Olivia McCullagh, Head of Retail Media at IAB UK, writes about the shift in how retailers are monetising physical space – and why this development is so key in the wider evolution of retail media.
Retail media continues to soar. No longer simply a budget line on a marketing plan, it has evolved into something far greater, enabling truly omnichannel brand building campaigns that influence shoppers across the entire journey.
The IAB UK AdSpend report predicts retail media spend will exceed £8bn by 2030, underlining the scale and momentum behind the channel. While the ecommerce landscape continues to evolve, UK retail media networks are now gaining renewed attention for their most traditional and arguably most powerful asset: the in-store environment. Increasingly sophisticated in-store retail media is attracting brand budgets that have historically sat higher up the funnel.
Grocers such as Tesco Media and Nectar360 are well-established in their expansive use of in-store media, including digital screens across store formats, delivering targeted content that inspires shoppers throughout the path to purchase. More recently, department stores including Frasers Group and John Lewis & Partners have begun investing in premium in-store digital media, signalling a broader shift in how retailers are monetising physical space and how brands can show up within it.
The scale of the opportunity is clear. Tesco Media’s Moving Mindsets study found that 71% of shoppers enjoy discovering new brands while shopping, and seven in ten make their final purchase decisions in the moment as they shop. This highlights the power of in-store retail media to influence discovery, consideration and conversion at the most decisive moment when shoppers are already engaged, present and ready to buy.
What full-funnel actually means in practice
For years, retail media has been valued primarily for lower-funnel performance: sponsored products capturing purchase intent, search ads driving conversions, onsite display nudging basket additions. This narrow framing delivered impressive closed-loop attribution but left brand-building potential largely untapped.
Premium in-store environments like John Lewis & Partners’ Bluewater launch in November 2025 demonstrate how physical retail extends the marketing funnel into the store itself. Unlike digital display that reaches shoppers browsing at home, in-store formats engage customers in active shopping mode, able to influence consideration and drive immediate action.
This creates genuine full-funnel capability when combined with existing offsite and onsite inventory. Brands can now reach audiences through connected TV and programmatic display powered by retailer first-party data (awareness), engage them through contextual in-store content as they shop (consideration), and capture demand through sponsored products and search (conversion)—all within a single retail media ecosystem.
The in-store advantage
Physical environments offer something digital channels fundamentally cannot: guaranteed attention from shoppers who have opted into a retail experience and are primed to purchase. There are no ad blockers in the cereal aisle. No scroll past behaviour at the checkout queue. Research indicates that 76% of retail sales still occur in physical stores, making in-store the ultimate “last mile” of customer influence.
But realising this potential requires more than simply installing screens. Effective in-store retail media demands dynamic creative that responds to context, time of day, weather, local events, stock levels; delivering messaging that’s immediate and actionable.
Getting the fundamentals right
For this evolution to deliver sustainable value, three fundamentals must continue to develop:
First, infrastructure. Leading UK retail media networks have already built impressive scale and capability. Tesco Media operates digital screens across thousands of store locations with the ability to target by store cluster, daypart and shopper mission. Nectar and Co-op can align in-store creative with broader campaign messaging and adjust content by region or format. As measurement capabilities linking in-store exposure to sales continue to mature and more retailers adopt similar standards, brands will have the confidence to allocate more substantial budgets to in-store alongside their traditional media investments.
Second, measurement standards. The industry’s increasing focus on incrementality is gaining traction but remains inconsistent across networks. Retailers are investing in robust measurement frameworks that go beyond last-click attribution, but the market would benefit from greater standardisation in how in-store impact is quantified and reported. Extending closed loop attribution rigorously to in-store environments will be critical to justifying premium positioning.
Third, planning integration. Brands have an opportunity now to approach retail media with greater strategic sophistication. That means thinking holistically across onsite, offsite and in-store touchpoints; developing creative specifically tailored to the in-store environment rather than repurposing digital assets: and establishing measurement frameworks that value discovery and consideration alongside conversion.
As retail media matures from a tactical performance channel into a comprehensive marketing platform, the retailers investing in sophisticated in-store capabilities and the brands willing to plan holistically across the entire shopper journey will unlock incremental value that transforms how we think about retail’s role in the marketing mix. The in-store environment completes retail media’s full-funnel promise whilst enabling a creative canvas for brands to play in.
Read more opinion from experts on Retail Media Age.
