Retail media is becoming the fastest-growing media category globally, and the biggest shift is happening not online but inside physical stores. According to a new report from EMARKETER, the segment is now expanding at more than 24 percent annually and is expected to exceed USD 1 billion before the end of the decade. Christian Bönnelyche, senior advisor at BizLab, says this represents the largest change in physical retail in over twenty years.
Retail media changes the playing field for physical retail
Traditionally, physical retail focused on selling products, shelf space and in-store campaigns. That playing field is changing rapidly. Retail media in stores is no longer primarily about exposing products; it is about selling reach, audience segments and measurable conversions. This creates a new business model with margins that are significantly higher than those of classic retail.
Christian Bönnelyche explains that advertisers are ready to reallocate large portions of their spend from Google, Meta and traditional media because physical retail can now offer the same levels of data quality, transparency and measurability. He emphasizes that retailers today have a unique opportunity to position themselves as modern media channels with major advantages.
Retail media is growing fastest in physical stores
The EMARKETER report shows that retail media is now growing faster in physical stores than online. What was previously seen as a static environment is evolving into a data-driven communications platform. Growth is being driven by retail chains investing in digital screens, audience-targeted content and customer activations based on real-time data.
Physical retail can offer something many purely digital channels cannot: proximity to the purchase moment. A customer who encounters a message in-store is already on an active buying journey, which leads to higher conversion rates.
AI makes in-store retail media measurable and scalable
The major technological advance comes from AI and advanced analytics platforms such as BizLab FLOW. For the first time, stores can measure which audience segments move through the store environment in real time. This includes gender, age bracket, behavioral reactions and interactions with messages on digital surfaces.
Christian highlights that these kinds of data-driven insights are precisely what make in-store retail media so attractive to advertisers. If physical retail can deliver the same precision and measurability as digital platforms, it becomes a natural complement and, in many cases, a more effective channel.
Advertisers want to buy entire purchase journeys, not isolated channels
One of the key findings in the EMARKETER report is that advertisers no longer want to buy single channels. They want to buy entire purchase journeys where digital and physical touchpoints are integrated into a cohesive strategy.
To succeed, retailers must coordinate
• Digital touchpoints such as e-commerce, apps, CRM and social media
• Physical touchpoints such as digital screens, audience-targeted messages and in-store activation spaces
It is the combination of these two worlds that makes retail media powerful and attractive for brands that want to reach the right audience at the right time.
Physical retail gains a competitive advantage for the first time in 20 years
Years ago, physical retail lost significant ground to e-commerce, largely due to a lack of data. That trend is now reversing. Stores have something digital platforms cannot offer: direct proximity to the customer’s final decision.
Christian points out that the preconditions are now in place:
• A steady flow of relevant in-store visitors
• Local trust and strong customer relationships
• Immediate proximity to the purchase moment
• Data insights that were previously missing
Together, these factors create an opportunity for retail to reclaim initiative and build a new, highly profitable business model.
Retailers need to think like modern media companies
Success requires a new mindset. Retailers must stop selling mere space and start selling audiences, reach and measurable contacts. Christian Bönnelyche stresses that the technology already exists; the question is which actors will take the step first.
Retailers that move fastest to establish professional media products will not only strengthen their market position but also open a significant new revenue stream with high margins.
Retail media is the next major opportunity for Swedish and Nordic retail
In-store retail media will grow rapidly across the Nordics in the coming years. Chains that invest early in technology, data collection and integrated media solutions will gain a substantial head start and be able to compete directly with the largest digital players.