As Walmart adds TikTok, Snap, Roku and others to its marketplace, GroupM evaluates the whole sector
A clear indicator of a media segment’s growth potential is how many agencies pay close attention to it.
By that measure, e-commerce and retail media rank quite highly, as WPP’s GroupM issued a deep dive into the economics of both segments and Walmart expanded its partnerships on its marketplace, Connect, to include social platforms and ad-tech providers.
First, the Walmart news. The second most important e-commerce and retail media player behind Amazon, Walmart Connect struck partnerships with both Snap and TikTok to offer their ad avails through its demand-side platform.
In a blog post outlining the various partner program deals Walmart made, Walmart executive vp and chief revenue officer Seth Dallaire cited some $1.9 trillion in spending power by the Gen Z and millennial audiences that make up the lion’s share of those two social platforms’ users. He was otherwise unavailable for comment and did not share specific goals for the channels as part of Connect.
Walmart also moved to work with streaming provider Roku to “to make TV streaming the next e-commerce shopping destination,” wrote Dallaire.
Finally, Walmart Connect also dug into the shoppable live stream business by expanding a relationship with TalkShopLive to bring supplier-funded live streams to walmart.com/live — while also striking a deal with Firework for the same type of content. The latter two are a bit of a surprise since some social platforms are cooling to the idea of live stream shopping. Exact terms of these agreements were not made available.
Walmart isn’t fazed by others’ hesitation, it seems. Citing Accenture statistics that point to social commerce growing from 10% of all commerce activity today to 17% by 2025, Dallaire wrote it “will be driven by Gen Z and millennial consumers and nearly two-thirds (64%) of social media users — an estimated 2 billion social buyers — [who] said they made a purchase on social media in the past year.”
Jay Pattisall, vp and senior agency analyst at Forrester, which will be releasing its own research on the growing world of “commerce media” (as McKinsey outlines it), said it’s the creative side of commerce that could stand to be updated and optimized, “creative optimization will yield a larger, a larger difference than just been just media optimization,” he told Digiday.
Agencies are working overtime to get ahead of the growing world of commerce media, in part by studying it carefully. GroupM’s global director of business intelligence, Kate Scott-Dawkins, walked reporters through research that predicts, among other stats, that e-commerce will comprise one-fourth of all global retail sales by 2027, up from 19% this year.
Similarly, GroupM predicts retail media revenue will grow from $101 billion this year to $160 billion in five years’ time.
Why such growth? “Some technological advances have made this more possible, from digitization to the ability to match demand to supply,” Scott-Dawkins told Digiday. “Clients and manufacturers that are able to tie advertising to conversion and purchases are better able to see the connections, and it’s tantalizing because it’s more transparent and measurable.”
The undisputed leader of e-commerce — Alibaba, at $1.2 trillion in sales in 2021 (unlike Amazon, which only generated half that, according to GroupM) — could however be in for a bit of a slowdown, as the Chinese economy cools. China and the U.S., the research showed, represent more than half (52%) of the $5.4 trillion in e-commerce sales worldwide.
“Alibaba and WeChat were able to integrate payment and social all into one,” which helped their content commerce grow faster than other parts of the world, said Scott-Dawkins. “But it’s unlikely they’ll be able to keep growing at the rate they had been.”
And retail media has been so hot, Scott-Dawkins couldn’t think of any retailer of significant size that hasn’t gotten into selling ad time and space on their e-commerce site. “Even dollar stores are in or getting into” the retail media game, she said. Retail media “offers higher margins, and it’s a new revenue stream for them — both of those are certainly attractive.”
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