Last week, Amazon announced it would shut down its Amazon Fresh and Amazon Go locations.

While this doesn’t signal a full retreat from physical retail, it does underscore Amazon’s growing emphasis on digital grocery, which has clear implications for its retail media strategy. Instead of prioritizing advertising tied to physical stores, Amazon is doubling down on media formats that can scale well beyond its owned retail footprint.

Out of the box: As nearly all (99%) of Amazon searches show sponsored products, according to 2025 Pentaleap data, Amazon is seeking other places to scale its retail media business. This is increasingly taking the form of off-site media.

• Amazon’s US off-site retail media ad revenues will grow 32.6% this year, making up nearly 70% of total off-site retail media spend, according to a December 2025 EMARKETER forecast.
• That scale reflects strong advertiser demand, as well as Amazon’s ability to activate first-party purchase data well beyond its owned properties.

"Off-site holds a lot of exciting potential because it represents the opportunity for retailers of all sizes to activate the full breadth of their first-party data, free from the constraints of their owned-and-operated channels," said our analyst Sarah Marzano during an EMARKETER webinar.

Video is a key advantage in Amazon’s off-site expansion. Prime Video has become one of the most valuable connected TV (CTV) environments for advertisers, and Amazon has significantly increased available supply through partnerships with Netflix, Disney, and Roku.

Grocery gains: Even so, Amazon’s on-site ecosystem will continue to anchor its retail media business, particularly as the company deepens its investment in digital grocery.

• In 2025, Amazon expanded same-day delivery for fresh groceries to more than 1,000 US cities and towns, with plans to reach 2,300 locations by year’s end.
• At the same time, the retailer has begun testing ultra-fast delivery for fresh groceries and household essentials in select markets, including Seattle and Philadelphia.

As grocery shopping moves online, advertisers are increasing investment in sponsored placements to capture high-frequency, replenishment-driven demand.

• 42% of grocery shoppers plan to shop more online in the next five years, according to a July 2025 survey from EMARKETER and Amazon Ads.
• Groceries overtook fashion as the category with the highest sponsored product coverage across retail sites, with 94% of pages featuring sponsored products, found Petaleap data.

What’s in store: Amazon isn’t abandoning physical retail altogether. The retailer plans to invest more heavily in Whole Foods, including opening more than 100 new stores, as well as launch a nearly 230,000 square foot superstore-style location in a southwest Chicago suburb.

However, physical retail may never be Amazon’s great differentiator. So for now, Amazon is leaning into its core strength: Digital reach at scale.

• The company’s retail media strategy is built around its ability to activate first-party commerce data across a wide range of environments, not just on Amazon.com.
• That position reflects years of investment in an advertising stack designed to extend well beyond its owned properties.

The bottom line: Amazon’s physical reset draws a clearer line around its role in retail media. While some retail media networks may rely more heavily on in-store retail media in the coming year, Amazon’s advantage is rooted in digital shopping at scale and the ability to extend those signals off-site. For marketers, this underscores that retail media isn’t one-size-fits-all: Different networks will win in different ways, depending on where their data and reach are strongest.

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