[eMarketer] Retail media networks hit their stride in 2021

2021 was the year that marketers fully embraced retail media networks—and the year that retailers fully embraced their role as advertising platforms.

For retailers, media networks function mainly as an additional revenue source, but they have other benefits.

Retail margins have historically been small, and they’re getting smaller thanks to inflation and rising logistics costs. With retailers finding themselves increasingly squeezed by Amazon’s low prices and free shipping, having an alternative revenue source enables them to compete on price and keep customers coming back.

Retailers also have access to lots of first-party customer data and valuable insights about how people shop. For example, a consumer packaged goods (CPG) brand that chooses to spend with Target would be able to reach customers where they are and identify people with purchase intent—and also potentially guarantee better product placements within the store or on the retailer’s ecommerce platform.

While Amazon still dominates with 77.7% of US digital retail media spend, companies like Walmart and Instacart are emerging as media networks to watch.

By 2023, eMarketer predicts that retail media will exceed $50 billion and receive nearly 20% of all digital ad spend. It further anticipates digital retail media advertising will jump by 31.4% in 2022 to $41.37 billion, marking it out as one of the digital ad segments with the highest growth.

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