Retail media hits $200bn, but ad clutter and slowing growth threaten the next phase

New Delhi: Global retail media advertising is expected to cross the $200 billion mark this year, but the market is entering a more difficult phase as growth slows and retailers push harder on monetisation. According to WARC Media's The Future of Commerce Media 2026 report, worldwide retail media investment is forecast to reach $200.4 billion in 2026 and rise 11.5% to $223.4 billion in 2027. By 2027, retail media is expected to account for 15.2% of total global advertising investment. The headline growth, however, masks a cooling market. Excluding Amazon, global retail media growth is forecast to fall to 9.8% in 2027, the lowest year-on-year rate since WARC Media began tracking the sector. Alex Brownsell, Head of Content, WARC Media, said, "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." The slowdown is also uneven across markets. Europe is moving towards single-digit growth, while the US is expected to remain more resilient. WARC Media forecasts US retail media network spending to grow 13.6% in 2028 to $74.9 billion. The market remains highly concentrated. In 2025, Amazon accounted for 78% of US retail media spend, while Walmart took 7.5%, leaving 14.5% for other networks combined, according to Walrus Intelligence. In France, Germany, Italy, Spain, and the UK, more than two-thirds of retail media spend went to Amazon. Retail media is also absorbing a large share of category budgets. In 2027, it is expected to account for 55.8% of global media investment by alcoholic drinks brands and 54.9% of food category spend. But in technology and electronics, its share is forecast to decline to 15% in 2027 from 16.2% in 2025, suggesting that growth will not be uniform across sectors. The bigger concern is what happens as retailers try to squeeze more advertising revenue from the same digital environments. The report flags the risk of what tech author Cory Doctorow has described as "enshittification", where a digital service deteriorates as monetisation takes priority over user experience. That tension is already visible. Research cited by WARC found that Amazon, The Home Depot, Macy's and Walmart each serve more than 20 ads per page on average. The consequences may extend beyond shopper irritation. A simulated shopping study by Ipsos found that memory encoding for ads on retailer platforms was 47% lower than for ads placed in generic offsite environments. Creative quality also becomes more important in that setting. For undecided shoppers, stronger creative drove a 12% lift in short-term brand choice, while among consumers not currently in the market, high-quality creative delivered a 21% advantage over weaker executions. The report also pointed to connected TV and in-store media as areas where retail media could expand beyond traditional performance advertising. Connected TV already accounts for 23% of retail media spend, while video-on-demand is forecast to overtake retail media in global ad investment by 2028. At the same time, 62% of US grocery buyers said they had purchased a product after seeing it on an in-store screen, even though in-store media remains relatively underdeveloped. The larger shift for retail media is therefore no longer just about scale. As the market matures, retailers and brands are being pushed to decide whether the next phase will be built on more inventory, or on better creative, stronger integration and fewer interruptions.