Retail Media, Explained: What It Is, Why Everyone's Building One, and Whether You Should Buy In

Retail media is advertising sold by retailers against their own first-party data on what shoppers actually buy — the fastest-growing part of global advertising, because it ties ad spend directly to sales. Here's how it works and how to use it.

You've seen it without naming it: the 'sponsored' products at the top of an Amazon search, the featured brand in a supermarket app, the banner on a retailer's website. That's retail media — and it has quietly become one of the most important shifts in advertising this decade. The recent $17bn DoorDash-Instacart deal and Asda's tie-up with Amazon's ad engine are both, at heart, retail-media stories.

What retail media actually is

A retail media network is the advertising business a retailer builds on top of its shop. Because the retailer knows exactly what its customers browse and buy, it can sell brands the ability to reach those customers at the precise moment of purchase — on its site, in its app, in store, and increasingly across the wider web using that same purchase data. It's advertising sold by the shop, powered by the shop's own data.

Why it's exploding

Three forces converged. First, the death of the third-party cookie made advertisers hungry for reliable first-party data — and retailers are sitting on the best there is: real transactions. Second, retail is a low-margin business, and advertising is extremely high-margin, so every retailer with traffic wants in. Third, retail media closes the loop advertisers have chased forever: it can connect an ad impression to an actual sale, which is marketing's holy grail. When you can prove spend drove revenue, budgets follow.

Should your business buy in?

If you sell physical products through retailers or marketplaces, almost certainly yes — retail media puts you in front of people who are already shopping your category, with conversion you can measure. Start small and specific: pick one platform where your customers already buy, run sponsored placements on your best-converting products, and judge it on return on ad spend, not vanity reach. The data you get back — what people search, what they buy alongside you — is often worth as much as the sales.

If you're a service business or sell direct, the lesson is different but just as valuable: you are sitting on your own first-party purchase data, and that's the exact asset making retailers rich. You may not launch an 'ad network', but using what you know about your customers to personalise, cross-sell and retarget is the same principle at your scale.

Quick FAQ

How is retail media different from normal digital advertising?

It's built on a retailer's own first-party purchase data and sits close to the point of sale, so it targets people actively shopping and can link spend directly to transactions — something open-web advertising struggles to prove.

Is retail media only for big brands?

No. Most networks have self-serve tools where a small brand can sponsor a single product with a modest budget. Start narrow, measure return on ad spend, and scale only what works.

Retail media is the quiet revolution most small businesses are sleeping through. The giants worked out that their customer data is worth more than their shelves — and they're right. You don't need to build Amazon's ad network. You just need to stop treating your own customer data as admin, and start treating it as the asset it is. — Daniel Nikolla, Founder of Merx Marketing

Retail media proved that knowing what customers buy is worth more than what you sell them. That asset isn't just for Amazon — you have a version of it too.

Are you using what you already know about your customers to grow — or letting that data gather dust?

If you would like to know more about this topic, please contact us on danieln@merxmarketing.co.uk

Sources: Marketing Minute analysis, with reference to industry reporting on retail media growth.

Written by Daniel Nikolla, Founder of Merx Marketing Ltd and Marketing Minute