If you manage paid media for a fashion brand, you’ve probably noticed something. Reaching the same audiences on Meta, Google and TikTok keeps getting more expensive. Competition for attention is rising, while shoppers increasingly discover and buy products directly through retailer websites, marketplaces and shopping apps.
This is where retail media comes in. Retail media is advertising that retailers and marketplaces sell to brands across digital and physical channels. It uses first-party shopper data to reach consumers closer to the point of purchase.
For fashion brands, this creates an opportunity to reach shoppers who are already browsing, comparing and considering products. However, getting the click is only part of the equation. Product information, size confidence and the overall shopping experience also influence whether that click becomes a sale that stays.
This guide explains how retail media works and where fashion brands can advertise. It also covers how to start with a controlled budget and which metrics matter when measuring actual profitability.
Retail Media at a Glance
- Retail media lets brands advertise through retailers’ own channels and external placements powered by retailer data.
- It includes on-site, off-site and in-store advertising.
- It reaches shoppers using purchase and browsing signals, often close to the point of purchase.
- It complements social and search advertising rather than replacing brand-building investment.
- A practical first test can focus on one network, 5 to 10 products and four to six weeks.
- Product listings, size charts and fit information shape how well advertising traffic converts.
- Measure retained sales, incremental revenue and cost per kept order, not just clicks.
What Is Retail Media and How Does It Work?
Retail media is advertising sold by retailers and marketplaces through their own digital or physical properties, as well as selected external channels. Brands pay to promote products or reach relevant shopper audiences using the retailer’s advertising inventory and first-party data.
Examples include sponsored product placements on Amazon, campaigns across Zalando’s shopping environment and targeted advertising powered by Walmart Connect.
The difference lies in the data and context behind the advertising. Social platforms use signals such as interests, engagement and browsing behaviour. Search engines capture active queries and search intent. Retailers, meanwhile, can also use purchase histories, product interactions and shopping behaviour to understand what consumers are likely to buy.
For example, a fashion retailer could reach shoppers who recently purchased ankle boots and are now browsing winter coats. This makes retail media particularly relevant when brands want to influence product discovery and purchase decisions.
The market is growing, although competition and measurement challenges are also evolving. WARC forecasts that global retail media advertising investment will reach $223.4 billion in 2027, representing 15.2% of worldwide advertising spend (WARC via Campaign).
What Are the Three Main Types of Retail Media?
Retail media generally operates across three environments:
On-site retail media
Advertising displayed on a retailer’s own website or app. Common formats include sponsored products, search placements, category-page banners and product recommendations. For example, a fashion brand can promote its trainers when shoppers search for footwear on a marketplace.
Off-site retail media
Advertising delivered outside the retailer’s own properties. It uses the retailer’s audience data to reach relevant shoppers across external websites, apps and social platforms. This extends campaign reach beyond the retailer’s shopping experience.
In-store retail media
Advertising delivered within physical retail environments. Examples include digital screens, in-store audio, interactive displays and branded experiences. These formats help brands influence shoppers while they browse or make purchasing decisions in-store.
Together, these formats allow brands to reach consumers across different stages of the shopping journey.
What Is the Difference Between Retail Media and Marketplace Advertising?
Marketplace advertising is one of the most common forms of retail media, but the two terms are not interchangeable.
Marketplace advertising generally refers to paid placements within marketplaces, such as sponsored products in search results. Retail media has a broader scope. It can include advertising on retailer websites and apps, off-site placements powered by retailer data, and advertising inside physical stores.
In other words, marketplace ads can be part of a retail media strategy, but retail media is not limited to marketplaces.
How Retail Media Differs from Traditional Paid Media
Retail media complements traditional paid media, but each channel plays a different role in the customer journey.
| Criterion | Social Ads | Search Ads | Retail Media |
| Main context | Discovery and engagement | Active information search | Shopping and product comparison |
| Targeting signals | Interests and behaviour | Search queries and intent | Shopper data and purchase behaviour |
| Main objective | Build awareness and demand | Capture existing demand | Influence product consideration and purchase |
| Typical environment | Social platforms | Search engines | Retailer websites, apps and stores |
| Key metrics | Reach, CPA, ROAS | CPC, CPA, ROAS | ROAS, incremental sales, retained orders |
The Shopper Mindset Is Different
Social platforms reach people while they’re browsing content, often before they have a specific product in mind. Search engines, meanwhile, capture consumers actively researching a product or solution.
Retail media reaches shoppers in a different context. They’re often already browsing product and category pages, comparing prices, styles and features.
Because of this, retail media can be particularly effective closer to the purchase decision. However, its role is not limited to the bottom of the funnel: display and off-site formats can also support awareness and consideration.
Why Product Listings Matter More Than Ever
The advertising format also changes what brands need to prioritise.
On social media, creative content needs to capture attention and build interest. In search, relevance and product information help users find what they’re looking for.
With retail media, however, the product listing becomes a crucial part of the conversion experience. Once shoppers click, product images, descriptions, reviews, size charts and fit information help them decide whether to buy.
For fashion brands, this is particularly important because shoppers cannot physically try on garments or footwear before purchasing online. If a product page cannot answer basic questions about sizing and fit, advertising may generate traffic without generating the expected sales.
How Measurement Changes
Retail media can offer closed-loop measurement, connecting advertising exposure with purchases made within a retailer’s environment. This provides valuable visibility into attributed sales.
However, attributed revenue does not necessarily represent incremental revenue. Some shoppers may have purchased the product even without seeing the advertisement.
There is another important consideration in fashion: returns. A campaign can generate a strong reported ROAS while a significant share of its orders is subsequently returned.
Therefore, brands need to look beyond clicks and attributed sales to understand the actual value of their advertising investment.
Which Retail Media Networks Are Best for Fashion E-commerce?
The right network depends on where your customers shop, which products you sell and the markets you want to reach.
| Network | Best suited to | Advertising formats |
| Amazon Ads | Brands selling basics, footwear, accessories and products at scale | Sponsored Products, Sponsored Brands and display |
| Zalando Partner Marketing Services | Fashion and lifestyle brands targeting European shoppers | On-site placements, audience targeting and off-site campaigns |
| Walmart Connect | Brands selling through Walmart in the US | Sponsored Search, onsite display, offsite and in-store ads |
| Criteo Retail Media | Brands and retailers looking for access to retail media inventory across partner retailers | Sponsored products, display and off-site advertising |
| Department store media networks, such as Nordstrom | Premium brands with established wholesale relationships | Retailer placements and co-created campaigns |
Each network has different eligibility requirements, audiences, formats and commercial conditions. Therefore, brands should evaluate available inventory, fees, targeting options and measurement capabilities before committing their budget.
For example, Zalando is particularly relevant for fashion brands operating in Europe. Its retail media business connects partner brands with a large fashion-focused audience. In its Q3 2026 results, Zalando reported 63.2 million active customers across its platforms (Retail Insight Network).
TikTok Shop is also worth considering for brands with strong social commerce strategies. However, it is better understood as a social commerce and shopping platform rather than automatically classifying every TikTok advertising format as traditional retail media.
How to Test Retail Media on a Small Budget
Moving budget away from Meta or Google without understanding the potential impact can weaken your existing acquisition strategy. Instead, start with a contained experiment that generates enough information to guide future investment.
Here’s a practical approach:
- Choose one network. Prioritise a retailer or marketplace where your products already have reviews, sales history and relevant shopper demand.
- Select 5 to 10 hero products. Focus on healthy margins, strong imagery and sufficient stock across the available size range.
- Start with sponsored product ads. These formats are relatively straightforward to test and generally use cost-per-click bidding.
- Set a fixed budget and timeframe. A four-to-six-week test can provide an initial view of campaign performance, depending on traffic and conversion volume.
- Define success before launching. Establish acceptable acquisition costs, return rates and profitability thresholds before evaluating results.
Before launch, review every product listing. Make sure size charts are complete, fit notes are clear and product imagery communicates how items look on different body types.
For example, notes such as “runs small, we recommend sizing up” can help shoppers understand the fit before purchasing.
Ultimately, your product listing is part of the sales experience. If it cannot answer the question “Which size should I choose?”, paid traffic may leave without converting or generate orders that later become returns.
How Do You Measure Retail Media Performance?
Once your campaign is running, the next challenge is understanding whether it generates profitable sales.
Most teams start with ROAS and CAC. However, these metrics can provide an incomplete picture in fashion e-commerce, particularly when returns and marketplace costs are involved.
What Is Retail Media ROAS?
Return on ad spend (ROAS) measures the revenue attributed to advertising relative to the advertising investment.
The formula is:
ROAS = Attributed revenue ÷ Advertising spend
For example, if a campaign generates £20,000 in attributed revenue from £4,000 in advertising spend, its reported ROAS is 5x.
However, this does not necessarily mean that the campaign generated £20,000 in additional revenue. Some of those purchases may have happened organically.
What Is Incremental ROAS?
Incremental ROAS measures the additional revenue generated by advertising compared with what would have happened without the campaign.
The formula is:
Incremental ROAS = Incremental revenue ÷ Advertising spend
Unlike standard ROAS, this metric attempts to isolate the actual contribution of advertising. Holdout tests, control groups and appropriate measurement models can help estimate that incremental impact.
This distinction matters because campaigns can appear highly successful while simply capturing demand that already existed.
What Is Cost per Kept Order?
Cost per kept order measures advertising cost divided by the number of orders that customers keep after returns.
For example, if a campaign costs £2,000 and generates 100 orders, but 20 are subsequently returned, the campaign has 80 kept orders.
Its cost per kept order is therefore £25, rather than £20.
This is particularly useful for fashion brands because size and fit issues can significantly affect the actual value of an attributed sale.
How Do Returns Affect Retail Media Performance?
A sale that is returned does not represent the same retained revenue as an order that the customer keeps. Nevertheless, advertising platforms may continue to report the original attributed conversion.
To compare channels more accurately, fashion brands should consider:
- ROAS net of returns: Revenue retained after refunds and returns, divided by advertising spend.
- Cost per kept order: Advertising cost divided by orders retained after the return period.
- Return rate by channel: The percentage of orders returned from each advertising source.
- New-to-brand customers: The share of customers purchasing from the brand for the first time.
- Contribution margin: Revenue remaining after relevant product, fulfilment, commission and advertising costs.
Compare like with like by using the same time window and product selection. Include marketplace commissions and fulfilment fees where relevant, and distinguish new customers from returning ones.
Once the data is complete, scale campaigns that generate incremental, profitable sales. Don’t simply increase investment in the networks with the highest reported ROAS.
What Are the Benefits and Limitations of Retail Media?
Retail media offers several advantages for fashion brands, but it also introduces challenges that need to be considered before allocating significant budgets.
Main benefits:
- Access to high-intent shoppers: Reach consumers who are already browsing or purchasing within retail environments.
- First-party data activation: Use retailer insights to improve audience relevance and targeting.
- Product visibility: Increase exposure in search results, category pages and other shopping placements.
- Closed-loop measurement: Connect advertising exposure with attributed purchases within participating retail environments.
- Multiple touchpoints: Reach shoppers across digital and physical retail channels.
Main limitations:
- Platform dependency: Brands may have limited control over retailer algorithms, inventory and advertising policies.
- Additional costs: Media investment, marketplace commissions and fulfilment fees can affect profitability.
- Measurement challenges: Attributed sales do not always represent incremental purchases.
- Limited customer ownership: Marketplace transactions may strengthen the retailer relationship more than the brand’s direct customer relationship.
- Competitive pressure: Popular placements and keywords can become increasingly expensive as more advertisers enter the network.
For this reason, retail media should be evaluated as part of a broader acquisition and retention strategy, not as an isolated solution.
Why Does Shopping Confidence Matter in Fashion Retail Media?
Retail media can bring qualified shoppers closer to a purchase, but advertising alone cannot guarantee conversion.
In fashion e-commerce, consumers often hesitate because they are unsure which size to choose or how a garment will fit their body. When product information does not resolve these doubts, even well-targeted advertising can struggle to turn interest into a completed purchase.
This is why size charts, fit notes and reliable size recommendations matter. They help shoppers make more informed decisions, while also supporting a better post-purchase experience.
Technology such as virtual fitting and size recommendation solutions can help fashion brands address these uncertainties during the shopping journey.
Ultimately, the goal is not simply to generate more clicks. It is to turn qualified traffic into purchases that customers feel confident keeping.
Looking for more ways to improve your paid media strategy? Explore our guides to what fashion stores get wrong about CAC. You’ll also find guides on measuring ROAS net of returns, and on improving size charts and fit notes for marketplace listings.
