Retail media is not just growing. According to the IAB UK, it is fundamentally reshaping how media investment works. In this month's #AskVector, we break down the latest projections from the IAB UK Futurescape and Compass reports, explain why the growth is structural rather than cyclical, and set out what it means for brands planning their Amazon strategy in 2026 and beyond.

The numbers

The Futurescape forecasts are developed by economist and media analyst Dr Daniel Knapp, using statistical modelling built on IAB UK and MediaSense Digital Adspend data alongside IAB and MTM Compass data. They represent the most rigorous independent projection of the UK retail media market currently available.

UK retail media spend is forecast to surpass £6.6bn in 2025, outpacing overall digital growth, and projected to reach £8.6 bn by 2030, growing at an average annual rate of 17%.

Annual growth rates are peaking in 2025 and 2026 at 30%, set to steady to 8% annual growth by 2030 as the market matures. To put the overall trajectory in context, retail media is growing at nearly four times the rate of the overall UK ad market.

This is not new budget

The most important contextual point the data supports is that retail media growth is not primarily being funded by new marketing budget. It is being reallocated from paid search, social and traditional media.

The shift reflects a fundamental change in how brands are evaluating channel performance. Paid search has long been the dominant performance channel, but its measurement frameworks are increasingly strained by privacy changes and the blurring of search and shopping intent. Social provides reach but has historically struggled to demonstrate the closed-loop revenue connection that senior stakeholders demand. Traditional media offers scale but limited accountability.

Retail media addresses the accountability gap directly.

Why it is happening: retail media closes the loop

The core reason for retail media's sustained growth is measurement. The chain from media exposure to click to purchase is traceable, attributable and directly connected to revenue in a way that very few other advertising environments can match.

Retailers are becoming media owners in their own right, monetising audiences through on-site, off-site and in-store ecosystems that connect every stage of the shopper journey. The result is a closed measurement loop that traditional media planning has never been able to offer: an advertiser can place media, observe the click behaviour that follows, and measure the purchase that results, all within a single data environment.

Greater accountability drives greater investment. As measurement improves and attribution becomes more reliable, the business case for increasing retail media budgets strengthens. This is a self-reinforcing dynamic, not a temporary spike.

The bigger trend: all media is becoming retail media

The IAB UK Futurescape identifies "all media is becoming retail media" as one of the eleven key shifts that will define advertising by 2030. By 2030, platforms, publishers and broadcasters will be able to offer end-to-end advertising solutions as they partner, collaborate and in some cases merge with retail media platforms. This shift will mark the end of traditional media funnels and the beginning of a more fluid, dynamic approach to reaching consumers across multiple touchpoints.

Commerce data is fuelling media decisions. Media investment is driving transactions. The distinction between brand advertising and performance advertising is dissolving as the tools to connect awareness to purchase become standard rather than exceptional.

The implication for planning is significant. A media strategy built around the assumption that brand and performance budgets operate in separate channels will become progressively less effective as those channels converge.

Where Amazon is structurally advantaged

Amazon's advertising infrastructure is built for exactly this shift. The combination of search, DSP and video within a single platform, underpinned by first-party shopper data and end-to-end measurement through Amazon Marketing Cloud, mirrors the integrated environment that the IAB Futurescape describes as the future direction of all media.

Amazon is not a retailer adding media capabilities to its core business. It is a media platform in which commerce data, advertising infrastructure and content inventory operate as an integrated system. Retailers are now prioritising high-return formats like sponsored products, while expanding their offerings to include video, social, and even connected TV, helping to drive further investment from media budgets, not just trade or shopper marketing budgets. Amazon's ecosystem spans all these formats under one buying and measurement infrastructure.

What winning brands are doing differently

The brands performing strongest in this environment share a common characteristic: they have stopped treating Amazon as a performance channel and started treating it as a full-funnel media platform with its own audience strategy, content architecture and measurement framework.

That means full-funnel planning across search, DSP and video rather than isolated campaign types. It means integrating retail and media budgets rather than managing them separately against different KPIs. And it means smarter allocation across formats based on where Amazon's data shows audiences are most receptive, rather than defaulting to the formats most familiar from other channels.

The IAB projections confirm that the window for first-mover advantage is narrowing. The brands that build this infrastructure now will be better positioned as retail media's growth peak in 2025 and 2026 passes and the market consolidates.

Want to understand how the retail media growth opportunity applies to your brand? Talk to the Vector Retail Media team.

"Amazon is not a retailer adding media capabilities to its core business. It is a media platform in which commerce data, advertising infrastructure and content inventory operate as an integrated system."