Today, more than 200 retail media networks (RMNs) dot the industry landscape. Analysts project retail media spending will top $165 billion in 2025, making up more than 20% of total worldwide digital ad spend. 

It’s easy to see why. Retail media networks are digital advertising platforms owned and operated by retailers, enabling brands (often CPG companies) to promote their products to active shoppers. In maintaining their own RMN, retailers can monetize their digital traffic by offering brands a direct line to customers — turning shopper engagement into a new revenue stream.

But while RMNs are valuable tools for deepening relationships with existing customers and boosting basket sizes, they weren’t built to drive new customer acquisition.

Pairing RMNs with additional strategies — like Upside’s personalized promotions — can create a powerful full-funnel growth engine that grows both loyalty and market share.

Why grocers are investing

Indeed, every grocer seems to be thinking about retail media networks, whether they’ve already implemented one or not. Why are these programs gaining such traction? For one thing, shoppers have changed — they’re more value-driven and less loyal than ever before. As they spread their grocery budget around to multiple banners, basket sizes at each individual store continue to get smaller. 

That shift makes revenue harder to maintain. To offset these challenges, grocers are investing in initiatives that meet customers where they are — in the digital spaces where they spend the most time. With loyalty programming, e-commerce initiatives, and increasingly, retail media networks, grocers hope to retain mindshare with their customers and keep them coming back.

RMNs fit into this broader digital strategy by helping grocers monetize existing traffic and shopper attention, offering an immediate revenue boost even as customer loyalty becomes harder to lock in.

Retail media networks: Opportunities and limits

The benefits of retail media networks are significant. RMNs allow grocers to open a new revenue stream by tapping into CPG advertising dollars. They help grow basket sizes by encouraging customers to add new items to their carts. And it’s not just about the revenue lift — the data collected in these programs can also give grocers better insights into how their existing shoppers behave. 

RMNs are most effective with those existing shoppers, especially those who are already digitally engaged — say, by shopping online or browsing offers on the grocer’s app.

However, RMNs have their limits. They primarily nurture existing loyalty members, rather than attracting new shoppers. 

Hear Upside's VP, Grocery Tyler Renaghan discuss the advantages and gaps of retail media networks on Supermarket News' podcast.

That’s a key gap, especially considering the majority of grocery shoppers are uncommitted — prioritizing their own value over loyalty to any particular retailer. They visit up to five different grocery brands every month to provide for their households. While these shoppers are spending time in your stores (and might even belong to your loyalty program), they’re not engaging deeply with your digital programming (or any other retailer’s programming, for that matter). For that reason, a retail media network isn’t the most effective way to reach an uncommitted customer — they might never even see those offers.

Additionally, retail media networks might not provide the kind of data-driven insights grocers expect from their digital channels. For one thing, it’s not always clear to the retailer whether offers in a retail media network are cannibalizing sales they expected to make anyway. That lack of transparency can make it hard to actually judge the effectiveness of the program. 

It’s the reason some people refer to retail media networks as “black boxes” — they provide limited visibility into campaign performance. Are these offers really driving net-new revenue, or just shifting around existing spend?

Finally, the item-level offers in retail media networks are often driven by CPG brand goals, rather than any factors directly related to the grocer. For that reason, these offers generally struggle to create long-term behavior change. Rather, they provide short-term lifts.

Upside fills in the gaps

If retail media networks help retailers to better serve existing customers, grocers have an opportunity to pursue an additional strategy that brings in new and infrequent shoppers. Thousands of retailers partner with Upside to win more visits and greater spend via personalized promotions. 

Thousands of retailers partner with Upside to: 

• Win new and uncommitted customers: Upside’s offers are especially effective at reaching shoppers that spread their trips around. With personalized promotions, we can change their behavior long-term, shifting more trips and more spend to our partners. 

• No assumptions, full transparency: When retailers partner with Upside, they can see who claimed offers at their locations, how often they returned, and how much they spent. Our dashboard provides transparent insight into our platform’s performance, all the way down to the individual level. We measure what happens directly because of our promotion, and we only take credit for incremental profit — delivering proven ROI. 

• Drive greater total spend: Our cash-back offers apply to the full transaction, which encourages shoppers to skip other trips and buy all of their groceries in one place. These promotions give customers the flexibility to purchase the items that best suit their families, rather than just pushing them towards one specific product.

• Create lasting behavior change: Our promotions influence shoppers to become your customers for the long term. For Giant Eagle, a grocer based in Pittsburgh, we drove more visits and spend from cross-shoppers. The brand saw a 3x increase in trip frequency from their least loyal shoppers. Plus, 62% of the new and non-loyalty customers that Upside delivered went on to join its myPerks loyalty program.

Different aims, powerful allies

Retail media networks help grocers to have insightful interactions with current customers. They help grocers monetize existing traffic and digital engagement, and so brands should be doing their due diligence on these programs.

Upside helps you grow market share by reaching the shoppers you don’t yet know. In that way, retail media networks and Upside are not mutually exclusive — they serve different purposes. And when paired together, they can create a powerful, full-funnel growth engine, a whole greater than the sum of its parts. 

Retail media networks and Upside: 1+1=3

Hear from Upside's Tyler Renaghan, VP, Grocery, on the benefits and gaps of retail media networks on Supermarket News' Tech Talks podcast.