Retail Media Networks Hit $62B in U.S. Ad Spend as Amazon’s Share Slips

The U.S. retail media market crossed $62 billion in annualized ad spend in Q1 2026, according to a Forrester Research report published this week — a 31% year-over-year jump that is fundamentally reshaping where DTC brands and third-party marketplace sellers allocate their performance budgets. The headline number, however, masks a structural shift that is quietly rattling Amazon’s grip on the category: the e-commerce giant’s share of total retail media spend has fallen from 76% in 2023 to an estimated 68% in mid-2026, as Walmart Connect, Instacart Ads, and Target’s Roundel collectively absorb a growing slice of budgets that were once considered Amazon-only territory.

For Shopify-native DTC brands that historically kept retail media at arm’s length, the data is forcing a strategic rethink. Agencies that spoke with Ecommerce Times this week say client inquiries about Walmart Connect onboarding are up sharply since January, and several mid-seven-figure brands have quietly begun shifting 10–15% of their Amazon Sponsored Products budgets into off-Amazon retail media tests.

What Is Driving the Acceleration in Retail Media Spend?

Three forces are converging. First, the deprecation of third-party cookies — largely complete across Chrome by Q4 2025 — pushed brand advertisers toward first-party data environments, and retail media networks sit on some of the richest purchase-intent data in existence. Second, tariff-driven margin compression in categories like consumer electronics, home goods, and apparel has made cost-per-acquisition discipline non-negotiable, and closed-loop attribution inside retail media networks remains more reliable than most open-web alternatives. Third, the platforms themselves have matured: Walmart Connect launched its DSP-connected offsite audience extension in February 2026, and Instacart Ads rolled out a full-funnel video placement unit in March.

“We’re seeing brands that spent 90 cents of every retail media dollar on Amazon two years ago now running serious tests on Walmart Connect and Roundel. The attribution story is getting good enough that CFOs aren’t pushing back anymore.” — Melissa Burdick, co-founder and president of Pacvue

Pacvue, the enterprise retail media management platform, reported that its managed-spend clients increased Walmart Connect allocations by 44% in Q1 2026 compared to Q1 2025. That tracks with Walmart’s own disclosure in its May earnings call, where Walmart Connect was cited as one of the company’s fastest-growing profit pools, with U.S. ad revenue up 29% year-over-year.

How Is Amazon Responding to Shrinking Market Share?

Amazon is not standing still. The company’s advertising business — which crossed $56 billion in annual revenue in 2025 — has been aggressively expanding its DSP into streaming and off-Amazon placements via Prime Video and Amazon Publisher Services. At its unBoxed conference last fall, Amazon announced deeper integration between its Sponsored Products console and its AI-powered creative studio, allowing sellers to auto-generate image and video ad variants at scale without incremental production cost.

But some sellers say Amazon’s own platform complexity is part of the problem. Sponsored Products floor bids introduced earlier this year raised baseline CPCs in competitive categories, and several mid-tier sellers report that their return on ad spend on Amazon Sponsored Brands has deteriorated meaningfully since late 2025.

“Amazon keeps raising the floor while the ceiling stays the same. At some point the math just works better somewhere else, and that somewhere else is getting real fast.” — Ryan Burgess, director of marketplace strategy at Tinuiti

Tinuiti, which manages over $4 billion in annual digital media spend, has publicly positioned itself as platform-agnostic in retail media, and Burgess says that message is resonating differently now than it did 18 months ago.

Which Retail Media Networks Are Gaining the Most Ground?

According to the Forrester data, the fastest-growing retail media networks by year-over-year spend increase are:

• Walmart Connect: Up 41% YoY, now estimated at $4.8B annualized U.S. spend
• Instacart Ads: Up 36% YoY, driven by CPG brands reallocating trade promotion budgets
• Target Roundel: Up 28% YoY, with particular strength in beauty, apparel, and baby categories
• Kroger Precision Marketing: Up 22% YoY, holding steady in grocery-adjacent categories
• Chewy Ads: Up 19% YoY, emerging as a meaningful channel for pet brands with a D2C history

The Chewy figure is notable because it signals that vertical retail media networks — platforms with narrow but deeply loyal shopper bases — are gaining credibility with brands that were previously skeptical of anything outside the Amazon/Walmart duopoly.

What Does This Mean for DTC Brands That Sell Directly on Shopify?

The implications for pure-play DTC operators are more nuanced. Brands that do not carry product on Walmart.com or Target.com cannot directly access Walmart Connect or Roundel’s onsite placements — but offsite audience extensions are changing that calculus. Walmart Connect’s DSP now allows brands to buy Walmart shopper audiences for display and video placements across the open web, regardless of whether those brands sell on Walmart Marketplace.

Several Shopify-first brands are already running Walmart Connect offsite campaigns and driving traffic directly to their owned storefronts. The cost-per-click tends to run 15–25% below comparable Google Display Network placements in categories like home décor and pet supplies, according to agency buyers who shared data with Ecommerce Times on background.

“We ran a 90-day test for a seven-figure cookware brand — pure Shopify, never sold on Walmart — using Walmart Connect offsite audiences. ROAS came in at 3.2x against a Google Shopping benchmark of 2.6x in the same window. That kind of delta gets attention in a budget meeting.” — Jordan Fried, VP of growth at Brainlabs North America

Brainlabs has been among the more vocal agency voices pushing DTC clients toward retail media diversification, and Fried says the firm is now building dedicated retail media practices for mid-market DTC accounts that previously had no presence on these networks.

Are There Risks in Diversifying Away From Amazon Advertising?

Concentration risk cuts both ways. Sellers who move budget off Amazon without maintaining minimum spend thresholds have in some cases seen organic ranking deterioration — Amazon’s A10 algorithm continues to treat paid and organic signals as interrelated. Agencies advise against dropping Amazon advertising spend below a category-specific floor without modeling the organic rank impact first.

There are also measurement gaps. Walmart Connect’s attribution window and view-through modeling differ from Amazon’s, making cross-platform ROAS comparisons difficult without a neutral measurement layer. Platforms like Northbeam, Triple Whale, and Rockerbox have all released Walmart Connect integrations in the past six months, but sellers report that the data is still less clean than Amazon’s natively reported metrics.

Instacart Ads presents a separate challenge: the platform’s shopper base skews toward grocery pickup and delivery use cases, which limits its utility for non-CPG categories. Brands in apparel, electronics, or home furniture that have experimented with Instacart placements generally report weaker results than CPG peers.

What Should Sellers and Agencies Do Right Now?

The operational playbook emerging from agency conversations and the Forrester data points toward a few concrete steps for operators looking to capitalize on retail media diversification without over-rotating:

• Audit category fit before platform fit. Walmart Connect overperforms in grocery, home, pets, and baby. Roundel overperforms in beauty, apparel, and seasonal. Match the channel to your category before committing test budgets.
• Start with offsite DSP placements if you’re a Shopify-native brand without Walmart or Target distribution. The audience data is the asset — not the onsite shelf placement.
• Install a neutral attribution layer (Northbeam, Triple Whale, or Rockerbox) before running cross-platform comparisons. Platform-reported ROAS figures are not comparable across Amazon, Walmart Connect, and Google without normalization.
• Set a floor on Amazon Sponsored Products spend before reallocating budget. Model organic rank sensitivity in your top-revenue ASINs before touching that line item.
• Negotiate managed service SLAs carefully. Walmart Connect’s self-serve interface remains less mature than Amazon’s console, and managed service minimums — typically $50,000 per quarter — put it out of reach for smaller operators without agency support.

The broader picture is that retail media is no longer a synonym for Amazon Advertising. At $62 billion and growing at roughly 30% annually, the category is large enough to sustain a genuine multi-platform ecosystem — and the brands and agencies that build the operational muscle to run across three or four networks now will have a structural advantage as CPCs on Amazon continue their upward march. For operators still treating retail media as an Amazon-only line item, the Forrester numbers are a meaningful warning.