2025 Retail Predictions
2024 shaped up to be a big, sometimes unpredictable year in advertising, one full of changes and new ideas. There were many external factors that influenced consumer behavior and how marketers approach an evolving customer journey. There was a lot of economic uncertainty, a highly anticipated and influential U.S. presidential election, an aging demographic of consumers in Gen Z who garner an increasing amount of spending power and influence, technological advancements, looming cybersecurity threats, and the continued decline in what was once the center of our culture: linear TV.
So much change has pushed the industry forward and proliferated various industry trends such as artificial intelligence, connected TV (CTV), store digitization, self-serve media solutions, personalization and the need for true omnichannel experiences.
We reached out to a variety of industry professionals, experts and marketers to share their predictions for 2025 and what they’re flagging as the next big things in retail.
The Future of Retail Media
Retail media is quickly emerging as the new center of the advertising universe and will surpass linear TV in spending next year. It’s even being redefined by many as “commerce media” instead. By 2028, it will triple, reaching $130 billion, a $75 billion increase from 2024, according to some estimates. Of that $75 billion, in-store retail media is expected to make up only a small portion — $1.1 billion.
“The rapid growth [in retail media] reflects its potential to reshape traditional advertising channels, especially search, which will see stagnating growth,” Adam Roodman, general manager of Yahoo DSP, told P2PI. “Advertisers will leverage enhanced measurement and synchronization across platforms to refine targeting and personalization strategies. However, questions around integrating retail media with broader campaigns, managing reach and justifying premium pricing will demand industry-wide innovation and collaboration to unlock its full potential.”
“Data strategy will continue to accelerate, with a next-generation approach to negotiations between retailer media companies and CPG manufacturers, diving deeper into data, analytics, audience targeting and measurement strategies,” Heather Campain, VP of CPG growth strategy at Epsilon, told P2PI. “Additionally, I expect personalization to shift from being a buzzword to a foundational infrastructure that can support real-time relevance, rather than focusing on one-to-one communication. Finally, given the ongoing industry consolidation and uncertainty in the macroeconomic climate, adaptability will become increasingly crucial for brands to navigate these changes successfully.”
“We’re calling 2025 the year of self-serve in retail media,” Drew Cashmore, a former Walmart Connect executive and head of strategy at Vantage, told P2PI. “Research shows that individual advertisers can typically manage media buying across only four to five retailers, which may hold true for individual media buyers. However, most major advertisers and retail suppliers have dedicated teams to support a larger number of retail partners. Self-serve tools have the potential to transform retail media. … By reducing barriers to entry and maximizing efficiency, these tools can drive the next phase of retail media growth.”
“We all know the challenges with too many retailers making it cumbersome for brands to manage their RMN spend across hundreds of networks," Joe Doran, chief product officer of Epsilon, told P2PI. “To combat this, I believe we'll see more aggregation and syndication among the small to mid-sized retailers to form marketplaces that compete at scale and performance with the heads of the retail media networks.”
“With new retail media opportunities, smaller retailers will increasingly use loyalty programs as an entry point into this high-growth channel,” Regina Ye, CEO and co-founder of Topsort, told P2PI. “Loyalty data provides them with a way to create personalized ad experiences, which can attract brand partnerships and drive ad revenue without heavy technology investment. This trend will level the playing field, giving smaller retailers an effective, scalable way to monetize their media presence.”
Ye added: “Super-apps will gain a foothold in the retail media space, presenting brands with highly integrated ad opportunities.”
"Retail media isn't just a new revenue stream," Evan Bowen, chief business officer at Placements.io, told P2PI. "It's transforming how retailers operate. Retailers are not setup to operationalize ad sales, from sales teams to planning and trafficking, to billing and invoicing. This is a whole new ballgame. Success in 2025 will depend on how well retailers can quickly gain the skills and tools to serve a complex and growing market opportunity successfully."
“In 2025, I foresee advertisers aligning retail media measurement with their business objectives beyond ROAS,” Harvey Ma, VP and general manager of Sam’s Club Member Access Platform (MAP), told P2PI. “The industry is already recognizing the shortcomings of using ROAS as the indicator for success. The need to leverage new capabilities that can better model future, long-term success and overall customer loyalty will be a significant pivot from historically based, purchase data being used as the north star to measure campaign outcomes.”
Store Experience & Digitization
"2025 is the year that physical stores will begin to emerge as the next major media channel,” said Andrew Lipsman, founder and chief analyst at Media, Ads + Commerce. “As store digitization proliferates, the aura around in-store retail media will finally convince brands and agencies to carve out a budget for this channel. And the rise of experiential retail media will add another layer that elevates CX with more dynamic, engaging and interactive shopping experiences."
“In 2025, in-store advertising will improve customers’ shopping experience with targeted activations that merge the best of in-store and digital,” said Sam’s Club MAP’s Harvey Ma. “We know retailers are in the early stage of using technology to create frictionless, omnichannel shopping experiences for customers. I expect retailers to lean into advertising that will add to the customer experience and bring digital targeting and measurement methods in-store.”
“The rush to digitize stores is revealing critical challenges for retail media networks: managing inventory and measuring physical and digital touchpoints as one unified system,” Placements.io's Evan Bowen said. “Success won't be about having screens and sensors in stores. It will be about the tools and planning infrastructure to coordinate omnichannel campaigns while delivering the measurement brands expect from digital.”
CTV
“YouTube is set to dominate the CTV space in 2025, leveraging its content library, innovative ad formats and data-driven targeting,” MobileFuse founder and CEO Ken Harlan told P2PI. “This makes sense as YouTube reaches 150 million monthly users, and data shows the platform accounts for 8.1% of all traffic on TV screens, which is more than Netflix (6.9%), Hulu (3.3%), and Prime Video (2.8%). Its mix of professional, creator-led and livestreamed content appeals to diverse demographics, positioning YouTube as a key destination for viewers. As younger generations increasingly stream YouTube on TV screens and subscription services like YouTube Premium grow, the platform's hybrid model offers advertisers scale and flexibility, outperforming traditional streaming competitors.”
“Interactive and shoppable ads are set to grow in popularity on CTV platforms, allowing viewers to engage directly with ads by purchasing products or participating in interactive content,” added Digital Remedy’s Jeremy Haft. “This shift will create more immersive and engaging experiences, enabling advertisers to drive immediate action and enhance the overall effectiveness of their campaigns.”
AI
“Next year, as well as AI-driven conversational search and product selection capabilities for e-commerce, we can reasonably expect to see AI-powered data analytics used to create tailored experiences that surprise and delight shoppers,” Brian Lloyd, chief platform officer, Apply Digital, told P2PI. “So for instance, dynamic, individualized storefronts and personalized homepages could start to become the norm as the year progresses.”
“The rise of AI agents could profoundly disrupt advertising,” Jason Goldberg, chief commerce strategy officer at Publicis Groupe, told P2PI in an interview last month. “Today, much of advertising focuses on capturing consumer attention and targeting buying intent through lower-funnel tactics, such as search ads and retail media. But what happens when a consumer delegates pantry replenishment to an AI agent instead of searching for peanut butter on Instacart? Where does the peanut butter advertiser place its ad in that scenario?”
Goldberg added: “AI agents will likely reduce explicit product searches and shift purchasing toward implicit, needs-based fulfillment. This could decrease the number of impressions available for retail media network advertisers. With more persistent product and brand preferences, the first purchase could become a high-stakes, winner-take-all scenario for advertisers.”
“AI isn’t just reshaping shopping – it’s transforming the back-end of retail media networks,” Placements.io's Evan Bowen said. “Forget flashy shopping assistants; it’s AI-powered tools that empower advertisers to recommend new campaigns based on historical performance and help fine-tune campaigns across channels.”
“We’ll see some larger e-commerce businesses start taking their first steps towards building experiences that don’t just cater to humans,” Scott Michaels, chief product officer, Apply Digital, told P2PI. “This will mean two tiers of e-commerce, one for humans who care about ‘softer’ user experience factors and recommendations, and one for bots. The customer journey for the latter will be much more binary, and designed purely as a fast-track to sale."
Data, Third-Party Cookies & the Evolution of Google
“Google's pivot to AI-powered search, led by Gemini AI, is altering the digital landscape and how consumers rely on search,” MobileFuse's Ken Harlan told P2PI. “Once the main driver of website traffic, Google and other platforms now deliver direct answers within search results, reducing the need for users to visit external sites. This shift will continue, and ultimately challenges the traditional web traffic model."
Harlan added: "We’ll see Google caring less about the open web, which they were the gateway to — as a result, marketers need to understand the audience size on the web has plummeted and will need to reassess their ad strategies.”
“If Google were to sell Chrome, it could revolutionize how consumers discover, research and purchase products,” Sherry Smith, executive managing director of the Americas at Criteo, told P2PI. “This paradigm shift would empower retailers to harness advanced technologies like AI and performance media, enabling more personalized and seamless shopping experiences and redefining the traditional path to purchase. … Such transformative changes could reshape the retail landscape, unlocking new paths for growth and engagement.”
“As third-party cookies decline, first-party data — such as purchase history and consumer behavior — will become increasingly valuable for advertisers,” Jeremy Haft, CRO at Digital Remedy, told P2PI. “Retailers, in particular, will leverage this rich, actionable data to create precise ad targeting strategies, optimizing campaigns and driving better performance. The need for scale and consolidation will grow, as the market becomes saturated by smaller retail media networks.”
Sustainability
“On a federal level, U.S. regulation and focus on sustainability will slow down or even reverse,” said MobileFuse’s Ken Harlan. “But, that makes it more important to focus on. This is, and will continue to be, an extremely important topic — we’ll see agencies and brands try and counterbalance the lack of federal requirements with a push of self-regulation. When sustainability comes back in focus, companies will either be ready or they will be so far behind they will have difficulty catching up. Also, it’s worth flagging that the rest of the world will continue to treat this as an important focus.”
Other trends to watch in 2025:
- The global gaming market will amount to $503.14 billion U.S. dollars annually in 2025, up from $396 billion in 2023, according to Statistica. Platforms like Twitch, YouTube and TikTok are at the center of the gaming industry.
- Short-form videos like TikToks, Instagram Reels and YouTube Shorts will remain popular.
- Consumers plan to rein in spending next year, with 82% of Millennials leading the charge on financial restraint, per a recent study. Most Boomers, on the other hand, are planning no cutbacks.
- Innovations such as smart carts for faster checkouts and AI integration for personalized suggestions are set to grow.