What are the forces driving retail media’s 56% YoY surge in digital ad spends?

Retail media is no longer just about closing the sale; it is fast becoming one of the most powerful storytelling environments in India’s digital advertising ecosystem. As commerce and media converge within unified retail platforms, brands are discovering new ways to connect media investments with measurable business outcomes through full-funnel advertising solutions powered by vast pools of first-party shopping and streaming data. This shift marks a decisive move away from retail media’s traditional performance-only role.

Today, e-retail platforms increasingly function like full-fledged media networks, offering real-time visibility into how consumers discover, engage and purchase. Brands can now craft narrative journeys within the same environment, guiding users from discovery and content-led education to social validation and personalised offers, while benefiting from closed-loop measurement that enables granular creative, audience and format optimisation across the funnel.

At the same time, retailers are expanding their creative capabilities through content studios, creator partnerships, live commerce formats and shoppable video, significantly elevating the storytelling potential of commerce spaces. For brands, the challenge is to move beyond price-led messaging and build distinctive worlds within retail contexts using modular creative tailored to micro-segments. 

According to the dentsu–e4m Digital Advertising Report 2026, ad spends on e-retail platforms reached ₹17,601 crore by the end of 2025, accounting for 24.58% of total digital media spends, while registering a sharp 55.86% year-on-year growth. The scale of this growth signals deeper structural shifts in how brands plan, activate and measure digital media in India.

Read what the dentsu-e4m report says about the retail media sector 

The report attributed the full-funnel strength of e-retail advertising to three key structural pillars. The first is real-time first-party consumer intelligence derived from shopping behaviour, browsing patterns and content consumption, enabling sharper targeting, contextual relevance and continuous campaign optimisation. The second pillar is the emergence of integrated media suites that combine owned video and audio streaming inventory, influencer-led social amplification, open-web programmatic access and marketplace commerce touchpoints within a single ecosystem—breaking traditional silos between content, media and commerce. The third pillar is a holistic measurement architecture that stitches together brand health metrics, mid-funnel engagement signals and conversion data across both online and offline environments. This closed-loop measurement capability allows advertisers to move beyond vanity metrics and directly link media investments to measurable business outcomes.

Explaining the strong year-on-year momentum, Vijay Shenoy, Deputy Vice President at LS Digital Group, said retail media’s advantage lies in its proximity to purchase intent. “E-retail media shows up when people are already in shopping mode. It sits closer to the decision than most other media channels, operating at the intersection of intent, inventory and influence,” he said.

Shenoy added that the next phase of growth will be driven by repeat-led commerce, particularly in categories such as groceries, household essentials and wellness. “As more Indians shop online regularly, repeat behaviour gives brands a reliable environment to stay visible. Convenience, wider assortments, timely delivery and competitive pricing, is making e-commerce a default choice rather than a fallback,” he noted.

From a data and measurement perspective, marketing strategist Vejay Anand, Senior Advisor at business management consultancy Prequate, pointed to the growing role of first-party intelligence. “Retail media enables highly accurate targeting using real-time first-party data derived from actual shopping activity, browsing journeys and content engagement. This allows brands to refine audience segmentation and optimise campaigns dynamically based on real consumer behaviour rather than inferred signals,” he said.

Anand added that a key driver behind the surge is the fundamental repositioning of e-retail platforms themselves. “What were once viewed largely as last-mile sales channels are now being architected as end-to-end consumer experience environments, supporting discovery, storytelling, consideration and purchase within a single ecosystem,” he said. Retail media also reduces historical measurement gaps by directly connecting advertising investments to actual sales outcomes, enabling clearer ROI visibility, experts told e4m.

Industry experts further highlighted that retail media environments now combine previously fragmented touchpoints, including video, search, social engagement and commerce interactions, within a single platform. This integration allows brands to maintain continuity in messaging while guiding consumers seamlessly from awareness to purchase, with far greater visibility into downstream business outcomes.

Modern e-retail platforms are also expanding advertising supply rapidly, moving well beyond sponsored product listings. Today’s marketplaces offer integrated media suites that include proprietary streaming content, creator and influencer collaborations, 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 multiple factors have contributed to the category’s rapid rise. “The channel itself has grown significantly, especially at the awareness stage, which makes the entire funnel cycle easier. Brands now get access to strong first-party data and very high purchase intent, making these platforms extremely attractive for investment,” she said.

She added that improvements in cataloguing, user experience and integrated data capabilities have strengthened the value proposition. “For emerging brands, doing business on retail media platforms is far easier than building and scaling their own websites or managing multiple ad formats. Product discovery is already built into the platform, and the overall ease of operating and advertising has improved significantly,” Bisht noted.

Retail media’s evolution from a bottom-funnel performance channel to a full-funnel medium is now well underway. 

According to Shenoy, brands have begun reassessing the economics of waiting for last-mile intent. “Retail media has moved beyond pure performance. It’s now also about visibility, recall and staying top-of-mind. Waiting only for bottom-funnel intent was becoming expensive, so brands are now creating demand upstream on e-retail platforms,” he said.

Shenoy added that advertisers are increasingly front-loading intent using display, video and sponsored discovery formats well ahead of peak shopping moments. “Smart brands are balancing both, building demand early and capturing it later, all within the same ecosystem,” he said.

Bisht echoed this view, noting that platforms now offer far greater visibility across the consideration journey. “Brands have moved from a conversion-only mindset to a full-funnel approach because retail platforms now provide 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 far easier,” she said.

Retail Media 2.0: Moving up the funnel

This phase of evolution, often described as Retail Media 2.0, marks a decisive move beyond bottom-funnel tactics. By integrating premium video, streaming entertainment and display formats into shopping environments, retail media networks are extending their influence into awareness and consideration stages.

For digital-first brands that have historically over-indexed on search and retargeting, this shift presents a critical opportunity to invest in sustainable brand building without sacrificing performance accountability. However, it also requires internal change, with organisations aligning trade marketing, ecommerce, media, CRM and brand teams around a unified audience view.

With nearly a quarter of India’s digital ad spends already flowing into e-retail platforms, the dentsu–e4m report underscores that retail media is no longer an emerging trend. It is fast becoming a foundational pillar of India’s digital advertising economy.

As Anand pointed out, advertisers are increasingly treating e-retail platforms not merely as distribution channels, but as strategic media partners operating at the intersection of data, content, commerce and measurement, a shift that is set to redefine digital planning models in the years ahead.