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Research Briefing: Amazon faces retail media competition from Walmart and Target

June 29, 2024
in Technology
Research Briefing: Amazon faces retail media competition from Walmart and Target
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By Catherine Wolf  •  June 27, 2024  •

Ivy Liu

This research is based on unique data collected from our proprietary audience of publisher, agency, brand and tech insiders. It’s available to Digiday+ members. More from the series →

Interested in sharing your perspectives on the media and marketing industries? Join the Digiday research panel.

In this edition of the Digiday+ Research Briefing, we examine how Amazon is facing retail media competition from Walmart and Target, how publishers are preparing for Amazon Prime Day despite a drop in affiliate commerce revenue and how X’s CEO was on a mission to drum up business at Cannes, as seen in recent data from Digiday+ Research.

Retail media has surged in popularity over the last year, with many retailers investing more heavily in the channel and others venturing into retail media for the first time. Despite the range of new entrants, Amazon still holds the majority of marketers’ retail media budgets. This is according to Digiday+ Research’s newly released CMO Strategies report on retail media.

Walmart’s Walmart Connect and Target’s Roundel platforms came in second and third after Amazon regarding how much budget marketers put toward those channels. Both platforms have been building up their retail media networks and both have seen increased marketer adoption since 2023. Walmart Connect almost doubled in percentage points from 24% of marketer respondents who said they used Walmart Connect in 2023 to 46% who said they use it in 2024, while marketer use of Target’s Roundel increased by 6.6 percentage points.

What did not shift much from last year were the main success metrics marketers consider for retail media. The majority of marketer respondents (86%) said that they measure retail media success via commerce or sales rather than awareness metrics like engagement (which came in at 9%). This is likely because retail media sits much closer to the point of checkout than other marketing channels. Though retail media has demonstrated strength as a bottom-of-the-funnel marketing strategy, the channel has started showing signs of breaking into the top of the funnel. 

Insights and stats:

“Typically, retail media networks have been lower down in the funnel. I think there is an opportunity for them to get higher up in the funnel. Because of the first-party data, you can tightly target what users you are trying to find.” — Alex Kazim, vp and general manager of global advertising at eBay and lead of eBay’s RMN

Scale has become less of a challenge for marketers on retail media networks than it was a year ago — 8% of marketers on average said scalability is an issue in 2024 versus 29% in 2023. This decrease could indicate that RMNs have started to build up their targeting capabilities with first-party data and product offerings, particularly pushed ahead by the increase in competition in the retail media space.

Cost of media remained the biggest challenge marketers said they face with retail media networks. As more retailers introduce their own RMNs, marketers have had to stretch their budgets in order to balance their platform mix. Some experts have even said that this influx of new RMNs is not sustainable and can harm retailers and advertisers.

Read more about the rise of retail media networks

Digiday+ Research digest

Publishers are preparing for one of the most lucrative shopping holidays for their affiliate commerce businesses — Amazon Prime Day. Condé Nast has made improvements to its onsite shopping experience ahead of this year’s Prime Day event, taking place July 16-17, with more original photography, video reviews and templates. Gallery Media Group expects to produce about 20% more content this year around Prime Day. That’s despite a noticeable drop in publishers’ affiliate commerce revenue between last year and this year, according to a recent Digiday+ Research survey.

Insights and stats:

In Q1 2024, less than half of publisher professionals (45%) said affiliate commerce accounted for at least a very small portion of their revenue, a significant decrease from the nearly two-thirds of publisher pros (62%) who said the same in Q1 2023.

“We are having to look harder and harder at data. … We look at who buys, exactly when they buy. It’s the segmentation of behavioral shopping within all of the sites that we own and represent, trying to create cohorts so that we’re able to provide niche shopping opportunities.” — Samantha Skey, CEO of She Media, when discussing the company’s focus on curation ahead of Amazon Prime Day

A little more than half of publisher pros (58%) said in Q1 2024 that they would put at least a very small focus on growing their affiliate commerce business in the next six months. That was down from almost three-quarters of publisher pros (70%) who said the same in Q1 2023.

Read more about publishers’ revenue priorities for 2024

Linda Yaccarino spent a whirlwind week at Cannes Lions this year. The CEO of X (formerly Twitter) was there to drum up business across sales, partnerships and creators, representing X in its ongoing efforts to steer a beleaguered ads business back on course. But according to results from a first-quarter Digiday+ Research survey conducted among brand, retailer and agency professionals, it might be too late. Not only did the survey find that marketers’ X usage trails far behind its social media competitors, but it also found that marketing spend on the platform has dropped dramatically, with brand safety being the biggest concern for marketers.

Insights and stats:

Just under a third of agency pros (32%) said their clients currently use X, and an even smaller 27% of brand and retailer pros said their companies use the platform. For context, 94% of agency pros and 96% of brand and retailer pros told Digiday they use Instagram, while 79% of agencies and 93% of brands and retailers said they use Facebook.

Brand safety is marketers’ biggest challenge on X. Thirty-nine percent of brand, retailer and agency pros said in Q1 2024 that brand safety concerns are their biggest challenge with X.

Marketing spend on X has declined in the last year. Twenty-six percent of brand and retailer pros and 24% of agency pros said in Q1 2024 that their companies or clients spend at least a very small portion of their marketing budgets on X, down from 61% of brands and retailers and 65% of agencies in Q1 2023.

“It was always going to be a tough job. Not only did Linda Yaccarino inherit the problems that existed at [then-]Twitter before Elon Musk took it over, she also inherited the added challenge of dealing with Elon Musk, which isn’t easy.” — Jasmine Enberg, principal analyst, social media, at eMarketer

Read more about marketers’ investments in X

See research from all Digiday Media Brands:

Digiday+ Research

Glossy+ Research

Modern Retail+ Research

https://digiday.com/?p=549001

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : DigiDay – https://digiday.com/marketing/research-briefing-amazon-faces-retail-media-competition-from-walmart-and-target/?utm_campaign=digidaydis&utm_medium=rss&utm_source=general-rss

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