The digital advertising landscape is facing a challenge with the phase-out of third-party cookies, which has been crucial for CPG brands in tracking and targeting consumers online. This shift threatens the effectiveness of digital ad spending. However, as this tool diminishes, the opportunity for in-store retail media to become the core of CPG advertising strategies emerges, shifting its role from optional to essential.
What is in-store retail media? It involves using digital screens and media within a physical store to influence shoppers at the point of purchase. Unlike online ads that can get overlooked, in-store media networks, such as those from Walmart Connect or Kroger Precision Marketing, use a retailer’s first-party data to deliver highly relevant content at the crucial final stage of the customer journey.
For brands like Heineken or Unilever, this means displaying dynamic ads on digital screens triggered by real-time data, such as the shopper's cart contents or demographic information from the POS system. This approach ensures the right offer reaches the right person at the perfect moment.
First-Party Data is Valuable: Retailers have direct access to shopper purchase history and loyalty data, which is high-quality and cannot be replicated by cookies.
Closed-Loop Attribution: Brands can directly measure the impact of an in-store ad on sales, providing clear answers on its effectiveness.
High-Intent Environment: Shoppers in a store are ready to buy, making them more receptive to product suggestions than social media users.In-Store vs. Online Retail Media
The digital advertising landscape is crowded and increasingly expensive. In-store offers a focused, high-impact alternative. For CPG brands and the media buyers who serve them, understanding the distinction is critical to allocating budget effectively in 2025 and beyond.
Many retailers overlook that their physical stores are their best media assets. By setting up an in-store retail media network, they can generate new revenue and offer significant benefits to their CPG partners. This changes the perception of stores from being just sales locations to being effective media channels.
As online tracking declines in reliability, CPG brands that don't shift their ad spend to in-store retail media may fall behind. Connecting with shoppers in person, supported by verifiable data, is now a key advantage ,it's worth exploring a comprehensive CPG trends report.
In-store retail media isn't just another channel; it's the answer to the advertising industry's biggest challenge.
Understanding this opportunity is the first step. Next, let's explore the technology that makes it all possible.
To understand in-store media, CPG brands and retailers must explore its core. An in-store retail media network is a complex system where real-time data creates personalized content on digital screens swiftly. It transforms shopper data into targeted ads almost instantly through a real-time data pipeline. This process starts when a shopper scans a loyalty card or an item, generating a data event.
This pipeline has three critical stages that work in sync to deliver a relevant ad at the perfect moment. Each stage is designed for speed and accuracy, ensuring the message is both timely and impactful.
Data Ingestion and Streaming: POS systems, loyalty databases, and in-store sensors transmit data to a platform like Apache Kafka for rapid event capture.
Real-Time Analytics Engine: A processing engine such as Apache Flink analyzes incoming data instantly, identifying shopper profiles or purchases to suggest relevant ads.
Content Delivery and Display: Insights are sent to a content management system to immediately display the appropriate ad on digital screens.
This description explains the process from a real-world shopping event to an advertisement appearing on a screen.
The process is smooth. A shopper's action at the point of sale triggers a personalized ad to appear on a nearby screen, linking data and influence in less than a second.
For a CPG brand, this technology means you can finally execute highly targeted campaigns in the physical world. For example, a brand could run a campaign that only shows ads to shoppers who are buying a competitor's product, attempting to sway their decision at the last possible moment.
The real power of an in-store retail media network isn't just the screens; it's the intelligent, data-driven brain that decides what to show, when to show it, and to whom.
This kind of sophisticated targeting requires a deep understanding of both retail operations and advertising technology. To really put these concepts into practice, exploring a list of essential analytics tools for marketers can help illustrate what a complete ad tech stack looks like.
Once you demystify this workflow, it becomes clear how in-store retail media transforms a simple shopping trip into a dynamic, personalized experience.
Understanding technology is important, but for retailers and CPG brands, the key question is: what's the return on investment? Investing in in-store retail media focuses on three main goals: generating new revenue, increasing product sales, and preparing for future market changes.
It's about turning store space into a valuable digital asset.
Data from many stores shows clear results. Brands experience increased sales for promoted products, and retailers gain a new revenue source from ads. This is currently happening in places like Carrefour Links and Walmart Connect.
For retailers, store operations usually have low margins, but selling media offers higher profits. By installing digital screens and selling ad space to CPG partners, retailers can achieve margins over 80%, turning stores into profit centers. Beyond static ads, retailers can use first-party data for targeted campaigns, charging more to reach specific shopper segments, such as those buying organic products or baby supplies.
For CPG brands, the holy grail of advertising is proving that ad spend directly led to a sale. In-store retail media offers the clearest path to this with closed-loop attribution.
Here’s a real-world example: A beverage company runs a campaign on in-store screens. The system can track exactly how many shoppers who saw the ad went on to purchase the product in the same transaction.
Data from over 20,000 stores shows that CPG brands using targeted in-store digital media see an average sales lift of 15-35% for promoted products. That's a direct, measurable return on ad spend (ROAS) that is difficult to achieve online.
This level of performance is why CPG ad spend is rapidly shifting towards retail media networks. Brands like Procter & Gamble and Nestlé are increasingly allocating their budgets where they can see a direct impact on the bottom line.
Finally, as we've discussed, the deprecation of the third-party cookie is forcing a massive rethink of digital advertising. CPG brands that have relied on programmatic online ads are now scrambling for reliable ways to reach their target audience.
In-store retail media is the solution. It is built on a foundation of consented, first-party data that is immune to changes in browser or mobile phone privacy settings. By investing in this channel, both retailers and CPG brands are building a sustainable, effective advertising strategy for the future. For a deeper dive, check out the latest CPG trends report.
Theory and tech specs are important, but the real opportunity lies in observing how top companies use in-store retail media effectively today. Major retail and CPG brands, from grocery to beverage sectors, gain a competitive edge by engaging shoppers at the shelf. Here are some examples of this in action.
In retail media, grocery leads with giants like Walmart and Kroger using shopper data to power their media networks. Walmart Connect allows brands such as General Mills to buy ad space at checkouts and aisle endcaps by utilizing loyalty and purchase data to define target audiences. When a targeted shopper checks out, relevant ads display, with sales performance tracked for brands like General Mills.
Kroger Precision Marketing mirrors this, using its 84.51° data science to offer precise targeting beyond demographics, focusing on shopping behaviors and predictive analytics.
For companies like Heineken, point-of-sale promotions are crucial. Retail partnerships enable timely in-store screen ads. Picture a hot Friday afternoon with Heineken ads displayed near beer aisles and checkouts, targeting legal-age shoppers buying party snacks, making the messaging more effective than generic online ads.
Retail media extends beyond physical stores. Instacart harnesses this by offering sponsored product listings as digital shelves. The impact intensifies when online and in-store strategies align. A shopper might see an ad for Ben & Jerry's on Instacart, add it to their list, and get a reminder in-store, creating a cohesive brand experience that boosts loyalty and sales.
Adopting an in-store retail media strategy is a game-changer, but it's not a simple plug-and-play solution. For both retailers looking to build a network and CPG brands looking to buy media, the path is filled with potential hurdles. Understanding these challenges upfront—from technical complexity to organizational alignment—is the key to a successful rollout.
The biggest obstacles aren't just about technology. They involve significant investment, the need for new skill sets, and a fundamental shift in how retailers view their physical assets.
Building an in-store retail media network involves integrating systems like POS, loyalty programs, inventory management, and a new ad tech stack. Retailers need platforms for content management, ad serving, and real-time data processing, utilizing tools such as Apache Kafka and Apache Flink. A common mistake is underestimating integration efforts, as these systems must reliably process thousands of transactions per second without delaying checkout.
To navigate this complexity, many retailers are turning to specialized partners who provide an end-to-end solution, bundling the hardware, software, and operational expertise. Key strategies include:
Start with a pilot program in a small number of stores to test the technology and measure ROI.
Prioritize solutions with robust APIs to ensure seamless integration with existing retail systems.
Focus on a modular architecture that allows for easy upgrades and the addition of new capabilities over time.
The initial expense for an in-store retail media network can be significant, covering hardware, software licenses, installation, and maintenance. Retailers should justify this investment with a clear business case. The digital signage market, essential to in-store media, is expected to grow from USD 25.4 billion in 2024 to USD 43.1 billion by 2032. Although potential media sales revenue is high, retailers need to accurately predict ad demand from CPG partners to ensure a positive return.
Learn more about the growth of the real-time analytics market that powers these systems.
Successfully launching a retail media network requires more than just an IT project; it requires a new way of thinking. Retailers need to build a media sales team capable of working with CPG brands and media agencies. This involves new skills in ad sales, campaign management, and data analytics.
The most successful retail media networks operate like media companies, not like traditional retailers. This cultural and organizational shift is often the biggest challenge.
For CPG brands, the challenge is learning how to buy and measure this new type of media effectively. Their marketing teams need to develop expertise in retail media to ensure they are getting the most value from their ad spend.
As CPG brands and retailers explore the world of in-store retail media, several common questions naturally arise. Here are clear, concise answers to some of the most frequent inquiries.
Although related, shopper marketing and retail media are distinct.
Shopper marketing encompasses understanding consumer behavior to influence purchase decisions, covering aspects like packaging and promotions.
Retail media, a subset of this, involves retailer-owned advertising channels, such as in-store networks, using first-party data for targeted ads.
You don't need the scale of Walmart to get started. Smaller and regional retailers can effectively launch their own media networks by leveraging turnkey solutions from technology partners. These partners often provide the hardware, software, and even media sales support as a managed service.
Cloud platforms from providers like Amazon Web Services (AWS), Google Cloud, or Microsoft Azure have also made the underlying technology more accessible and affordable on a pay-as-you-go basis.
The best advice is to start with a clear, focused pilot. Choose your highest-traffic stores and a key CPG partner to prove the concept. A successful pilot provides the data and the business case needed to justify a broader rollout.
For more answers to common questions, feel free to explore our full list of frequently asked questions.
Ready to turn your retail space into a media powerhouse? Intouch.com provides an AI-driven retail media network that delivers personalized ads to shoppers at the exact moment of purchase, driving measurable sales lift for CPG brands and creating a new revenue stream for retailers.
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