WARC forecasts slower growth for retail media spend

WARC forecasts global retail media advertising spend will reach USD $200.4 billion in 2026 and rise to USD $223.4 billion in 2027.

That would give retail media a 15.2% share of total global advertising investment in 2027, as the sector moves further into mainstream media planning while showing signs of slower growth.

WARC's latest projections put annual growth at 11.5% in 2027. Excluding Amazon, growth is expected to slow to 9.8% - the lowest year-on-year rate since WARC began tracking the market.

The forecast suggests a more mature phase for a channel that has taken a growing share of brand budgets, particularly from consumer packaged goods companies and other advertisers that sell directly through major retail platforms.

Alex Brownsell, Head of Content at WARC Media, said the sector is showing both expansion and strain as retailers push to increase advertising income.

"The retail media landscape is maturing and consolidating, forcing marketers to rethink their approach. While retail media excels at converting existing demand, it underperforms on long-term brand building. Retailers face a delicate balancing act: growing ad revenue to boost margins without overwhelming shoppers with too many ad interruptions that compromise both shopper experience and campaign effectiveness. Success now depends on smart integration with other channels and finding the optimal path to sustainable results," Brownsell said.

US concentration

The US remains the largest and most resilient market in the outlook, even as growth in Europe slows to single digits. WARC forecasts spending on US retail media networks will rise 13.6% in 2028 to reach USD $74.9 billion.

Yet the market remains highly concentrated. Walrus Intelligence data cited by WARC shows Amazon captured 78.0% of all US retail media spending in 2025, while Walmart held 7.5%, leaving 14.5% for all other networks combined.

A similar pattern is visible in Europe. More than two-thirds of retail media spending in France, Germany, Italy, Spain and the UK went to Amazon, underlining the company's dominance across major Western markets.

That concentration is also reflected in advertiser behaviour. In the UK, 73.9% of brands spend with three or fewer retail media networks, while none of the country's eight largest domestic networks generates a third of revenue from the bottom half of brands by spend.

Budget share

Retail media now takes more than half of ad budgets in some packaged goods categories. In 2027, the channel is forecast to account for 55.8% of all media investment by alcoholic drinks brands globally and 54.9% of total food category spending.

Its role is less dominant in other sectors. In technology and electronics, retail media is expected to represent 15.0% of total spending in 2027, down from 16.2% in 2025, suggesting some fast-growing categories still rely more heavily on broader media mixes.

According to the report, Amazon's reach extends beyond conventional retail media. Its non-retail advertising business, including Prime Video and Twitch, is projected to generate USD $6.7 billion in 2027, more than Walmart's total ad spend in 2025.

If treated as a standalone business, that operation would rank as the world's second-largest commerce media player outside China, WARC said.

Ad load risk

The report warns that retailers could damage the shopper experience if they increase advertising pressure too aggressively in search of revenue. It cites research showing that Amazon, The Home Depot, Macy's and Walmart each serves more than 20 ads per page on average.

WARC uses the term "enshittification" to describe the risk that digital shopping environments decline as platforms prioritise monetisation over users and advertisers. The concern comes as consumer spending remains under pressure and networks seek to sustain growth.

WARC highlighted measurement standards, more relevant ad placements and stronger use of data as ways to avoid cluttering retail environments.

Creative challenge

Research cited by WARC suggests retail media advertising faces tougher conditions than many other digital formats. An Ipsos study of simulated shopping experiences on Walmart and Amazon found that memory encoding fell by 47% for ads shown on retailer platforms compared with generic off-site environments.

The same study found that stronger creative quality can still influence outcomes. For undecided shoppers, high-quality creative lifted short-term brand choice by 12%, while among those not in the market it delivered a 21% performance advantage over low-quality advertising.

In-store media also remains underused, despite signs it can affect purchasing behaviour. WARC says 62% of US grocery buyers claim to have bought a product directly after seeing it on an in-store screen.

The report argues that retail media performs well at converting existing demand but is weaker at delivering longer-term effects. It adds that organisational issues on the brand side and poor understanding of commerce-specific formats have contributed to weaker creative work across the sector.

Video is also becoming a bigger part of the retail media mix. Connected TV already accounts for 23% of retail media spending, and WARC expects video on demand to overtake retail media in global advertising investment by 2028.

That shift may create openings for smaller advertisers focused on performance marketing that have not traditionally bought television-style inventory. The report cites Walmart's acquisition of Vibe.co as a sign of that opportunity.