This week, eMarketer released a revised growth trajectory for retail media that projects a slowing pace of growth for the industry overall — as well as a slower pace than historicals for Amazon Ads (which makes sense; it's already at a $69 billion ARR).

Over the next four years, the retail media industry will grow 88% to a $98 billion TAM by 2028 — so it's still an incredibly important area of focus for the media, advertising, and retail industries.

But what fascinated me was the projected percentage of the pie that Amazon maintains through 2028. Hint: it doesn't change. So while retail media will see an influx of $46 billion over the next four years, Amazon will always own approximately 77% of the pie — and that's a serious problem for almost every other retailer.

Pie chart: dozens of retail media networks are fighting over a small slice of the pie. % of US retail media digital ad spending by company, 2025 — Amazon 77.3%, Walmart 7.0%, and all other retailers combined 15.8%, split across dozens of named networks. Source: EMARKETER Forecast, Nov 2024.
Dozens of RMNs fight over a small slice — % of US retail media digital ad spend by company, 2025 · EMARKETER Forecast, Nov 2024

What Amazon can do with these monies — invest in innovation, drive more traffic, reduce the cost of goods for customers, improve experiences, reduce operating costs, grow sales — dwarfs that of any other retailer. It has a compounding effect over time. A flywheel, if you will.

And it doesn't just impact ad investments — it impacts trade investments as well, because continued growth creates a better negotiating lever for Amazon. A lack of serious, competitive participation in retail media from other retailers simply fuels this flywheel, shifting more and more supplier trade and advertising budgets to the behemoth.

Part No. 01The [multifaceted] retail media flywheel.

There are a bunch of different versions of the retail media flywheel, but mine is by far the most unnecessarily complicated (it's how I roll).

Diagram: the multifaceted retail media flywheel. Retail media investments drive grow traffic and invest in innovation, which grow sales, which grow trade investments, which lower price for customers, which loops back to grow sales and feed retail media investments again.
The multifaceted retail media flywheel · retail media's interconnectedness with total business growth

Retail media, to me, has always been ingrained as a core tenet of the overall retail proposition (as were shopper and trade marketing before it) — suppliers co-funding the growth of the places they sell. If your flywheel starts with 'retail media investments,' those investments can have substantial benefits for a retailer's overall business:

But more importantly, growth in the business creates increased perceived value of an individual retailer — and improves that retailer's ability to negotiate on trade investments.

Greater share of the pie → increased reasons to invest → more trade investments → lower customer costs → more sales → and round it goes. Growth on all sides.

More trade investment lets a retailer reduce costs for the customer, which generates more sales and further perpetuates the flywheel. Amazon knows this — and it's why they have a disproportionate share of overall trade and retail media investments.

Part No. 02The opposite of growth.

The opposite is also true — but not in an obvious way for most retailers yet. If the flywheel is perpetuating itself at another retailer (in this case, mostly Amazon), then Amazon can continue to significantly outpace the market in overall growth.

We see this in earnings reports across the industry, with many retailers seeing declining sales in spite of growth in overall retail sales (however slight), and growth in Amazon's retail business. Yes, there are myriad factors — but I argue that the retail media flywheel Amazon has built for itself (its own competitive moat) is having a far more significant impact on other retailers' declining sales than they can quantify today.

Simply put, competing retailers can no longer provide the same value to customers. EDLP and EDLC, as two core levers of growth, now include retail media.

It's not just Amazon — several other retailers have established strong foundations that let them compete: Orange Apron Media by The Home Depot, Walmart Connect, Sam's Club Member Access Platform (MAP), CVS Media Exchange (CMX), and Best Buy Ads, plus well-established European RMNs like Asda and Morrisons.

A lack of growth relative to the market — or worse, declining sales — has the compounding effect of limiting or reducing trade and retail media investments. Those dollars ultimately end up in the hands of retailers that have competitive offerings. What many retailers still perceive as internal competition for trade vs. shopper or retail media dollars is false: your real competition is with retailers that have scaled retail media offerings.

And with trade investments alone representing an estimated 30–50% of the overall operating income of many major grocery and big-box retailers today, declining investments can have a detrimental impact on these retailers' ability to operate in the future.

Said plainly
The retailers that are not investing significantly in their retail media businesses today are at risk of no longer being able to operate.

Part No. 03Creating a competitive moat with retail media.

There's a lot more to this than a single post can cover, but I propose three baseline ways a retailer can establish a competitive moat in their retail media business. These are really important to do together:

Done together, these baselines allow for differentiation that can drive net-new dollars into most retailers' retail media businesses. But getting there requires a leap of faith at an executive level. For that, we need to look at:

Still hope — but not a lot of time.

Even in a nascent state, retailers still have the space to create competitive moats out of their retail media businesses. But they don't have a lot of time to do it — the horizon for viable participation in this space at scale dwindles with every quarter.

It's time to take your retail media business very seriously.

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