How Grocers Are Becoming Media Powerhouses: The Rise of Retail Media Partnerships

The convergence of generative AI, evolving consumer habits, and widespread digital transformation strategies is driving traditional grocers to become media owners and sellers. Historically, the grocery industry has experienced slow and steady growth, averaging a 2.7% year-over-year sales increase. However, in 2020, sales surged to 9.5%, primarily due to the rapid expansion of digital sales. A study by Grocery Doppio forecasts that by 2025, digital sales will account for 13.6% of all grocery sales. This aligns with findings from FMI and NielsenIQ, which reveal that 90% of U.S. consumers now engage in omnichannel shopping.

Recognizing this shift, traditional grocers are moving beyond the fragmented digitalization efforts of the past and strategically investing in technology modernization. As omnichannel shopping becomes the norm, allowing consumers to interact across multiple touchpoints, grocers are leveraging their e-commerce platforms to drive digital engagement. According to Grocery Doppio, omnichannel shoppers spend 1.5 times more than single-channel shoppers, with an average profit margin of 25.6%.

In response to this trend, grocers are prioritizing their data infrastructure. Approximately 58% are focused on enhancing customer data and insights, while 83% are upgrading backend technology. The phasing out of third-party cookies has further intensified this shift, with 93% of marketing executives identifying first-party data as a critical driver of media monetization. By 2024, 88% of grocery C-suite executives had identified media monetization as a top priority, accelerating retail media investments in 2023 and 2024.

Grocery Retail Media Networks (RMNs) have played a pivotal role in transforming grocers into media powerhouses, significantly contributing to their revenue streams. A prime example is Amazon, which reported an 18% year-over-year surge in advertising revenue in 2024, as per its full-year earnings report. While Amazon pioneered the retail media concept in 2012, the grocery retail media ecosystem has expanded rapidly, with the digital retail media market projected to reach $8.5 billion in 2024, according to Grocery Doppio.

Initially, many grocers sought to build in-house RMNs with 63% opting for self-built solutions in 2022. However, by 2024, the landscape had shifted, with 97% of grocers turning to white-label or third-party retail media solutions to accelerate time-to-market, streamline development, and optimize performance.

Retail Media Unpacked

Retail media is seamlessly integrated into the shopping experience. If you've ever seen a snack advertisement on a store aisle or digital ads at the top of a Walmart search page, you've encountered retail media in action. For retailers, RMNs provide an opportunity to monetize their digital platforms by generating ad revenue. Meanwhile, brands benefit by expanding their customer reach and targeting ads to relevant audiences.

Retail media enables precise targeting by delivering personalized messages at critical moments in the shopping journey. This creates a win-win scenario: retailers unlock new revenue streams, brands gain real-time insights into consumer behavior, and RMNs facilitate advertising transactions while earning a commission. Because ad impressions and sales occur within the retail ecosystem, the impact of advertisements on conversion rates can be directly measured. This allows brands and retailers to refine their advertising strategies for maximum effectiveness.

To better understand the retail media landscape, refer to our previous pieces: Mastering Retail Media Networks and 6 Advantages of Retail Media Networks: Unveiling New Opportunities for Brands and Retailers.

Retail media networks encompass multiple components, including on-site advertising, in-store digital advertising, off-site programmatic advertising, personalized targeting, cross-platform advertising, shoppable ads, interactive media, and in-store displays. According to Mimbi, there are over 200 retail media networks worldwide.

As we look deeper into the evolution of retail media in 2025, Walmart and Amazon dominate, accounting for 84% of total retail media spending. However, other players are also making strides in this fast-growing space. Although RMNs are relatively new to the marketing ecosystem, they continue to capture a growing share of global ad spending, rising from 20.6% in 2024 to a projected 23.2% in 2025.

Grocer's Retail Media Evolution: The Power of Partnerships

As grocers work toward establishing their own retail media networks (RMNs), strategic partnerships with tech vendors are emerging as the fastest and most effective way forward. While digital grocery sales are growing, the reality remains that 84% of retail transactions still take place in physical stores. This makes in-store retail media a massive, untapped opportunity for grocers to monetize their spaces. A July report from Vibenomics underscores this shift, emphasizing the growing importance of in-store advertising. Grocery Doppio’s latest findings further highlight that 70% of in-store retail media deployments will happen within the next 18 months, signaling rapid transformation in how grocers leverage their brick-and-mortar presence for digital engagement.

However, rather than building these capabilities from the ground up, 97% of grocers now prefer to deploy white-label or third-party retail media solutions. This shift reflects a pragmatic, results-driven approach leveraging proven technologies to accelerate go-to-market strategies, mitigate development risks, and unlock network effects faster. Instead of pouring resources into platform development, grocers are prioritizing business growth, customer engagement, and monetization strategies. The industry’s confidence in retail media’s potential is evident, with 69% of retailers believing that in-store media gives them a competitive edge over third-party platforms. Unlike external digital ad platforms, physical stores attract organic foot traffic, foster deeper shopper engagement, and create seamless omnichannel experiences. Recognizing this advantage, grocers are doubling down on retail media partnerships to rapidly scale their capabilities.

Why Are Grocers Partnering with Retail Tech Vendors

Grocers possess rich consumer data from shoppers who routinely visit stores or use apps with strong purchase intent. If leveraged strategically, retail media networks (RMNs) enable grocers to monetize this data while helping brands track how specific engagements lead to conversions.

However, not all grocers have the resources to build sophisticated RMNs. Large grocers can provide multiple advertising opportunities, but smaller grocers lack the technology infrastructure to do so. By partnering with tech vendors, grocers can extend their consumer data insights across various ad formats, including in-store displays, out-of-home advertising, digital promotions, and programmatic ad targeting.

How Retail Media Partnerships Drive Growth for Grocers

Access to Insightful Customer Data

Retail media networks help grocers analyze consumer behavior based on geography, demographics, and purchase patterns. This enables brands to identify the most effective touchpoints and create optimized shopping journeys.

In 2024, 92.1% of all grocery sales still happen in-store, proving that physical retail remains critical for consumer insights (Retailing & Wholesaling - Retail Trends Report).

Unlocking New Revenue Streams

Retail media allows grocers to monetize their digital platforms by selling ad space to third-party brands. This creates an alternative income source beyond traditional product sales and strengthens grocers' ability to compete with e-commerce giants like Amazon.

Amazon’s Q4 2024 report states that its retail media business grew 18% YoY, demonstrating the profitability of digital ad placements.

Driving Higher Brand Engagement

Retail media networks provide brands direct access to consumers at the point of purchase, increasing visibility and conversions. Walmart Connect’s U.S. advertising business grew 30% in the past year, as brands increased investment due to Walmart’s ability to link digital ads with actual purchases.

Kroger Precision Marketing is projected to grow 20% in 2024, showing strong engagement as more brands leverage Kroger’s customer data for targeted advertising.

Enhancing the Customer Experience

Retail media enables grocers to drive personalized promotions, digital recommendations, and loyalty-driven campaigns, making ads more relevant to shoppers.

In Q3 2024, Grocery Doppio’s research found that 63% of grocers reported higher customer engagement through better communications and digital promotions, reinforcing the role of RMNs in enhancing the shopping experience.

By integrating retail media into their operations, grocers can turn traditional in-store advertising into a seamless omnichannel experience, making every interaction more engaging and meaningful for consumers.

This table highlights how retailers embrace third-party partnerships to scale their media networks efficiently. (link to Infographic)

Challenges in Scaling Retail Media Networks

Despite the promise of retail media, building and managing a retail media business is no small feat. For an RMN to thrive, it must be treated as a full-scale business venture, requiring talented professionals, cutting-edge technology, omnichannel integration, and data-driven decision-making. The biggest challenges include:

Talent Gaps: The retail media sector demands a workforce with expertise in digital advertising, media operations, and data analytics. However, 79% of grocers admit they lack the necessary in-house talent to scale their retail media business.

Upgrading Technology and Data Infrastructure: Grocers need to move beyond basic advertising solutions and adopt advanced marketing, measurement, and data integration capabilities. Retailers must ensure that their systems support both in-store and online engagement, allowing seamless ad targeting across multiple touchpoints.

Building Strategic Partnerships: A successful RMN relies on scale (the number of shoppers) and data depth (multi-channel insights). Yet, only 13% of grocers currently have strong third-party data relationships—limiting their ability to maximize audience reach and attract premium advertising dollars.

Conclusion 

The rise of retail media is reshaping the grocery landscape, transforming retailers from merchants into powerful media players. By tapping into first-party data, leveraging their physical stores, and partnering with tech innovators, grocers are not only creating new revenue streams but also redefining shopper engagement. However, success in this space requires more than just ambition—it demands the right technology, a skilled workforce, and a well-crafted partnership strategy. This is why collaborations with tech vendors are no longer just an option but a necessity for grocers looking to thrive in the evolving retail media ecosystem.

Important Note on Information Sources

The insights have been collated from publicly available resources, such as industry reports, company press releases, and trade publications. If you would like to contribute we welcome your feedback. Please feel free to reach out to us directly at insights@grocerydoppio.com.

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Cited Sources

Grocery Doppio, “State of Digital Grocery: Evolve to Improve Profitability”

Grocery Doppio,”State of Digital Grocery: In-Store Media Monetization”

Grocery Doppio, “Why Retail Media Networks Are Key for Grocery Success: Inside the $8.5B Grocery Media Evolution”

USDA Economic Research Service,”Retailing & Wholesaling - Retail Trends.”

Amazon  Investor Relations, “Q4 2024 Earnings Call.”

Walmart Investor Relations, “Walmart Quarterly Reports” 

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