Retailers have found a new revenue engine—and it’s not on the shelves, but in the ad space.
As retail media explodes into a multi-billion dollar opportunity, more major retailers are stepping into the ring dominated by Amazon. From Walmart Connect and Target Roundel to Instacart Ads and Kroger Precision Marketing, everyone wants a slice of the high-margin, high-demand ad pie.
But the question remains: Can they really compete with Amazon?
Amazon’s Ad Empire: The Standard to Beat
Let’s start with the giant.
Amazon Ads brought in over $47 billion in 2024, cementing its role as the third-largest digital ad platform globally—right behind Google and Meta.
What makes Amazon so powerful?
- Closed-loop attribution: Brands can advertise and immediately measure conversions.
- Intent-rich searches: Consumers on Amazon are already looking to buy.
- First-party shopper data: Every click, search, and purchase feeds smarter targeting.
For brands, Amazon offers scale, precision, and proven ROI. It’s no wonder why Consumer Packaged Goods (CPG) companies are diverting larger chunks of their ad budgets to Amazon over traditional display or TV.
Why Retailers Are Entering the Ad Arena
Retailers aren’t just playing catch-up—they’re reinventing the game. They’ve realized their most valuable asset isn’t just shelf space; it’s first-party data from millions of shoppers.
According to eMarketer, retail media spending will surpass $100 billion globally by 2026. Retailers like Walmart, Target, and Walgreens are building their own ad businesses to grab market share.
Their edge?
- In-store and online data fusion
- Digital shelf ownership
- Unique customer relationships
- Access to niche audiences and local markets
These aren’t just copycat platforms—they’re media ecosystems powered by real-time shopping behavior.
Who’s Making a Serious Push?
Walmart Connect
Walmart’s ad arm made over $3 billion in 2024, and it’s scaling fast. With 150M+ weekly customers, they’re combining in-store insights, eCommerce data, and off-site ad targeting (via The Trade Desk) to attract CPG and retail brands.
Target Roundel
Target’s retail media network focuses on premium, brand-safe environments and offers seamless integration into the Target shopping experience. Their closed-loop measurement tools are winning over cautious advertisers.
Instacart Ads
Instacart’s position as a grocery aggregator gives it leverage across multiple brands. Its ad network appeals to food, beverage, and home essentials brands looking for purchase-ready audiences.
Kroger Precision Marketing
Backed by 60 million+ shopper households and rich loyalty data, KPM offers direct access to high-intent grocery buyers. Through partnerships with platforms like Roku and Meta, it’s extending reach well beyond Kroger.com.
Challenges Retailers Face in Competing
Despite their growing capabilities, retailers still face uphill battles:
1. Scale
Amazon is a behemoth. Its global traffic and product search dominance are hard to match. Most retailers operate with limited reach by comparison.
2. Tech Infrastructure
Building ad platforms isn’t cheap—or simple. Many retailers must rely on third-party adtech to deliver programmatic, reporting, and attribution solutions.
3. Advertiser Education
Brands are familiar with Amazon’s self-serve tools. Competing platforms must educate agencies and marketers to adopt and trust new interfaces and metrics.
4. Fragmentation
The rapid rise of multiple retail media networks means more complexity for advertisers—dozens of dashboards, data silos, and performance KPIs to juggle.
How Retailers Are Closing the Gap
To compete effectively, retailers are playing to their unique strengths:
Omnichannel Insights
Unlike Amazon, retailers like Target and Walmart integrate physical store behaviors with online journeys. That means better visibility into real-world consumer actions.
Checkout-Driven Attribution
Retailers can tie ads directly to both eCommerce and in-store sales, offering complete ROI visibility—a massive advantage over traditional media.
Partnerships with AdTech
By working with platforms like The Trade Desk, Criteo, and Roku, retailers are extending their ad inventory across the open web and connected TV.
Custom Creative + Brand Safety
Retailers can offer brand-safe environments within their apps, websites, and store digital displays—something Amazon can’t always promise.
So… Can Retailers Compete?
Yes—but not by trying to be Amazon. Their success lies in being different.
Instead of chasing Amazon’s scale, savvy retailers are focusing on:
- Depth of customer knowledge
- Trust-based brand experiences
- Localized, personalized targeting
- Closed-loop, omnichannel attribution
Retail media networks will continue to grow—but not as an “Amazon replacement.” Instead, they’ll complement the ecosystem, offering valuable niche advantages for brands looking to diversify spend.
Final Thoughts: The Ad Future Is Multipolar
Amazon will remain the retail ad king in the near term—but it won’t be the only kingdom.
As retail evolves into media, expect to see:
- More CPG ad budgets split across platforms
- Greater demand for cross-network attribution tools
- Consolidation of smaller players into larger retail media alliances
For brands, this means more opportunity—but also more complexity. The winners will be those who build multi-retailer strategies that capitalize on each platform’s unique value.
