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Amazon’s Winning the Marketplace War But Walmart Is Closing the Gap

Amazon’s influence on retail is unparalleled, and new data reveals that online marketplaces like it will continue to shape the future of e-commerce for years to come.

In an era where convenience is key, consumers are shifting away from retailer websites and pure plays toward platforms that offer virtually everything in one place.

Brands of all kinds have come to recognize the power behind disrupters like Amazon, and the need to optimize their businesses on those sites in order to maintain relevance. Devising an Amazon strategy—and an e-commerce marketplace strategy, more broadly—has become a non-negotiable for brands hoping to survive in the modern retail era.

According to Feedvisor’s 2020 brand report, released Tuesday, shoppers on the world’s top 100 online marketplaces spent $1.66 trillion globally throughout 2018, making up 50 percent of worldwide e-commerce sales for the year. In 2019, equally startling numbers emerged: the U.S. e-commerce market surpassed 10 percent of total U.S. retail sales for the first time in history.

Analysts called Amazon the “epicenter” of the marketplace economy that is steadily emerging across the globe. The company’s third-party sellers account for nearly 60 percent of the gross merchandise value of the world’s marketplaces combined.

And while most brands have succumbed—both enthusiastically or otherwise—to working with the online giant, some don’t have the proper tools or guidance to succeed on the rapidly evolving platform. In order to drive the higher ROI, brands must have a clear understanding of where to allocate their digital media spend, analysts said.

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Amazon owns nearly 8 percent of the digital ad market, and is continuing to wage war against Facebook and Google for a greater share of the pie.

It’s a strategy that seems to be working. Nearly three-quarters (73 percent) of brands selling on Amazon are also advertising on the platform, marking an increase of 26 percent from 2018. Additionally, more than half (59 percent) of brands selling on Amazon said the marketplace generates the highest media spend ROI, beating Google at 22 percent and paid social platforms like Facebook at 17 percent.

In-the-know brands have totally bought in, and they’re spending more money on the platform than ever before.

A healthy majority (65 percent) of brands that are currently advertising on the site spend at least $40,000 each month, up 16 percent from 2018. Almost half (47 percent) of those brands reported seeing a 7x return on that spend, and most (83 percent) said they see a consistent 4x return.

More than two-fifths (42 percent) of brands said they generated more than half of their e-commerce sales on Amazon alone.

While it’s clear that many brands are seeing happy returns, profits aren’t the only reason they feel the need to be on the site.

Half (52 percent) of the brands selling on Amazon said they put their most popular products on the platform while maintaining their own direct-to-consumer or retailer-driven selling channels. Building up a brand reputation on the marketplace helps to indirectly bolster those other channels.

More than half (57 percent) of brands still need and rely on their own websites for sales, and two-fifths still sell products at their own brick-and-mortar shops.

Brands are also on the marketplace to surveil the competition. Two out of five brands on the site listed identifying threats to their businesses as their top strategy on the platform.

While Amazon’s impressive ad spend numbers don’t lie, the platform still has to ward off competition from another retail stalwart looking to capture a share of brands’ marketing capital.

According to analysts, 70 percent of surveyed brands currently advertise on What’s more, 81 percent of brands advertising on Amazon are also advertising on the big-box store’s site, too.

More than half (59 percent) of the brands that don’t sell on Amazon are currently selling on The company’s new in-house ad and API platform, which launched last month, has marked a turning point in the retailer’s efforts to catch up with Amazon.

Through the self-serve platform, advertisers can buy on-site search and sponsored product ad placements, allowing greater transparency and visibility into the ad spend process. They also have access to relevant insights from both in-store and online data.

Despite the immaturity of that offering, Walmart’s ad strategy is paying off in a big way. Research reveals that brands are spending nearly comparable amounts on both platforms already.

Still, Amazon’s reign is far from over, and the rising tide of the retail marketplaces may prove to lift all boats.

Of the surveyed brands that aren’t yet selling on Amazon, more than one-third (35 percent) said they wanted to start doing so in the next three years.