This is the first article in the Perspectives on Retail Media Series brought to you by the Retail Media Council.
Written by Roger Dunn, Consultant
__________________________
AI isn't coming for retail media. It's coming to supercharge it. But only for the retailers and advertisers who move now.
OpenAI just forecast $102 billion in advertising revenue by 2030, up from $2.4 billion this year [1]. To put that in perspective, if it gets even halfway there, ChatGPT would become a top-five global advertising platform within four years. Google, far from being disrupted, reports that some brands using its AI ad tools are seeing up to 80% sales lifts [2]. The money flowing into AI-powered advertising isn't a rounding error. It's the start of a structural shift.
The question for Australia's retail media industry isn't whether this changes things. It's whether retailers will own that shift or watch it happen to them.
Where the Money is Moving
Most of this new AI ad spend will likely come at the expense of traditional search, not retail media directly. But there's a second-order effect worth noting: if shoppers increasingly start their product discovery inside ChatGPT, Google's AI Mode, or Perplexity rather than on a retailer's site, the growth trajectory for retail media flattens. The budgets don't shrink overnight, but the ceiling gets lower.
OpenAI's numbers tell the story. ChatGPT has over 920 million weekly active users, most of them on free tiers. Ad revenue per user is expected to jump from around $3.50 this year to $12 next year [1]. That's an audience and a monetisation curve that advertisers can't ignore.
Here's the thing though: retailers have something these platforms don't. They know what's in stock. They have your purchase history, your loyalty tier, your preference for oat milk over almond. A general-purpose LLM can guess at what you might want. A retailer's own AI assistant, trained on its catalogue and customer data, can actually get it right.
Australian Retailers Are Already Building
Woolworths have introduced their Olive chatbot powered by Google's Gemini Enterprise earlier this year, making it the first Australian supermarket where an AI assistant can plan meals, interpret recipes, and add items to a basket [3]. Bunnings launched Buddy just weeks later, an agentic shopping assistant that helps customers plan DIY projects, generate product lists from photos, and build carts through conversation [4]. Globally, Amazon’s Rufus and Walmart's Sparky are doing similar work at scale.
These are real products in market, not prototypes. And industry research confirms the pattern: retailers deploying AI shopping assistants on their own properties are seeing higher basket sizes, stronger loyalty metrics, and lower cost-to-serve.
But the strategic question these retailers should be asking isn't just "does the AI assistant improve the shopping experience?" It's "can we monetise it?"
A shopper asking Olive "What's a good sunscreen for sensitive skin?" or asking Buddy "What do I need to build a deck?" is expressing high purchase intent in a brand-safe, first-party data environment. That's not customer service. That's premium ad inventory.
The Monetisation Layer Is Coming
Budgets are already beginning to shift toward AI-powered product recommendations, both within retailer chatbots and across external LLM platforms.
The infrastructure to make this work is forming from both ends of the market. Criteo, one of the largest players in commerce media, is actively building the bridge between retailer-owned AI chat experiences and ad monetisation, giving retailers finer control over how sponsored products surface within conversational flows. At the startup end, Thrad launched "Thrad for Retailers" specifically to help retailers monetise their AI assistants with native, in-chat advertising [5 & 7]. Their model integrates ads directly into conversations, turning chat interfaces from cost centres into revenue engines.
This matters because it gives retailers a path to define how advertising works in AI conversations on their own terms, rather than waiting for the tech platforms to set the rules.
What Retailers and Advertisers Should Do
Retailers should treat conversational AI as a new commerce channel with its own P&L. That means investing in LLM assistants trained on your own data, exploring monetisation infrastructure that can integrate advertising natively into those conversations, and making sure your product data is structured and machine-readable. AI systems (your own and external ones) can only recommend products they can properly understand.
Advertisers should start thinking about how their products show up in AI conversations, not just in search results. Product content needs to answer natural language questions, not just match keywords. And the measurement playbook needs updating: AI-driven interactions sit earlier in the funnel, so strict last-click attribution will miss the value. Push for incrementality-based measurement that connects conversational discovery to actual purchases.
The Cost of Waiting
WARC estimates the total addressable market for agentic commerce at $136 billion in 2025, forecast to reach $1.7 trillion by 2030 [8]. The early-mover window is open, but it won't stay open forever.
The retailers who build conversational commerce experiences and figure out how to monetise them with advertising won't just survive the AI shift. They'll lead it.
__________________________________
Roger Dunn is a recognised industry thought leader in AI Commerce and Retail Media, a Rethink Retail Top Retail Expert, LinkedIn Top Voice, and author of The AI Commerce Brief, a weekly LinkedIn newsletter exploring the intersection of artificial intelligence and commerce.
Sources
[1] Sri Muppidi, "OpenAI Forecasts Advertising to Hit $102 Billion by 2030," The Information, April 9, 2026. Link
[2] Anu Adegbola, "Google: AI ads driving up to 80% sales lift for some brands," Search Engine Land, April 7, 2026. Link
[3] "Woolworths to power Olive digital assistant with agentic AI," Computer Weekly, January 12, 2026. Link
[4] "Bunnings Launches AI Buddy with Google for Aussie Shoppers," Inspirepreneur Magazine, April 2026. Link
[6] eMarketer “AI Search Ad Spend” (May 2025)
[7] "Thrad Launches Thrad for Retailers to Power Ad Monetisation in the Era of Agentic Commerce," ExchangeWire, January 14, 2026. Link
[8] "The Future of Commerce Media," WARC, 2025. Source: Edgar, Dunn & Company.