A growing cohort of retailers are embracing retail media while marketplaces have also turned to it as a way to diversify their income streams, the newly published ChannelX Europe’s Marketplace 2024 report highlights.
By offering advertising opportunities to brands and sellers on their platforms, marketplaces can generate additional revenue beyond traditional sales commissions. This has become a powerful cash generator for many online marketplaces.
There has been a notable shift in consumer behaviour, with more users starting their product searches directly within marketplaces rather than using traditional search engine. This trend has made retail media increasingly valuable, since it allows brands to reach consumers at critical points in the purchase process.
With so many customers, marketplaces possess vast amounts of valuable consumer data. Retail media networks enable these platforms to monetise this data by offering targeted advertising opportunities to brands and sellers. This data driven approach allows for more effective and personalised advertising.
Advantages for sellers
For marketplace sellers, retail media networks offer significant advantages:
• Increased visibility
Sellers can promote their products directly on the platform on which its target consumers are already shopping
• Targeted advertising
Access to the marketplace’s user data allows for more precise targeting of potential customers
• Performance tracking
Advanced analytics can provide sellers with insights into campaign performance and overall sales impact
A growing ecosystem
Naturally, as interest in using marketplaces has increased among consumers, while both retailers and brands have seen the power of retail media, so the marketplace retail media ecosystem has expanded to include various players across the global players such as Amazon, local and regional marketplaces such as Allegro, and various vertical marketplaces. It is also becoming a particularly potent force among retailer-run marketplaces as these retailers seek to leverage both their core site retail media play and the additional customer reach and data they have with marketplaces.
This diverse ecosystem is particularly evident in the fragmented European market, which offers brands and sellers multiple options for reaching their target audiences. Amazon, for example, already leads the pack among European retailers, logging a staggering $34bn (€31bn) in retail media ad revenues in 2022, way ahead of all other retailers by a factor of ten. Indeed, according to data, the top ten retail media networks by ad revenue in Europe in 2022 are all marketplaces.
Challenges and opportunities
While retail media on marketplaces presents significant opportunities, it also comes with challenges. Brands and sellers must learn how to navigate issues such as brand positioning, pricing strategies and performance measurement across multiple platforms.
However, those that can effectively leverage retail media on marketplaces stand to gain increased sales, valuable consumer insights and improved brand awareness. The link between marketplaces and retail media is symbiotic, with each driving the growth and evolution of the other. As ecommerce continues to expand, this relationship is likely to become even more integral to the success of both marketplaces and the brands that sell on them.
The brand new ChannelX Europe’s Marketplaces 2024 report was launched during ChannelX World on 09 October.
Outlining the overall performance of the sector across Europe, the report assesses how marketplace trading as a whole has changed since 2023, focussing on both the sectors using marketplaces and the regions where marketplace use has changed.
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