The global retail media market will reach $200.4 billion in 2026, according to WARC Media's latest forecast. By 2027, it is expected to grow another 11.5% to $223 billion. Those numbers make retail media one of the fastest-growing advertising channels in the world.
But buried in the same data is a warning that deserves more attention than the headline figure: growth is slowing, quality is degrading, and the spectre of what WARC calls "enshittification" is looming over the channel. As the WARC report notes: "Rising ad loads on retail media networks risk creating clutter that both annoys shoppers and dilutes advertiser value."
For eCommerce merchants who have been increasing their retail media budgets year after year, this is the moment to stop and ask a harder question: is this channel still working for you, or are you funding someone else's margin?
What $200 billion actually means
Retail media, the advertising that appears on retailer websites, apps, and connected platforms, has grown from a niche experiment to a pillar of digital advertising in less than a decade. Amazon's advertising business generates tens of billions annually. Walmart Connect grew 43% in Q2 FY27. Every major retailer now operates an advertising network.
The appeal is obvious. Retail media reaches shoppers at the point of purchase, uses first-party transaction data for targeting, and provides closed-loop measurement that connects ad impressions to actual sales. In a post-cookie world, that combination is genuinely valuable.
But the $200 billion figure also represents something else: the point at which retail media has become so large that the incentives driving it may no longer align with advertiser interests.
The enshittification problem
The term "enshittification," coined by writer Cory Doctorow, describes a pattern where platforms start by serving users well, then shift to serving business customers at users' expense, and finally serve only themselves. WARC's application of this concept to retail media is pointed. As retail media networks have grown, many have responded by increasing ad load. The logic is simple: more ad slots mean more revenue. But for shoppers, more ads mean a worse browsing experience. And for advertisers, more ad slots mean more competition for attention on increasingly cluttered pages, which drives up costs while potentially driving down effectiveness.
The core measurement problem
If you sell products through retailers or marketplaces, ask yourself: do you know what your retail media spend actually generates in incremental revenue?
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Attributed revenue is what the retail media network reports. "Your ad was shown, the customer clicked, and they bought the product." That sounds compelling until you realise that many of those customers would have bought the product anyway. They searched for your brand name. They navigated directly to your product page. The ad appeared alongside a purchase decision that was already made.
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Incremental revenue is the revenue you would not have received without the ad. Most retail media networks have no incentive to help you measure this accurately, because the answer might reveal that a significant portion of your spend is taxing existing demand rather than creating new demand.
The peak season budget trap
Every eCommerce advertiser increases their retail media budget for Q4. The retailers know this, and they adjust their auction dynamics accordingly. CPCs rise. Competition intensifies. And the incremental value of each additional pound spent decreases.
The merchants most at risk are those who set their retail media budgets based on last year's attributed ROAS without questioning how much of that return was genuinely incremental.
What smart eCommerce advertisers should do
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Run an incrementality test before peak season: Turn off retail media spend on a subset of products or regions for two to three weeks and measure the impact on sales. If sales barely change, your retail media spend on those products is largely capturing existing demand. If sales drop significantly, the spend is genuinely driving incremental volume.
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Separate brand defence from demand generation: Some retail media spend is defensive, bidding on your own brand terms to prevent competitors from intercepting your customers. This is a legitimate cost of doing business, but it should be categorised separately in your budget, not counted as growth investment.
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Watch your organic visibility: As retail media networks increase ad load, organic product visibility often decreases. If your organic visibility is declining while your paid spend is increasing, you may be in a cycle where the retailer's ad products are gradually replacing free visibility with paid visibility.
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Diversify your retail media mix: The CPCs and competitive dynamics vary significantly across networks. Walmart Connect, Instacart Ads, Criteo-powered networks, and emerging platforms like Tesco Media and Sainsbury's Nectar360 offer different economics and different audiences.
The bigger picture
The retail media market hitting $200 billion is often presented as validation. But market size does not equal advertiser value. The merchants who will get the most value from retail media in Q4 2026 are the ones who understand exactly what their spend generates in incremental revenue and who have the discipline to cut or reallocate the spend that does not.
About On Tap
On Tap is a growth-focused eCommerce consultancy helping mid-market and enterprise merchants make evidence-based advertising decisions. From retail media incrementality testing and budget reallocation to paid media strategy and attribution modelling, On Tap helps merchants maximise the value of every pound spent on advertising.
If you need help auditing your retail media spend for incrementality before peak season, get in touch.
