Why Macy’s Is Partnering With Amazon on Retail Media and What It Signals for the Industry

Retail Media Grows Up

Retail media networks are no longer experimental side businesses. Over the past several years, they have become core revenue drivers for many retailers and an essential line item for brand marketers. What began as a wave of retailers monetizing onsite search and display inventory has evolved into a complex ecosystem that now includes hundreds of networks competing for finite advertising dollars.

Industry estimates commonly put the number of retail media networks worldwide above 200, creating a fragmented environment for brands and agencies managing spend across multiple platforms . As the space has grown, advertisers have become more selective. Ease of buying, consistency in measurement, and confidence in underlying technology increasingly influence where budgets land.

This shift marks a transition away from the early retail media land grab toward a phase defined by operational rigor and fewer, stronger partners.

Macy’s Media Network Looks Beyond Its Own Walls

Against this backdrop, Macy’s Media Network made a notable move in late 2025 by piloting Amazon’s Retail Ad Service. The pilot launched ahead of the holiday season and was described by industry analysts as the first time a major U.S. retailer adopted Amazon’s ad technology to power sponsored product advertising on its own ecommerce properties .

Macy’s Media Network, which supports Macy’s, Bloomingdale’s, and Bluemercury, continues to operate its own media offerings and partnerships. The Amazon relationship sits alongside those efforts rather than replacing them. The goal, according to Macy’s leadership, was to reduce friction for advertisers already accustomed to buying through Amazon’s ad console while expanding access to Macy’s inventory.

Since the pilot began, Macy’s says it has attracted roughly 175 new brands to its sponsored products offering, a figure shared publicly by the company at the National Retail Federation’s Big Show . While the number is self-reported, it provides a useful indicator of how changes in buying experience can influence advertiser participation.

What Amazon’s Retail Ad Service Actually Does

Amazon’s Retail Ad Service allows retailers to use Amazon’s advertising technology stack to sell and manage sponsored ads on their own digital properties. Built on Amazon Web Services, the service is designed to give retailers access to tools brands already know, including campaign setup, optimization, and reporting, without requiring retailers to build comparable infrastructure from scratch .

Amazon has stated that retailers using the service operate within their own AWS environments, with controls intended to keep retailer data separate from Amazon’s first-party retail and advertising businesses . While those assurances address some technical concerns, the broader strategic implications remain a point of internal debate for many retail organizations.

Coopetition Becomes a Strategic Reality

For traditional retailers, partnering with Amazon is rarely an intuitive decision. Amazon remains the largest player in ecommerce and retail media, and its advertising business generated approximately $56 billion in revenue in 2024 alone . That scale gives Amazon unmatched influence over advertiser expectations around performance, tooling, and reporting.

Macy’s leadership has framed the partnership as an example of coopetition, where companies collaborate in one area while competing in another. In this case, the collaboration sits squarely in advertising technology, not merchandising, pricing, or customer ownership. The distinction matters. Retailers considering similar partnerships must be able to articulate where lines are drawn and how customer relationships and brand equity remain protected.

Equally important is avoiding the assumption that shared technology leads to uniform strategy. Macy’s has emphasized that while advertisers may use familiar tools, campaign strategy must still reflect Macy’s unique customer base, merchandising priorities, and brand positioning.

A Crowded Market Forces New Choices

The Macy’s decision also reflects broader pressure across the retail media landscape. In the United States, retail media ad spending is projected to reach nearly $59 billion in 2025 and exceed $69 billion in 2026, according to EMARKETER forecasts . Yet that growth is heavily concentrated. Amazon and Walmart together account for the vast majority of retail media spend, with EMARKETER estimating their combined share in the mid-80 percent range .

For mid-sized and department store networks, this concentration creates a strategic challenge. Competing head-to-head with the largest platforms on technology alone is rarely feasible. Partnerships, interoperability, and selective use of external platforms increasingly look like pragmatic responses rather than concessions.

What This Means for Retail and CPG Leaders

For retail executives, Macy’s experience underscores the importance of flexibility. Retail media networks are not static assets. They must evolve alongside advertiser expectations, internal capabilities, and competitive realities. Leveraging third-party technology can accelerate progress, but only when paired with clear governance and a strong point of view on the customer.

For CPG brands and agencies, the development highlights a different takeaway. As buying workflows consolidate, evaluating retail media partners will hinge less on novelty and more on execution. Networks that lower operational friction while still offering differentiated audiences and credible measurement are better positioned to earn sustained investment.

The Macy’s and Amazon pilot does not signal a single path forward for retail media. Instead, it illustrates how the next phase of growth is likely to be defined by selective collaboration, sharper prioritization, and a willingness to challenge long-held assumptions about who can be both a partner and a competitor at the same time.

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