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Amazon vs. Walmart: Key Advertising Differences All Sellers Should Know

With over $1 Trillion in net sales between them, most brands sell their products on one or both platforms. To understand how to adjust to the pros and cons of each, check out the article below

  • April 14, 2023
  • /
  • Brian R. Johnson

eCommerce has become a thriving, hyper-competitive industry, with many exciting twists and turns. Still, at the end of the day, it’s also a big community. To experience this fact, all you need to do is attend an Amazon meetup or conference.

Sure, the occasional open bar helps, but at these events you’ll find notoriously closed-mouth eCommerce sellers full-on swapping product launch, PPC, and last-mile logistics strategies with the competition.

That’s why it’s interesting to take a closer look at some of the similarities – and differences – between the Walmart and Amazon marketplaces. They both have attained a level of financial success that’s remarkably similar, but have achieved it in very different fashions.

The “community” aspect of eCommerce is particularly relevant when it comes to the two platforms because while there are a lot of ways in which making the move from one to the other might feel like slipping on a comfortable pair of shoes, there are significant differences. Particularly with their interpretation of online advertising.

But first, how exactly did these two companies end up on top of this financial mountain of cash?

How Did the Two Marketplaces Make All Those Billions?

This might be where the two companies differ the most. While their overall net sales are remarkably similar – with Walmart at $605.88 billion and Amazon at $513.98 billion – the way the two eCommerce competitors got to where they are now couldn’t be more different.

To begin with, look at their respective rates of growth. Even though they both ended up in the same place – after all, what’s a few billions between friends – the velocity with which they’ve reached those impressive numbers are very different. It feels as if Walmart has always been around. In 2007 they had already reached $345 billion dollars in net sales. Their growth since that point has been correspondingly slow and steady.

Amazon exploded onto the scene and their sales trajectory shows it. For example, back in 2007, Amazon’s net sales were less than $15 billion dollars. That’s 4.3 percent of Walmart’s sales in the same year.

Walmart reached their impressive $606 billion number through the strength of their 3335 physical locations. Even though their year-over-year eCommerce growth was 11.98% compared to Amazon’s 4.61% year-over-year eCommerce decline, brick and mortar is Walmart’s bread and butter.

It’s pretty clear that Amazon needs to keep their eyes on the rear-view mirror.

What is significant is that both companies are competing for more commercial bandwidth on each other’s traditional selling stronghold. Amazon is trying to gain a foothold in the retail market, while over the last 12 months, Walmart has exploded onto the eCommerce stage.

Walmart’s eCommerce Sales are Trending UPWARDS

According to forecasts, Walmart’s eCommerce sales are rapidly trending upwards. In 2022, Walmart’s online sales were estimated at 38.7 billion U.S. dollars. By 2023, it’s anticipated that their eCommerce sales will reach a value of nearly $45 billion, with $54.26 forecasted for 2024.

That’s a healthy increase from the 27.1 billion U.S. dollars recorded in 2020.

Historically, Walmart has been linked to shoppers with lower incomes. However, it has been making significant progress in attracting higher-income consumers. During a Q4 earnings call, Walmart CEO Doug McMillon stated, “We’re gaining share across income cohorts, including at the higher end which made up nearly half of the gains we saw in the U.S. again this quarter.”

Data supports this trend as well. Based on Prosper Insights & Analytics‘ monthly consumer survey, the proportion of high-income households ($150k+) enrolled in Walmart+ has consistently risen, from 12.7% in February 2022 to 28% in February 2023.

Sure, Walmart was a little late to the eCommerce party but they’ve been quickly making up ground on Amazon.

Amazon’s Sales Growth Has Been Impressive

Amazon’s growth since 2004 isn’t really a surprise to anyone with an internet connection. In the last year, Amazon’s net revenue was nearly $514 billion, up from $470 billion in 2021. When you subtract out AWS cloud revenue, third-party seller services, subscription sales, and revenue from their physical stores, Amazon’s online sales number is right at $220 billion.

The sheer magnitude of Amazon’s marketplace is undeniable. In Q4 alone, Amazon’s eCommerce sales outpaced Walmart’s annual eCommerce sales ($64.53B vs. $49.56B).

Prosper Insights & Analytics revealed that 61.8% of Americans identify Amazon as their most frequently used site for purchasing products, in contrast to just 8.6% for Walmart. However, it’s worth noting that Amazon’s figures have declined since 2022 when they were above 66%. Concurrently, Walmart’s market share has experienced growth.

5 Significant Advertising Differences to Consider

Not very long ago, pay-per-click advertising was just one of the many ways to launch an eCommerce product, now PPC might feel to a lot of sellers like a cover charge to get into an exclusive party.

While the rise of inflation over the last several months has weakened consumer demand affecting both Amazon and Walmart, their respective advertising business platforms  have exploded.

Knowing that advertising is a lever that both Amazon and Walmart have been leaning on heavily as they shore up their bottom lines, it’s probably a good idea to take a closer look at how the two ad platforms differ.

1. Amazon’s Hard-to-Ignore Visibility

It’s probably a good idea to stop and think about the vast difference in traffic between Amazon and Walmart. Amazon receives more than five times the number of visitors as Walmart, which means there may be more bidding competition for sellers. However, the increase in traffic also presents an opportunity for increased brand visibility on Amazon.

Amazon offers more ad placements than Walmart, including sponsored products in search results and banners at the top of the page. This improves the impressions of your ads on Amazon and increases your visibility.

As an eCommerce-only enterprise, Amazon offers three different ad types that can be used to create more nuanced ad strategies, ultimately raising your ad’s click-through rate (CTR) by generating more visibility.

It’s important to consider both the benefits and potential challenges of advertising on Amazon, given its significant traffic advantage over other platforms. By leveraging Amazon’s multiple ad types and placements, you can create a comprehensive advertising strategy that maximizes your visibility and ultimately drives more sales.

2. Not Having to Compete Against Walmart’s “House” Brand

It’s essential to understand the differing dynamics of Amazon and Walmart. While Amazon does provide a platform for third-party sellers, they also compete directly with these sellers through their own product offerings, sometimes rebranding generic items for in-house sales. This can make it challenging to thrive in the highly competitive Amazon marketplace.

On the other hand, Walmart is known for attracting consumers seeking well-known brands, providing a unique opportunity for marketers to leverage this preference. By choosing to sell on Walmart, experienced sellers can potentially sidestep the fierce competition present in Amazon’s product categories and capitalize on the demand for established brands.

3. Walmart’s Keyword Targeting Limitations

There are big differences between Amazon and Walmart when it comes to keyword targeting and ad spending strategies. While Amazon allows sellers to use auto targeted keywords and target product categories for increased bidding options, Walmart only offers keyword targeting. These differences can impact the success of different types of sellers on each market.

On Amazon, success relies on maintaining a presence in an attributes-driven market where shoppers search for specific types of products, regardless of the brand. In fact, studies show that 78% of Amazon searches are unbranded.

This means that optimizing your ad spending strategy with relevant keywords can be crucial to achieving success on Amazon.

By contrast, Walmart sellers may rely more on maintaining brand exclusivity to win bids for popular keyword targets. This can make it more challenging for lesser-known brands to compete on Walmart, as they may not have the same level of brand recognition as larger, more established companies.

Understanding these differences between Amazon and Walmart can help you tailor your advertising strategy to maximize your chances of success on each platform. By leveraging the unique strengths of each marketplace and optimizing your ad spending strategies accordingly, you can drive more sales and grow your business.

4. Amazon’s Lack of Transparency

Amazon has not exactly gained a reputation for offering intricate seller analytics, especially in the realm of customer behavior. In contrast, Walmart’s Sponsored Products already boast a wider range of metrics, enabling you to fine-tune your paid advertising strategies with greater precision.

The differences in data transparency on Amazon and Walmart are quite significant. Amazon, with its vast marketplace, tends to be more opaque in providing data to sellers.

This lack of transparency can make it challenging for you to access crucial information about your competitors and customers, ultimately impacting your ability to make informed decisions and optimize your strategies.

On the contrary, Walmart offers a more transparent approach, granting sellers better access to valuable data. Walmart’s openness enables you to better understand your target audience, market trends, and competition, allowing you to make data-driven decisions that can enhance your sales performance and overall success in the eCommerce landscape.

How Canopy Management Can Help

The Amazon and Walmart marketplaces are both designed for shopping, but there are important differences, particularly when it comes to advertising. That’s why it’s in your best interest to know how to capitalize on what each platform does best.

If you want to get a head start, reach out to the eCommerce experts at Canopy Management.

Canopy Management is a full-service marketing agency for Amazon and Walmart sellers. Our team consists of former Amazonians, multi-million dollar sellers, and award-winning experts. When you consider the many ways that Canopy Management can help you grow your business, you’ll see why selling on Amazon is much easier “under the Canopy.”

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