Excluding Amazon, global retail media growth is forecast to plummet to 9.8% in 2027, marking the lowest year-on-year rate since WARC Media began tracking the sector, according to BMI. While the retail media market appears to grow, most platforms face an unprecedented slowdown, struggling to deliver long-term brand value. The deceleration, particularly beyond Amazon, reveals a maturing market grappling with fundamental challenges. Companies will likely scrutinize retail media investments, consolidating spending on proven platforms like Amazon or shifting budgets to more effective long-term brand-building channels.
Amazon's Unrivaled Dominance
- Global digital retail media advertising spending was estimated at 136 billion U.S. dollars in 2024, according to Statista.
- Amazon holds roughly a third of global total ad revenues in the digital retail media advertising market, Statista reports.
Amazon's substantial market share masks the broader retail media landscape's underlying struggles. Amazon's dominance creates a skewed perception of market health, where the headline market size is misleading due to one company's outsized contribution.
The Effectiveness Gap
A simulated shopping study found memory encoding for ads on retailer platforms was 47% lower than for ads in generic offsite environments, according to BMI. Reduced ad recall means many retail media placements fail to create lasting brand impressions. Advertisers are thus investing in a channel with diminishing returns for long-term brand building, justifying a slowdown in investment across non-Amazon platforms.
Beyond Conversion: The Brand Building Challenge
Retail media advertising is less effective at generating long-term brand outcomes compared to converting existing demand, according to Marketingreport One. Its inherent focus on immediate conversion means it struggles to build the foundational brand equity necessary for sustained growth. This makes it a poor long-term investment for brands seeking enduring consumer connections; companies relying on retail media for brand building fundamentally misunderstand the channel's limitations.
What This Means for Advertisers
Advertisers must re-evaluate retail media investments, prioritizing platforms with clear ROI. The impending collapse in growth for non-Amazon retail media, as forecast by BMI, reveals many brands are over-investing in a segment rapidly losing momentum. By early 2027, companies like Procter & Gamble may reallocate significant retail media spend from smaller platforms to more established brand-building channels, seeking greater long-term value than current diminishing returns.
