The Supermarket of the Future: How Retail Media & Automation Are Rewriting the Rules
German supermarkets, and retailers across Europe, are on the cusp of a dramatic shift. Forget relying solely on product margins – advertising space is rapidly becoming the most profitable revenue stream, and by 2026, it’s projected to surpass traditional sales in importance. This isn’t a distant prediction; it’s a trend already gaining momentum, fueled by the rise of retail media and intelligent automation.
Retail Media: A Billion-Euro Opportunity
Retail media is exploding. Forecasts predict the European market will reach a staggering €25 billion by 2026, more than doubling the €10 billion recorded in 2022 (IAB Europe data). This represents a fundamental restructuring of the retail landscape. The key? Profit margins on advertising – up to 50% – significantly outstrip those typically achieved through product sales.
Supermarkets are now selling advertising space across their digital and physical channels: websites, apps, and increasingly, within the store itself. This is powered by leveraging first-party customer data for hyper-targeted advertising. Brands are willing to pay a premium for direct access to engaged shoppers at the precise moment of purchase consideration.
Did you know? Retail media networks allow brands to target consumers based on their shopping history, demographics, and even real-time in-store behavior.
Who’s Leading the Charge?
Retailers like Rewe, Lidl, Obi, dm, and Douglas are already successfully integrating retail media into their business models. They’re systematically monetizing their digital platforms. However, many others are lagging. As Marlene Lohmann, Head of Marketing at the EHI Retail Institute, points out, “Many other retailers still have catching up to do. The industry is in an early phase, meaning those who enter now can still benefit from pioneer advantages.”
The focus is shifting from simply expanding retail media offerings to seamlessly connecting various channels. The future lies in unifying search, social, retail, and video signals using AI to create comprehensive consumer profiles. Nich Weinheimer, Chief Strategy Officer at Skai, describes this as “programmatic commerce media,” emphasizing the growing importance of accurately measuring incremental sales lift.
Digital Out-of-Home (DOOH) Takes Center Stage
Expect a boom in Digital Out-of-Home advertising within physical stores by 2026. Supermarkets, electronics retailers, and drugstores are dividing their sales floors into advertising zones, utilizing digital displays to drive traffic to online stores and maximize point-of-sale impact.
The interest is particularly strong among SMEs. 70-80% of small and medium-sized businesses with existing out-of-home budgets plan to incorporate DOOH by 2026. Thomas Masek, Co-CEO of crossvertise GmbH, highlights the potential: “DOOH in retail has enormous potential for SMEs – the screen infrastructure is the biggest hurdle, but standardization solves that.” Expanding screen infrastructure beyond major metropolitan areas remains a key challenge.
Standardization: The Key to Scalability
Industry-wide standardization of screens, positioning, and ad formats is crucial. Edeka Nord and Süd, Rewe, Kaufland, and Lidl are collaborating on common specifications to provide advertisers with predictability and scalability. Without standardization, retail media risks remaining a fragmented landscape, hindering growth.
Automation: Boosting Efficiency and the Customer Experience
Alongside retail media, automation and AI are revolutionizing retail productivity. Rewe’s partnership with Trigo to launch a fully automated store in Munich demonstrates this shift. Customers simply take what they need, and automatic checkout via the app streamlines the process.
Pro Tip: Invest in omnichannel solutions like click-and-collect to combine the convenience of online shopping with the foot traffic benefits of physical stores.
Click-and-collect is leading the omnichannel transformation, with Aldi, Lidl, and Rewe significantly expanding their pickup stations. Digital loyalty programs and personalized offers are also vital for retaining customers in the face of online competition.
The Future of Logistics: Last-Mile Delivery
Logistics trends are focused on speed and sustainability. Expect to see pilot projects involving delivery drones, semi-autonomous vehicles, and hydrogen-powered transportation by 2026. These technologies are moving beyond science fiction and into practical application.
The SAP Business Data Cloud is consolidating customer behavior and sales data, providing the foundation for both retail media and optimized logistics. Investing in data infrastructure now is essential for future innovation.
Beyond Products: Eigenmarken & Sustainability
Private label brands are becoming increasingly important, driven by digitalization, sustainability, and data-driven customer engagement. They offer higher margins and foster customer loyalty. Sustainability is no longer optional; it’s a necessity. New EU packaging regulations and increased demand for higher animal welfare standards are reshaping product assortments.
Food trends in 2026 will center around functional beverages, protein-rich snacks, and international specialties. Retailers like Edeka, Rewe, and Kaufland are expanding their offerings in these categories.
What This Means for Your Strategy
The German retail sector is undergoing a transformation. Retail media presents new revenue opportunities with exceptional margins. Automation and AI enhance efficiency and improve the customer experience. Combining these elements creates a competitive advantage that is difficult to replicate.
Investments in technology and infrastructure will pay off in the medium term. Standardization accelerates scalability and reduces complexity. Partnerships with technology providers and startups enable faster implementation than in-house development. SMEs can benefit from managed services and shared infrastructure, reducing the financial burden.
Quality, transparency, and innovation are paramount in product selection. Customers expect sustainable products, convenient services, and personalized offers. Retailers who meet these expectations and monetize their advertising space will create a multi-revenue stream business model, reducing reliance on product margins and increasing resilience.
Reader Question: What are the biggest challenges to implementing a retail media strategy?
The time to act is now. The leaders have established their positions, but the market is still open. Retail media and automation are not futuristic concepts; they are concrete tools for profitable growth. Embrace the available technologies, learn from best practices, and adapt them to your specific needs. The retail landscape of 2026 will belong to those who make the right decisions today.
Frequently Asked Questions (FAQ)
Q: What is Retail Media?
A: Retail Media involves selling advertising space on a retailer’s digital and physical properties to brands looking to reach their customers.
Q: What is DOOH?
A: Digital Out-of-Home refers to the use of digital displays within physical retail locations to advertise products and services.
Q: How can SMEs benefit from Retail Media?
A: SMEs can leverage managed services and shared infrastructure to participate in retail media without significant upfront investment.
Q: What role does AI play in the future of retail?
A: AI is crucial for personalizing customer experiences, optimizing logistics, and automating tasks, leading to increased efficiency and profitability.
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