Top Retail Media Marketplaces For Advertising in 2023
With significant increases in ecommerce growth over recent years it has become apparent that retail media marketplaces are an excellent opportunity for both emerging and established businesses to generate sustainable revenue growth.
Within this article we are going to take a closer look at each of the top players in the game to see what makes them special, and provide some considerations to take into account should you be interested in pursuing an advertising relationship.
Please note that the Media Marketplaces listed are not to be confused with Media Networks, such as: Best Buy, Home Depot, Macy’s, Ulta, CVS, Walgreens, Instacart, Chewy etc. These destinations offer advertising, but no opportunities for brands to become sellers on their site beyond the traditional route.
Channel Considerations
With a range of opportunities available I think it would be important to keep the following in mind when assessing how you are going to implement a new marketplace strategy:
- Demographics: Is your customer likely to be using this marketplace?
- Competition: Depending on the size and scale of your business take a look at your competition on each platform, this should give you an idea of both how to position yourself, and if the competition is fierce, how difficult it could be to succeed.
- Scale: Think about your existing resources available to execute on each of these platforms. A great deal of time and energy is going to be spent managing product listings, and then supporting each of these products with customer service
- Diversification: This is often a larger conversation we have with clients and a crucial one for the long term survival of your business. Make sure you don’t put all your advertising dollars into a single bucket. Apple’s privacy updates taught us this in 2021, which is why supplementing social & search with retail media is more important than ever!
- Margins: Each platform will have different fulfillment options, and fees associated with them. For example Amazon fulfillment fees have risen up to 30% in the past two years). Make sure to factor this in to your advertising costs ahead of time.
- Marketplace Advertising Budget: Not necessarily something you can control per say, but another benefit of being on a marketplace is the advertising budget they spend to bring customers to the site. Wayfair for example spends about $450m per year to bring shoppers to their site.
Retail Marketplaces Compared
| Channel | Avg/ Visitors (US)* | Loyalty Program | Same Day Delivery | Sellers (US) | Stores (US) | Rev (2021) |
| Amazon | 2.5b | Prime | Yes | 1.1m | 570** | $470b |
| Ebay | 758.6m | No | No | 7m | No | $10.42b |
| Walmart | 512m | Walmart+ | Plus | 150k | 4,742 | $559 |
| Target | 247m | Circle App | Shipt | 450k | 1,931 | $93.6 |
| Wayfair | 102m | Pro | No | 11k | No | $13.7b |
| Kroger | 34m | Club Card Boost | Instacart | – | 2,849 | $132b |
**Including Whole Foods locations
Amazon
Like them or loathe them Amazon is the largest marketplace out there right now, and there are many reasons to start marketing through Amazon. Here are a few points we like to consider when discussing with clients:
The Majority of Customers Start Their Searches on Amazon:
If you arent on Amazon for “brand”, you are losing 20% of topline revenue. Interesting thread, but make sure to fully read all comments for the whole picture:
The only advantage is cashflow.
— Sean Frank (@SeanEcom) December 24, 2021
You have to sink time into an account, spend money to build listings, run ads, all for amazon to take a cut + take forever to pay you.
If you arent doing 2m a year on your webstore, you can prob avoid it…
But 2m+ amz=$$$
Amazon has 148.6 million Amazon Prime Members in the US.
Considering becoming an Amazon merchant? Check out my blog post: Are Amazon Ads Worth it?
Ebay
The pandemic in 2020 was good to the original marketplace as people flocked to online shopping, and like many marketplaces going beyond promoted listings to a CPC-based bid strategy model has been largely beneficial.
Size Matters:
Recent research estimates that Ebay makes up around 5% of the US ecommerce market with roughly 167 million monthly active users.
For a deeper dive into the world of eBay check out: Is eBay still a Viable Marketplace for Ecommerce Sellers
Walmart
There was a lot of hype around Walmart’s advertising activities in 2022, as the retail giant goes after Amazon’s ad revenue pie. An interesting position to be in for the retail behemoth, and although they have a long way to go before they get anywhere near, they have certainly made some strides.
For context according to Juozas Kaziukėnas, founder and CEO of Marketplace Pulse, “Walmart’s advertising business is more than 10x smaller than Amazon’s, but Walmart is clearly intending to start closing the gap through hiring, building technology, forming partnerships, etc,”
Walmart’s retail media network enhancements gave it an edge over Amazon in Q2
An Innovative approach: By integrating TikTok and Snap into its ad tech platform, Walmart now offers advertisers the opportunity to serve ads on these platforms. A move which if successful will give them an upper hand over Amazon, who has always struggled with top of funnel discovery.
For further context on the Amazon vs. Walmart battle check out How Walmart’s new advertising partnerships take direct aim at Amazon.
Target
While Amazon and Walmart jet off into the sunset by adding thousands of new sellers Target is taking a different approach. On Feb 25th 2019 Target+ was launched with 30 sellers, this list has now grown to 450 sellers, but rather than grow exponentially Target continues to run their marketplace as an invite only platform.
Evidently taking a more considered approach as they think through who their trusted partners are, that complements their existing product offerings.
So compared to other marketplaces Target Plus is by far the most exclusive. With virtually no competition among sellers, each partner significantly benefitting from the 200 million monthly visits to target.com.
For a more in depth look at the marketplace and how to potentially be invited take a look at Target Plus Marketplace: Everything Sellers Need to Know
Wayfair
2022 was a tough year for Wayfair, it’s stock value plunged more than 80% as it seemed to be a victim of its own success during the pandemic. 2023 will be huge for the business as it looks to rebound.
As for the marketplace Wayfair might not have the volume of some of the larger players in this space, but it’s niche audience could certainly prove valuable to home goods brands.
Sponsored Products & Brands campaigns are available, as well as Display. For a more in-depth look at Wayfairs ad tech, check out the marketing section of their Tech Blog.
Kroger
With significant revenue increases generated in 2020 via the pandemic and grocery delivery and pickup, online grocery sales grew by 116% surpassing $10 billion. Kroger aimed to maintain and increase its market share in ecommerce planning to double sales by 2023.
Hoping to achieve this through planning to build out new fulfillment centers, add more sellers to its new marketplace, and drive sales through private label brands. All tactics that seemed to have proved successful for the grocery store giant as they aim to double digital sales by the end of 2023.
Last August Kroger announced it was launching an online marketplace with more than 50,000 items. Allowing them to sell a broader range of goods in categories outside of the core business including toys.
Become a Kroger supplier
Final Thoughts
It is interesting to see how marketplaces are evolving, businesses seeming to chase after the trend of opening up to thousands of new vendors in an attempt to gain additional web traffic, but in many cases theses attempts prove unsuccessful. Even Google promised a marketplace but then gave up. Then we see more exclusive strategies such as Target’s come into play, for a calmer more curated experience.
Given how rapidly this vertical is changing you have to be flexible with your approach, opportunities may arise that you can capitalize on, but they can just as easily be shut down too.
