Retail media didn’t just sneak in through the back door—it kicked it wide open. One day, marketers were casually talking about “emerging revenue streams,” and the next, retail media had become a billion-dollar juggernaut.
But let’s be honest for a second: How did this shift happen so fast? Why is every major retailer suddenly talking about ad networks like they’re launching the next Netflix? And most importantly, why should you, as a marketer, care?
Here’s the thing: retail media isn’t just another digital channel. It’s where data, dollars, and decision-making collide. And while most people focus on the ads, the real magic? It’s hidden in the incentives—promotions, loyalty programs, and all those little nudges that make a shopper say “Why not?”
Let’s unpack why retail media matters—and how promotions and loyalty just might be its not-so-secret power source.
The Revenue Engine Retailers Didn’t Know They Needed
Imagine you’re a retailer grinding out a living on a 5% margin. Every dollar is a battle. Now imagine making 70% margins just by letting brands advertise on your own platforms—no new stores, no new products, just better use of what you already have: your audience.
Sounds too good to be true? It’s not.
Let’s run some simple numbers. A $1B retailer pulling in 5% net income is looking at $50 million. Now tack on $10 million in retail media revenue, at an 80% margin. That’s $8 million in clean, extra profit. Just like that, you’ve bumped total profit by 16%, without selling a single extra unit of deodorant.
This is why retail media has become the industry’s darling. It’s high-margin, high-impact, and entirely within a retailer’s control. And brands love it too—because they get to reach customers at the exact moment they’re deciding what to buy.
Okay, But What Is Retail Media, Exactly?
If you’re thinking this is just digital ads dressed up in retail branding—well, kinda. But also not really.
Retail media is advertising that lives inside a retailer’s ecosystem—on their website, app, in-store screens, or loyalty emails. Think: sponsored search results on Target.com, banner ads in the Uber Eats app, or brand-funded promos in your Walgreens account.
And here’s what makes it different: it doesn’t feel like advertising. It feels like shopping.
There are four key players in the retail media orchestra:
- The Retailer – They’ve got the platform, the audience, and the first-party data. Now they’re selling access to all three.
- The Platform – These are the touchpoints: the app, the loyalty portal, the self-checkout screen.
- The Brand – Typically a product supplier, they want to be front and center when a customer’s about to click “buy.”
- The Consumer – That’s who everyone’s trying to influence. And the cool part? Their behavior feeds back into the whole system.
It’s like a feedback loop powered by purchase intent—and honestly, it’s kind of genius.
Why Retail Media Makes So Much Sense Now
We’ve all seen what’s happening out there. Privacy rules are tightening. Cookies are crumbling. Social media ads are... well, not what they used to be.
Retailers are sitting on a goldmine of first-party data—purchase history, preferences, loyalty behavior. They know what people actually do, not just what they say they like.
And brands? They’re desperate for signal in the noise. So when a retailer offers access to real shoppers right at the point of purchase, plus the ability to measure conversion in real time, that’s not just appealing. That’s irresistible.
And it’s not just grocery anymore. Retail media is showing up in rideshare apps (hello, Uber), online grocers (Flink), and even beauty brands like Sephora.
But here’s where it gets even more interesting…
Promotions and Loyalty: The Real MVPs No One Talks About
Most retail media conversations start with impressions and CPMs. But you know what actually makes someone buy a product?
A discount. A deal. A nudge.
In fact, 74% of shoppers say they discover new products through promotions and coupons. Social media ads? Just 36%.
That stat alone flips the narrative. Because when retail media is paired with brand-funded promotions, suddenly the ad isn’t just visible. It’s valuable.
Let me put it this way: you can show me a dozen ads for almond butter. But offer me 15% off the fancy organic brand I’ve been eyeing? Sold.
How Promotions Turbocharge Retail Media Revenue
Here’s the behind-the-scenes playbook:
- Brands fund the deals, retailers display them.
- Shoppers get rewarded, feel good, and hit “buy.”
- Retailers collect more high-margin ad revenue.
- Everyone wins. It’s not just engagement—it’s high-intent engagement. And that’s the good stuff.
Better yet, promotions give brand partners actual ROI. They’re not just guessing whether a display ad worked—they see the sales spike directly tied to their spend.
And when brands see returns, they come back. With bigger budgets.
Loyalty: The Unsung Hero Behind Better Targeting
Let’s talk loyalty programs. Not the dusty old punch cards or generic “10% off your next order” deals. We’re talking modern loyalty—data-driven, digital, and deeply personal.
Loyalty programs do two crucial things for retail media:
- They get people to opt in (yes, we said it—"opt") to communication and data sharing.
- They make that data actually useful by tying it to behavior, preferences, and patterns.
That’s how you get campaigns that don’t just feel timely—they are timely.
And when you add gamified incentives, like points for sharing data or buying specific brands? Now you’re really cooking.
Wait—Doesn’t Retail Media Help Loyalty, Too?
Absolutely. The relationship goes both ways.
Retail media networks help fund richer loyalty programs, since the rewards are often brand-paid. That means retailers can offer more, without eating into their own margins.
Also, those exclusive loyalty promos? They make members feel special. They make customers stick around. And that, friends, is the difference between one-time buyers and lifelong fans.
The Brands Who Are Doing This Really Well
You want proof? Let’s look at a few brands turning retail media + incentives into something powerful.
- Sephora’s Beauty Insider is basically a masterclass. Brand-funded promos are locked behind a member login, meaning they’re only visible to high-intent shoppers—and fully trackable.
- Debenhams Beauty Club dishes out member-only gifts and GWPs—again, paid for by brands, delivered by the retailer.
- Flink, the online grocery disruptor, targets its customers with hyper-personalized, brand-funded offers—often triggered by time of day, cart size, or previous orders.
This isn’t theory. It’s the new playbook.
So... What’s Next?
Retail media isn’t slowing down. In fact, it’s expected to account for a massive share of digital ad spend in the next few years.
But here’s the twist: It’s not just about the ad real estate. It’s about the relationship.
When you pair smart targeting with real incentives—discounts, points, exclusive access—you’re not just grabbing attention. You’re earning trust.
And that? That’s the real long game.
So next time you’re planning a retail media campaign, ask yourself:
Where’s the value for the shopper? Where’s the reward?
Because honestly, attention’s great. But engagement—the kind that drives loyalty, repeat purchases, and measurable ROI—that’s what makes retail media not just work, but win.
