Amazon seeks edge linking online ads to in-person purchases

Earlier this year Amazon for the first time provided advertisers with attribution data linking ads served online with in-person purchases at its 500 Whole Foods Markets in the US.

The system is far from perfected and the data somewhat limited, but advertisers already report gaining new insights, in particular in relation to variances between what products are most popular online and in-store, where shoppers are less influenced by reviews and ratings. 

Agencies see Amazon’s move as another step towards connecting digital and in-store data and understanding the effects each has on the other. And it’s also a potential edge for Amazon as it battles with retail giants such as Walmart with its 11,000+ stores around the world.

The details

• The Whole Foods reporting doesn’t yet show anything like a full picture, though. It only marries online and in-store data for customers who are als Amazon Prime members, and it relies on those members scanning their membership codes when they check out. 
• Walmart is working on an automated demand-side ad-buying tool that’s expected to be launched in the second half of the year. And both Walmart and Kroger – another Amazon rival in the grocery business – offer attribution data to advertisers to demonstrate the effects of digital ads on in-store and online buys.

Background

• This year, according to eMarketer, Amazon will generate $367.2 billion worth of online sales in the US, making it by far the leading e-commerce platform in the country. 
• Walmart, in second place, is expected to generate a mere $64.6 billion. 
• Despite rapid growth, e-commerce still remains a tiny proportion of total retail spend in the US. In 2021 it is forecast to make up just 15.5% of the $5.856 trillion in total US retail sales, says eMarketer.

Key quote

“When you are speaking about true omnichannel marketing, all of these companies [Amazon, Walmart and Kroger] have a significantly different footprint, and it will be interesting to see how this all shakes out as the importance of online sales becomes more important than in-store sales due to purchasing trends moving away from in-store purchases” – Ryan Flanagan, CEO of Nuanced Media

Sourced from Digiday, eMarketer