In-Store Retail Media Surges in 2025 as $7T Physical Spending Goes Digital

It’s one of the biggest blind spots in modern advertising: Americans spent $7.051 trillion in physical stores last year—nearly six times what they spent online—yet barely a sliver of that spending is being monetized through digital ads inside the store. Welcome to 2025, where the retail media revolution isn’t happening on screens at home—it’s happening on shelf-edge displays, in checkout lanes, and on Connected TV screens in grocery aisles. The disconnect is staggering. While Kroger Precision Marketing and Albertsons Companies Inc. are racing to turn physical spaces into data-rich ad platforms, nearly 99.3% of retail media dollars still flow to online channels, even though 83.7% of purchases happen in brick-and-mortar stores. The opportunity isn’t just big—it’s overdue.

The $7 Trillion Gap

Here’s the thing: if you walked into any Walmart, Target, or Kroger this year, you’d see shoppers scanning barcodes, using mobile coupons, and even paying with their phones. But the ads they’re seeing? Mostly from Amazon. And those ads? Mostly online. Amazon.com, Inc. controls over 75% of U.S. retail media ad spend through 2027, according to eMarketer. But inside the store? It’s still the Wild West. No single player dominates. No universal platform. Just a patchwork of digital signage, QR codes, and trial-and-error campaigns. That’s changing fast.

Nielsen reports retail media spending in the U.S. will grow 20% this year—nearly five times faster than the overall advertising market. Meanwhile, Harvest Group says its managed media spend grew over 60% in 2024 alone. Why? Because brands are finally realizing that the moment a shopper reaches for a cereal box isn’t just a purchase—it’s an advertising opportunity. And it’s happening right now, in real time, without the shopper even opening an app.

Who’s Winning the Aisle?

Amazon owns the digital cart. But in the physical store, the race is wide open. Walmart Inc., Target Corporation, and Instacart Inc. are all investing heavily in in-store tech—digital signage, beacon networks, and integrated CTV. Take Albertsons Companies Inc.. In mid-2024, it launched Connected TV capabilities inside its stores. Not on a TV in the living room. On screens above the dairy case. Roche, who leads its media strategy, calls it a "renaissance." Why? Because brands can now track a shopper from seeing a video ad on a screen near the coffee aisle to buying that same brand online a week later. "It’s piquing a lot of interest," Roche told Grocery Dive. "Brands want full-funnel impact. And CTV gives them that—measurably."

Meanwhile, Kroger Precision Marketing’s senior vice president, Christine Foster, put it bluntly: "In-store retail media is still very much underutilized." She’s not just talking about technology. She’s talking about mindset. "The world is vast," she said. "It’s much bigger than the time spent in a grocery store or on a grocery website." That’s the key insight: the store isn’t just a place to buy milk. It’s a touchpoint in a longer journey—where awareness is built, loyalty is tested, and decisions are made. Digital screens, when done right, don’t interrupt. They assist.

Measurement, Integration, Accountability

For years, retailers struggled to prove ROI on in-store ads. How do you know if a digital display near the cereal aisle actually moved units? Harvest Group’s answer: "Measurement, integration, accountability." That’s their 2025 mantra. And it’s driving change.

Albertsons now uses longitudinal metrics to group shoppers into cohorts—tracking how often someone who saw an ad on a screen buys that product within 14 days. Quad’s August 2025 report says this kind of closed-loop attribution is turning in-store media from "a nice-to-have" into "a core commerce channel." Even more telling: partnerships like Pentaleap and Teads now let brands run sponsored shelf ads and off-site video campaigns in a single auction—measured with the same precision. No more silos. No more guesswork.

And then there’s AI. Not the flashy kind. The quiet, plumbing kind. ExchangeWire calls it the "next accelerant." AI doesn’t just target ads—it predicts what shoppers will need before they walk down the aisle. It adjusts messaging based on foot traffic patterns. It tells a brand: "Your yogurt is selling well in the Midwest, but in Phoenix, people are switching to plant-based. Try a different creative." This isn’t science fiction. It’s live in pilot programs right now.

Why This Matters for Everyone

Let’s be clear: this isn’t just about grocery chains or CPG giants. It’s about every brand that sells physical goods. If you’re a small manufacturer trying to compete with Amazon’s ad machine, the in-store channel is your last, best shot. No algorithm favors you online. But in a store? A well-placed digital screen, paired with real-time data, can make you visible, relevant, and irresistible.

And it’s not just about sales. It’s about brand equity. A shopper who sees a trusted brand promoted on a screen next to the product they’re about to buy doesn’t just feel convenience—they feel understood. That’s loyalty. That’s trust. And it’s worth more than a click.

The barrier? Fragmentation. Silos. Cost. Grocery stores, in particular, face huge infrastructure hurdles. But as eMarketer notes, the urgency is highest where the spending is greatest. And that’s in physical retail.

By 2028, eMarketer forecasts in-store retail media spend will top $1 billion. That sounds like a lot—until you remember the total retail media market will hit $100 billion by 2027. We’re talking about a $99 billion gap. And someone’s going to fill it.

What’s Next?

Expect to see more retailers launch their own retail media networks with CTV integration. More partnerships between ad tech firms and store chains. More brands demanding proof of in-store impact before they spend a dollar. And more shoppers—without even realizing it—being guided by digital cues as they walk through aisles.

The future of retail isn’t online. It’s not even omnichannel. It’s in-channel. The store is the new homepage. And 2025 is the year it finally gets the ad tech it deserves.