What’s powering retail media’s 56% year-on-year jump in digital ad investments?

Retail media is no longer confined to sealing the transaction; it is rapidly emerging as one of the most influential storytelling arenas in India’s digital advertising landscape. As commerce and media blend inside unified retail platforms, brands are uncovering fresh ways to tie media spending to measurable business results through full-funnel advertising solutions fuelled by extensive pools of first-party shopping and streaming data. This evolution represents a clear departure from retail media’s earlier performance-only positioning.

Today, online retail platforms increasingly operate like comprehensive media networks, providing real-time insight into how consumers discover, interact and buy.

Brands can now design narrative pathways within the same ecosystem, leading users from discovery and content-driven education to social proof and personalised deals, while gaining from closed-loop measurement that allows detailed optimisation of creatives, audiences and formats across the funnel.

Simultaneously, retailers are broadening their creative strength through in-house content studios, creator collaborations, live commerce formats and shoppable video, greatly enhancing the storytelling capacity of commerce-led spaces. For brands, the task is to move past price-focused communication and build distinctive brand worlds within retail environments using modular creatives tailored to micro-segments.

According to the dentsu-e4m Digital Advertising Report 2026, advertising spends on e-retail platforms touched Rs 17,601 crore by the close of 2025, representing 24.58% of overall digital media spends, while recording a steep 55.86% year-on-year increase. The magnitude of this expansion signals deeper structural changes in how brands strategise, execute and evaluate digital media in India. The report credited the full-funnel effectiveness of e-retail advertising to three primary structural pillars. The first is real-time first-party consumer intelligence drawn from purchase behaviour, browsing trends and content interaction, enabling sharper targeting, contextual relevance and ongoing campaign refinement. The second pillar is the rise of integrated media suites that merge owned video and audio streaming inventory, influencer-led social amplification, open-web programmatic access and marketplace commerce touchpoints within a single ecosystem—breaking traditional divides between content, media and commerce. The third pillar is a unified measurement framework that links brand health indicators, mid-funnel engagement signals and conversion data across both digital and physical environments. This closed-loop measurement strength allows advertisers to go beyond surface metrics and directly connect media spends to tangible business outcomes.

Explaining the robust year-on-year growth, Vijay Shenoy, Deputy Vice President at LS Digital Group, said retail media’s edge lies in its closeness to purchase intent. “E-retail media appears when consumers are already in buying mode. It operates nearer to the decision point than most other media channels, functioning at the crossroads of intent, inventory and influence,” he said.

Shenoy added that the next growth wave will be fuelled by repeat-driven commerce, especially in segments like groceries, household essentials and wellness. “As more Indians shop online regularly, repeat behaviour provides brands with a dependable environment to remain visible. Convenience, broader assortments, prompt delivery and competitive pricing are turning e-commerce into a default option rather than a backup,” he noted. From a data and measurement lens, marketing strategist Vejay Anand, Senior Advisor at business management consultancy Prequate, highlighted the expanding role of first-party intelligence. “Retail media supports highly precise targeting using real-time first-party data drawn from actual shopping behaviour, browsing journeys and content engagement. This enables brands to sharpen audience segmentation and adjust campaigns dynamically based on genuine consumer behaviour rather than assumed signals,” he said.

Anand added that a major factor behind the surge is the fundamental repositioning of e-retail platforms themselves. “Platforms once seen largely as last-mile sales avenues are now being designed as end-to-end consumer experience ecosystems, enabling discovery, storytelling, consideration and purchase within a single environment,” he said. Retail media also helps close historical measurement gaps by directly tying advertising investments to real sales results, offering clearer ROI visibility, experts told em.

Industry experts further noted that retail media environments now bring together previously fragmented touchpoints, including video, search, social interaction and commerce activity, inside one platform. This integration enables brands to maintain message consistency while guiding consumers smoothly from awareness to purchase, with much stronger visibility into downstream business impact.

Modern e-retail platforms are also rapidly increasing advertising inventory, moving far beyond sponsored product placements. Today’s marketplaces provide integrated media suites that include proprietary streaming content, creator and influencer partnerships, open-web programmatic reach, live commerce and shoppable video.Switch from bottom-funnel to full-funnel channel

Renu Bisht, Founder & CEO of Commercify 360, who works with brands and marketplaces on commerce growth and retail media strategy, pointed out that several elements have powered the category’s rapid ascent. “The channel itself has expanded significantly, especially at the awareness stage, which makes the entire funnel cycle smoother. Brands now gain access to strong first-party data and very high purchase intent, making these platforms extremely compelling for investment,” she said.

she added that enhancements in cataloguing, user experience and integrated data capabilities have strengthened the value proposition. “For emerging brands, operating on retail media platforms is far simpler than building and scaling their own websites or handling multiple ad formats. Product discovery is already embedded into the platform, and the overall ease of operating and advertising has improved substantially,” Bisht noted.

Retail media’s transition from a bottom-funnel performance vehicle to a full-funnel channel is now clearly in motion.

According to Shenoy, brands have begun re-evaluating the economics of waiting for last-mile intent. “Retail media has evolved beyond pure performance. It is now also about visibility, recall and remaining top-of-mind. Waiting only for bottom-funnel intent was becoming costly, so brands are now generating demand upstream on e-retail platforms,” he said.

Shenoy added that advertisers are increasingly pre-loading intent using display, video and sponsored discovery formats well before peak shopping windows. “Smart brands are balancing both—building demand early and capturing it later, all within the same ecosystem,” he said. Bisht echoed this perspective, noting that platforms now deliver far greater transparency across the consideration journey. “Brands have shifted from a conversion-only mindset to a full-funnel strategy because retail platforms now offer integrated data across consideration, add-to-cart behaviour and conversions. In many cases, the entire customer journey can be tracked in near real time, making optimisation much easier, she said.

Retail Media 2.0: Moving up the funnel

This stage of evolution, often labelled Retail Media 2.0, signals a clear move beyond bottom-funnel tactics. By incorporating premium video, streaming entertainment and display formats into shopping environments, retail media networks are extending their role into awareness and consideration phases.

For digital-first brands that have traditionally leaned heavily on search and retargeting, this shift offers a key opportunity to invest in long-term brand building without giving up performance accountability. However, it also demands organisational change, with teams across trade marketing, ecommerce, media, CRM and brand aligning around a unified audience perspective.

With nearly a quarter of India’s digital ad expenditures already directed toward e-retail platforms, the dentsu-em report highlights that retail media is no longer an emerging development. It is quickly becoming a core pillar of India’s digital advertising economy.

As Anand noted, advertisers are increasingly viewing e-retail platforms not just as distribution avenues, but as strategic media partners operating at the convergence of data, content, commerce and measurement—a shift poised to reshape digital planning models in the years to come.