Retail media just crossed the $62 billion threshold, and the real story isn’t the size of the market — it’s who’s controlling the levers. AI is no longer a feature in retail advertising; it’s the infrastructure.
The numbers from Skai’s 2026 State of Retail Media report are striking. Retail media has become the fastest-growing advertising channel by percentage and the most significant new budget category for CPG and retail advertisers. What changed this year isn’t just the scale — it’s the sophistication. Walmart Connect’s Automated Creative Generation reduced ad production time by 80%. AI-driven targeting is reportedly delivering 6x more ROI. The human hand is lifting off the wheel.
Marketers are shifting their AI use inside retail media dramatically. In 2025, 63% were using generative AI primarily for creative and content production. By late 2026, that’s projected to drop to 42% for creative as campaign management, analytics, and personalization each claim a rising share of AI’s workload. The implication: AI is moving from content helper to strategic operator. The creative brief isn’t the bottleneck anymore — campaign architecture is.
The physical store is the next frontier. With 76% of purchases still happening in person, retailers are racing to install AI-powered digital screens, dynamic audio messages, and connected TV inside stores — content that shifts based on inventory levels, weather, or time of day. Walmart, Target, and a growing roster of specialty retailers are turning their floor space into live media networks. This isn’t ambient advertising. It’s addressable media at the point of purchase.
Meanwhile, zero-click search and AI-generated results are reshaping the top of the funnel. Brands that used to rely on organic discovery are increasingly invisible. Retail media — precisely because it lives inside commerce environments where purchase intent is highest — is absorbing that lost traffic. The brands investing now aren’t just buying ads. They’re building discovery infrastructure for a world where Google and social feeds are no longer reliable distribution channels.
The Next Wave Take
The $62 billion figure will feel quaint by 2028. Retail media is becoming what cable TV was in the 90s: the dominant ad format of its era. The winners will be brands that treat it like infrastructure, not a line item — because the window to establish position inside these networks is narrowing fast.