Screenshot of a display ad highlighted on Walmart Marketplace.

Why Amazon Sellers Should Embrace Retail Media

Ryan Faist

Ryan Faist, Channel Key

November 5, 2021

Retail Media is becoming a popular term among ecommerce professionals, but many brands are still unsure what it means. While it may sound new, Retail Media has been around for years. In fact, your brand is probably using it. In this article, we’ll explain the concept of Retail Media, how it works, how it can benefit your business, and how it is evolving.

What is Retail Media?

Retail Media is advertising within retail websites and apps at or near the point of sale. Think of it as the digital equivalent of in-store advertising. Instead of a product display or aisle signage, you purchase space on the retailer’s website. For example, suppose a customer searches for “women’s shoes” on and a sponsored product show ups in the results beside the organic listings. That is Retail Media. Without the ad placement, shoppers might not see this product with this search term (or it might appear much farther down the page). Other forms of Retail Media include display and video ads.

A screenshot highlighting a sponsored product at beside three organic results.

What are the Benefits of Retail Media?

Retail Media has become an important marketing tool due to the rise in ecommerce. More people shop online than ever before. Almost 2.5 billion customers visited in June of 2021. Coming in second is eBay with 885 million, followed by Walmart at 410 million. From a brand’s point of view, these websites provide a golden opportunity to reach shoppers with purchase intent. When you place an ad on a social media site like Facebook or LinkedIn, it will show to people who have logged into the site to check their feed. They are not necessarily in the mindset to shop. However, people who are searching for stainless steel dishwashers on are most likely interested in buying a dishwasher. If your appliance brand advertises its bestselling dishwasher through Lowes’ media network, you have a better chance of earning sales.

Chart displaying the leading ecommerce websites in the U.S.

Another reason why Retail Media is such a powerful form of advertising is due to first-party customer data. Retail websites collect information about shoppers like demographics, purchase history, website activity, email engagement, sales interactions, support calls, customer feedback programs, interests, and other shopping behaviors. In the past few years, more retailers have realized this data is valuable to sellers – and brands are willing to pay for it. Amazon’s advertising business generated $7.9 billion in Q2 of 2021, much more than other retailers.

Amazon is the largest and most powerful Retail Media network for two reasons: 1) more people shop on Amazon than any other website in the U.S., and 2) it has used its massive collection of customer data to develop a robust suite of marketing and advertising tools for sellers. As a result, Amazon claimed 89% of all Retail Media advertising spend in Q1 of 2021.

Chart displaying retail media ad spend in the U.S.

Retail Media in 2022 and Beyond

With ecommerce growing at an exponential rate, Retail Media is becoming a necessary tool for brands to reach customers. A new report by eMarketer forecasts Retail Media spending will increase by 27.8% year over year to reach $23.92 billion in 2021. According to Ad Age, Retail Media could more than double in growth in the coming year, climbing as high as $50 billion worldwide. While Amazon far outpaces anyone else competing for these dollars, other major retailers have already launched their own advertising platforms, including:

  • Walmart
  • Best Buy Target
  • CVS
  • eBay
  • Home Depot
  • Kroger
  • Wayfair
  • Costco
  • Instacart

Over time, you can expect these retailers to place greater focus on expanding their advertising platforms as part of their overall ecommerce strategy. For now, the biggest rivalry in Retail Media is between Amazon and Walmart. While the former has almost 20 years of experience over the latter, Walmart should not be underestimated. For almost 50 years, Walmart has been establishing a massive customer base by offering low prices, familiar brands, and the ability to get fast and easy in-store pickup and returns. This gives Walmart Marketplace – and therefore its advertising platform – the potential to become an ecommerce powerhouse. According to Jungle Scout, Walmart’s ecommerce sales could increase 89% this year, compared to Amazon’s 16%.

Chart displaying ecommerce channel ad spend in the U.S.

Retail Media: Channel Key Takeaway

The goal of advertising is to reach the right customers with the right message at the right time. Retail Media achieves this through first-party customer data, personalized ad creative, end-to-end funnel timing, and in-depth tracking and analytics. From a broader perspective, the data you gain from Retail Media can help you enhance your overall marketing strategy. It enables more effective retargeting and provides additional touch points that better reach customers across the entire purchase journey. Best of all, Retail Media is still in its early stage. As ecommerce continues to grow, retail advertising networks will become more competitive and costly. Channel Key advises brands to make room for Retail Media in their 2022 marketing plan. If your competitors are not there yet, they will be sooner than later.

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