Data, differentiation, and (continued) digitalisation: our retail media trends for 2025

The start of a new year is upon us and with it what’s rapidly becoming a dunnhumby tradition. Yes, it’s time once again for our annual predictions, a heady blend of on-the-ground insight and (some admittedly well-informed) guesswork on what the next 12 months might hold.

This year, we’ll be taking a look at everything from AI and tech through to retail media. First up, though, is Cat Bell—Senior Consulting Director—who gives us her view on 2025’s biggest retail media trends.

Third-party data will enter the last-chance saloon

We all know how important customer data is. It’s the secret sauce that powers everything from advanced personalisation through to localised assortment. In the right hands, data can create unparalleled insights that supercharge planning, targeting, and measurement. So far, so obvious—but the point here is that getting hold of this data will become even more important in 2025.

Chrome-based cookies may have been given a stay of execution in 2024 (after four years of Google threatening to abolish them entirely), but the fact remains that third-party data is increasingly under threat. Brands need access to data that stays the right side of privacy regulations like GDPR—which will give retailers a compelling reason to double down on their loyalty programmes in 2025.

In practice, that could lead to many retailers relaunching their loyalty schemes altogether. As scrutiny around data privacy continues to grow, retailers will need to ensure that they’ve got the right opt-ins and consents in place to use loyalty data as they’d like to. There also needs to be a sufficient “value exchange” with shoppers, of course—which may lead some retailers to explore partnerships across different verticals to ensure a truly compelling offering. Speaking of which…

Partnerships will help RMNs to stand out from the crowd

‘Go big, go niche, or go home’ will be the message for retail media networks (RMNs) in 2025. If that sounds contradictory in a market that’s estimated to go from €155 billion to €200 billion, then bear this in mind: as retail media continues to grow—and more RMNs spring up—brands will increasingly have the chance to pick and choose where they spend their money.

To stand out in a crowded marketplace, retailers will need to offer one of two things: scale or specialism (and ideally both). For brands to invest, they’ll need to know that they can reach either a huge, generalised audience, or very specific groups of people with dedicated interests. A niche health food RMN might not be able to offer the former, for instance, but could be very appealing to brands that play only in that space. Add scale to that, of course, and you have something more compelling still.

Awareness of this fact is already growing. The end of 2024 saw significant activity in the partnering space, with Intermarché, Auchan, and Casino coming together to create a retail media alliance in September. While these aren’t exactly niche brands, the point still stands: for retailers looking to scale, teaming up feels very much like the new direction of travel. A pie shared is still preferable to an empty plate, after all.

Hyper-personalisation will start to become a basic expectation

Retail media isn’t the new kid on the block anymore. It’s now a key part of the marketing toolkit for brands, and par for the course for customers. But with familiarity, of course, comes the risk of contempt—particularly if retailers don’t step up to demands around personalisation. As we move into 2025, basic levels of relevance will no longer be enough. Instead, retailers will need to give brands the ability to be hyper-targeted in terms of who they reach and how.

Take the concept of sponsored products, a relatively common sight on many retail websites today. Do customers really want to be served the same static recommendations every time they carry out a search? Do brands really want to pay for listings that end up becoming stale and uninteresting? Hyper-personalisation, where products shift around the recommendations grid based on individual preference, has the potential to mitigate those risks.

Measurement is evolving, but standardization will take time

It’s never made sense that mainstream media measurement encompasses everything from reach to engagement while retail media remains obsessed with sales. That’s not to say that sales aren’t a hugely important metric—but things undoubtedly need to get nuanced. In more mature markets, for instance (the US, UK, and France), brands are moving beyond Return on Ad Spend (ROAS) and seeking out metrics that evaluate performance at every stage of the funnel.

The issue now is finding consistency across different RMNs. Things like customer engagement, customer satisfaction, customer lifetime value (CLV), and brand awareness are all helpful in establishing a fuller picture. But we need to agree on what success actually looks like. Standardization will evolve in the coming years, but 2025 is unlikely to be the one where we get it pinned down.

Non-endemic retail media will continue to scale

Non-endemic retail media—where retailers host ads for products they don’t sell—is a relatively niche market today. That’s not to say that there aren’t major opportunities for growth, though, with offsite media serving as one of the most logical. If a retailer’s data suggests that a family recently welcomed a baby, for instance, that could easily translate into an offsite activation for a hotel chain that specialises in kid-friendly accommodation.

As mature retail media networks look to expand and scale, offsite is only likely to become more important. While (well-targeted) non-endemic ads hosted within a retailer’s own ecosystem don’t necessarily detract from the customer experience, there is an argument to suggest that offsite ads are simply a more ‘natural’ home for non-grocery content. It’s a combo that enables diversification and relevancy, without ever needing to impact the core grocery shopping experience.

Some retailers are taking things further still, of course. The Walmart Marketplace, for instance, gives small (non-CPG) brands the opportunity to sell—and advertise—direct to Walmart customers. It’s a brave, and very different, new world.

The digitalisation of the store will continue to accelerate

The past few years have seen some exciting developments in the digital signage space. Take innovations like Caper Carts—AI-powered smart shopping carts equipped with excitingly advanced tech like image recognition cameras. They can also offer personalised suggestions and real-time updates on prices and promotions.

The introduction of cooler screen technology has also been a game-changer for some markets. The doors on these units are more than just an electronic billboard—cameras and sensors can determine the approximate age and gender of shoppers standing in front of a door, as well as behavioural responses and even external signals like weather patterns. Machine learning algorithms can then use that information to customise ads, and as more advanced sensor technology is introduced, they can be sold on a cost per mille (CPM) model.

One sidenote here: many out-of-home ad networks have started to invest heavily into programmatic capabilities. So, don’t be surprised to see retailers moving towards programmatic models for their own digital signage soon, too.

Growth-focused retailers will outsource or partner

One trend that we’ve seen play out in past years is in-housing, with retailers looking to build up the tech and data capabilities they need to create their own RMNs. On the surface, that makes sense—but building your own RMN is a considerable challenge. It requires significant capital investment, including improvements to websites, e-commerce platforms, and data infrastructure.

With that in mind, I expect that this year will see a shift back towards partnering—specifically, ‘choiceful’ partnering. The continued evolution of the retail media market means that retailers now have access to a broader set of tech and services partners than ever. With that expanded ecosystem comes the opportunity to build out their ecosystem as it suits them, picking and choosing from different partners as needed.

As competition continues to grow (see above), I expect we’ll see a growing number of retailers looking for assistance with some core retail media services, too. Media sales, in particular, is an area that could see major pickup over the coming months, as retailers look to scale their retail media revenues as fast as possible.