While retail media continues its meteoric rise, artificial intelligence is revolutionizing how brands connect with shoppers across digital channels. The numbers tell an exciting story – retail media ad spending is set to reach a whopping $166 billion by 2025, growing more than three times from its 2019 levels. Think of AI as the savvy personal shopper who knows exactly what customers want before they do. Brands using AI personalization are seeing 1.3x increase in incremental ROAS.
The retail landscape has changed dramatically, with AI becoming the secret sauce behind personalized advertising. Gone are the days of seeing the same annoying ads over and over – something that frustrates 59% of shoppers. AI now analyzes consumer behavior faster than you can say “add to cart,” ensuring ads stay fresh and relevant. It’s like having a super-smart friend who remembers everything you like and suggests products you’ll actually want. Programmatic advertising enables real-time campaign adjustments for better efficiency.
First-party data has become retail’s golden ticket, especially with privacy regulations making third-party cookies crumble. Companies that effectively use their own customer data are seeing triple the revenue of their peers. When combined with AI, this treasure trove of information from loyalty programs and purchase history becomes even more valuable than grandma’s secret recipe collection. AI transforms branding from static processes to dynamic strategies that evolve in real time with consumer behavior and sentiment.
Interestingly, more than half of brand spending now goes to off-site channels, like social media and in-store promotions. While these channels might not be as profitable as on-site advertising, they’re essential for reaching customers wherever they shop. AI helps connect these dots, making sure your shopping experience feels seamless whether you’re browsing on Instagram or walking through a store.
Despite all this progress, only 40% of retail media teams consider themselves AI experts. It’s like learning to ride a bike – some are still using training wheels while others are doing tricks.
But everyone’s moving forward, and the shift from experimental AI use to full-scale adoption is picking up speed. As retailers and brands continue to embrace AI-powered solutions, we’re seeing smarter decision-making, faster insights, and more engaging shopping experiences that feel truly personal.
