Retail Media Networks Face Execution Challenges Amid Growth Expectations What Shoppers Need to Know

Retailers are betting big on advertising networks as a new profit engine, with projections showing revenue growth around 23% this year. However, a troubling gap has emerged between their ambitious targets and their ability to deliver, which ultimately affects the shopping experience and deals shoppers see.

The Promise and the Reality Gap

Retail media networks, or RMNs, are advertising platforms built into retailer websites and apps where brands pay to promote their products directly to shoppers. The industry is optimistic about expansion, but research presented at a major industry conference reveals significant concerns. While growth is expected to accelerate, fewer than one in five retailers believe they will exceed their revenue targets, and nearly a third expect to fall short of projections.

The disconnect is even more striking when examining confidence levels among retail media leaders. Only 31% said they are confident that advertising revenue is truly new money from suppliers, not simply redirecting existing marketing budgets. The same percentage reported confidence that their network is competitive with rival platforms, down significantly from the previous year. Just 28% expressed confidence in their ability to understand the total market opportunity for their advertising offerings.

Why Technology and Measurement Matter to Shoppers

Behind these numbers lies a fundamental problem: many retailers lack the technology infrastructure and measurement tools needed to prove that advertising spending actually works. When a brand invests in retail media, they want to see real sales growth. If a retailer cannot clearly demonstrate this connection, brands will cut their spending or redirect it elsewhere. This directly impacts shoppers because less advertising revenue means fewer resources for retailers to invest in every deal category we track and improved shopping platforms.

The pressure on retailers is intensifying as competition increases. Artificial intelligence is emerging as both a disruption and an opportunity. Among retailers without native AI shopping agents, 34% are actively building them specifically to generate advertising revenue. Across the industry, 77% of retailers are exploring new AI advertising formats through pilots or investments. This development could reshape how shoppers discover products online.

What Brands Expect From Retail Media

Major consumer product companies are raising the bar for retailers. Marketing leaders stress that advertising investments must produce measurable sales growth, not just impressions or clicks. Every advertising dollar is precious, and if spending fails to drive results, brands will reconsider their retail media strategies.

There is also a shift toward more sophisticated advertising beyond simple product promotion. Brands and retailers are experimenting with storytelling that entertains shoppers rather than simply pushing sales messages. One notable example involved a short-form video series created in partnership between a major brand and a national retailer, featuring a family business story with products woven naturally into the narrative only when relevant. The campaign achieved high engagement and sales lift for multiple products featured, proving that entertainment and community storytelling can be effective advertising vehicles.

This evolution requires retailers and brands to think in longer time horizons, planning campaigns over 12 to 18 months rather than week to week. Such approaches connect advertising with basic retail operations like inventory management and store staffing, acknowledging that no advertising strategy works if products are out of stock or store service is poor.

The Connection to Overall Retail Operations

A critical insight emerging from industry discussions is that retail media success depends on coordination across the entire retailer organization. When rising tariffs fuel costs and interest rates squeeze retailers and manufacturers, operational efficiency becomes even more important. Advertising platforms must align with warehouse logistics, delivery networks, and store operations.

Retailers also face ongoing pressure from operational challenges. High value retailer absorbs rising shipping costs what shoppers need to know about how these investments shape the overall retail landscape and the effectiveness of advertising-supported services.

What This Means for Your Shopping Experience

For shoppers, these industry trends translate into several practical implications. First, expect to see more advertising on retailer websites and apps as retailers expand their media networks. Second, more of that advertising will likely be personalized and AI-driven, showing you products selected by algorithms trained on your shopping behavior. Third, sponsored search results and promoted products will become increasingly prominent as retailers prioritize high-revenue advertising formats.

The quality and relevance of advertising you see depends partly on whether retailers can successfully build the measurement and technology capabilities they currently lack. If a retailer fails to prove that advertising drives real sales, brands will spend less, potentially leading to fewer promotions and deals.

Understanding the mechanics of retail media networks helps shoppers recognize sponsored content, make independent purchasing decisions, and appreciate why some products receive prominent placement in search results and product recommendations.