By Sean Cheyney, Head of Retail Media at Vistar Media
Nearly 80 percent of consumer spending happens in stores, and yet 90 percent of retail media advertising happens online. Does anyone sense a misalignment here?
2025 will be the year of in-store retail media. All signs indicate that the advertising industry has reached a tipping point—from a consumer behavior standpoint, from a technology standpoint, and from an advertiser needs standpoint. “In-store media” might sound like a return to a traditional channel, but this is actually the next evolution of advertising – and a perfect example of what can happen when in-person engagement meets modern digital capabilities.
Why In-Store, Why Now
The retail media revolution has been a boon to retailers of all kinds, enabling them to monetize their valuable customer insights and connections while extending new value to brand partners. However, we’ve only scratched the surface to date on the full opportunity.
Last year, American consumers spent $7.051 trillion in retail stores and $1.243 trillion online. And yet, nearly all of retail media spending is still taking place online. eMarketer expects in-store retail media spend will exceed $1 billion by 2028, with its year-over-year growth outpacing that of online retail media. But still: That’s a huge gap to cover—and a tremendous opportunity for retailers that can implement in-store retail media screen and audio networks.
Retailers need to fish where the fish are. The fish, in this case, are in stores, with 80 percent of consumer spending happening the so-called “old-fashioned” way.
Digital media’s capabilities—engaging creatives with targeted ad delivery—are highly effective at influencing purchase decisions. This is why many in-store decisions already are helped by online and mobile channels. So when I say that brands can extend that reach into the actual store, I mean taking those same digital capabilities and bringing them to life in the shopping experience itself.
Retailers have an incredible opportunity to unlock the in-store media opportunity, with a few key principles to keep in mind:
Start with Strategy. Yes, 2025 will be a bit of a gold rush for in-store retail media. But that doesn’t mean retailers should make rash decisions due to FOMO. Remember when all retailers sped to enable ecommerce functions at the start of the pandemic? Some did so rashly, with relieving short-term headaches in mind, and the expenses and systems they implemented weren’t sustainable. Others did so as a part of the long game—and those investments are still paying off today.
Be sure your organization is grounding its in-store retail media decisions around a long-term strategy. In-store retail media isn’t a cash grab for ad dollars. It’s an opportunity to up-level the in-store customer experience as well. Retailers need to consider screen placement, function, and the balance between partner ads and in-house promotions and utilities.
Less Is More. If a retailer says it’s in the market for in-store screens, it will find companies willing to sell them screens—lots of screens. But that doesn’t mean a retailer needs a lot of screens. In fact, it’s better to start small, dial in strategy, and then scale up. A few high-profile section screens, entryway screens, or endcaps is a good entry point.
Maintaining an appropriate level of in-store screens is a two-fold consideration. First, retailers want to be sure that all screen implementations are additive to the customer experience. Second, they want to ensure they’re not sabotaging their ad revenue streams by suddenly flooding their stores with inventory. If retailers fire up too many screens at once, they’re going to have trouble initially selling enough ads to support those investments. The result is likely to be low CPMs and only a fraction of inventory filled, whereas a more-gradual approach can build value and advertiser interest simultaneously.
Not All Screens (or Capabilities) Are Created Equal. Investing in in-store retail media is just that—an investment. From that perspective, quality matters deeply. Screens today are affordable, relatively speaking. But there’s a difference between affordable and cheap. You want the former, not the latter.
But quality isn’t about crisp images and reliable functionality alone. It’s also about the tech infrastructure that underpins an in-store retail media network, and the way in which that infrastructure enables you to deliver on omnichannel goals and measurement needs. Retailers need to ensure they’re getting the backend right from a CMS, ad server, and programmatic stack perspective. Don’t just bolt on legacy tech. That’s like putting a lawn mower engine in a sports car. Make sure you’re building your network for speed and any advanced functionalities that may become available in the future.
Importantly: Don’t go it alone. Retailers know in-store experiences, and they excel at delivering comfort and convenience for their customers. But in-store retail media runs far deeper than what customers see on the screen. The proper deployment and management of digital signage and audio is complex, and it’s OK to ask for help.
2025 will be the year of in-store retail media, but this opportunity won’t just fall into retailers’ laps. Now is the time to be laying the foundation for retail media’s next biggest opportunity.