The retail media market is already estimated at around $200B globally. If you take out Amazon and China, you’re left with roughly $50–75B.
Almost all of that spend, close to 99%, goes to online ecommerce websites, while most shopping still happens in physical stores.
So how do we explain this gap and how can we reudce it (and what does it have to do with eggs)?
A few years before COVID, and even more during it, online retailers realized something fundamental. They have another busines besides ecommerce. It’s called advertising. They sit at one of the most valuable moments in the consumer journey, right before a purchase decision, and advertisers are willing to pay for that.
Retail media didn’t emerge to help retailers sell more products. It emerged as a new, highly profitable revenue stream built on advertising.
But understanding that wasn’t enough. What really made retail media scale online was that retailers were willing to do what was needed to grow this new business – They were willing to add ad space in their websites (the supply side) and to offer measurement tools for the advertisers so that they can be reassured that it’s working and spend more (the demand side). Without both supply and demand working together, it simply wouldn’t have scaled.
Many retailers learned this the hard way. They wanted to reach Amazon-like benchmarks, 1% of GMV and beyond, but were not always willing to add enough ad inventory or share enough performance data. As a result, some of them never got past 0.1%. In other words they didn’t understand they had to break some eggs to get an omelet.
Today, we are at the exact same moment with in-store retail media.
Physical stores are still where most shopping happens and where many purchase decisions are made. Yet almost none of the media budget flows there. If retailers want to shift even a small portion of that 99% from online to in-store, they need to follow the same playbook.
They need to build real advertising tools and inventory (who said audio?) and they need to provide measurement that advertisers trust.
But before any of that, they need to fully adopt the same mindset shift that online retailers went through a few years ago. This is not about selling more products. This is about building a new business of selling advertising that helps brands sell more products.
In other words, it is not only understanding that you need to break some eggs to make an omelet. It’s understanding in the first place that what you want is an omelet.
