray channel.
My reservation is what happens as every retailer builds a network and the fragmentation becomes overwhelming. Managing bids, creative, and measurement across eleven networks simultaneously is not a small task — especially for leaner brand teams. The cross-network tooling layer will matter a great deal, and the brands that invest in it early will have a meaningful advantage over those playing catch-up.
— Sonny
Enjoying this post?
Get Sonny's latest AI & e-commerce analysis in your inbox.
Sources: Adtelligent Retail Media Outlook 2026 · Skai: State of Retail Media 2026 · ALM Corp: Walmart Advertising $6.4B · Path to Purchase: 2026 RMN Ratings
Frequently Asked Questions
Global retail media is forecast to exceed $200 billion in 2026. The U.S. market alone is projected at $69.33 billion — a 17.9% year-over-year increase — and is approaching 18% of all digital advertising spending in the United States. The market is expected to grow to $312 billion globally by 2030.
Amazon and Walmart together are expected to capture over 89% of incremental retail media dollars in 2026. Amazon grows more than 20% annually and remains the dominant player. Walmart Connect reached $6.4 billion in advertising revenue, bolstered by first-party shopper data and a push into connected TV.
A retail media network is an advertising platform run by a retailer that lets brands buy placements within that retailer's digital properties — sponsored search results, product detail page banners, email slots, and in-store digital screens. The retailer monetizes its first-party shopper data by giving brands a direct path to buyers at the point of purchase consideration.
Yes — especially on networks beyond Amazon and Walmart, where competition and CPCs are lower. Brands making under $50M in revenue allocate 79% of retail media budgets to Amazon. Expanding to grocery, pharmacy, and specialty networks can offer cheaper inventory, more targeted audiences, and less competition. The average brand works with 6 retail media networks today; that number is expected to grow to 11 by 2026.