How Retail Media has Disrupted the eCommerce Flywheel for Marketplaces
The flywheel effect is every business' dream: a self-sustaining cycle where growth feeds more growth, requiring less effort over time.
Perhaps the most famous example of such a strategy is the eCommerce flywheel Jeff Bezos sketched on the back of a napkin and eventually used to turn Amazon into a trillion-dollar company.
In the Amazon flywheel, traffic brings sellers, sellers boost selection and shoppers leave happy. It was the blueprint that forever transformed retail. But here’s the catch: that flywheel looks rusty in today’s retail media-driven world.
Loading...
Today, offering the best product assortment is vital, but not enough. Customers demand the best online shopping experiences, and brands are ready to pay to stand out from the growing competition. Personalized Retail Media is the missing cog in the old flywheel and what will lead to real business transformation.
To achieve exponential and lasting growth, businesses need dynamic supply through a marketplace, profitable demand by monetizing traffic with retail media, and a high-quality, self-sustaining ecosystem with tools that enable sellers and brands to deliver the scale while enhancing the customer experience. This is the true catalyst for commerce in this era of retail.
Unlike the Amazon flywheel, this new eCommerce flywheel considers the impact a growing marketplace has on the customer experience, combining the power of marketplaces and retail media.
Loading...
As marketplaces grow and more products flood in, competition for visibility heats up, fueling seller’s retail media investments. But visibility can’t come at the cost of customer experience—the engine of real growth. A high-performing retail media solution strikes the perfect balance, keeping promoted products relevant and personalized while satisfying both sellers and shoppers. In turn, this feeds the flywheel, as more satisfied shoppers means more sales and a higher attractivity for sellers.
It’s no wonder the combination of retail media and marketplaces is recognized as a true recipe for retail transformation. In fact, separate research from Boston Consulting Group and Coresight Research both cite marketplaces and retail media as the top strategies that drive the most sustainable growth and profitability.
The retail media and marketplace flywheel in action
Leaders like Walmart and Amazon haven’t missed out on this gold mine. They display ads on almost 100% of their search queries, fully monetizing their search inventory. What’s impressive is that they’ve done it with various brands — with less than 15% of sponsored impressions coming from major, tier-one brands. What’s more, third-party brands are key drivers of retail media growth for them. They spend 127% more on Sponsored Product Ads and 146% more on Sponsored Videos compared to established brands.
This strategy is paying off, as they are no longer dependent on a small number of big brands that could create diversification challenges and reduce bargaining power. Even better, their advertising revenue is soaring. In 2024, Amazon generated over $50 billion in global advertising revenue (+16% YoY). For Walmart, a third of its revenue is now driven by retail media, with the figures reaching $3.4 billion (+20% YoY).
Fix your flywheel with a marketplace-optimized retail media strategy
So what, exactly, are marketplaces like Walmart and Amazon doing differently today?
First and foremost, their retail media solutions are accessible via self-service for their sellers, with campaign performance boosted by AI, making the platforms intuitive and easy to use.
That’s why with Mirakl Ads, we’ve developed an automated and truly self-served solution where each feature is designed to be flexible and intuitive for both advertisers and retailers. Moreover, 97% of the campaigns in our platform rely on smart targeting, and 25% of campaigns are set up fully automatically leveraging AI to select the best products, keywords, and bidding price.
As soon as a Mirakl marketplace is launched in retail media, all sellers become advertisers on day 1 from their existing back office. This leads to a staggering average adoption rate for Retail Media of 70% among top sellers within just six months.
Our key market insight is that retail media will only be effective if it improves the customer experience. AI-advanced targeting algorithms that optimize relevance and personalization make all the difference. When customers are presented with the right products at the right time, their shopping experience becomes seamless and satisfying, creating a significant competitive advantage for marketplaces. Mirakl was built from the ground up with this insight at its core.
Further, achieving optimal personalization requires a seamless platform that enables advertisers of all sizes to participate. In fact, 76% of retailers prioritize ease of seller onboarding with self-service tools in a retail media platform —even above features like comprehensive analytics, according to a 2024 Forrester Consulting survey commissioned by Mirakl. With Mirakl Ads' advanced AI, campaigns are quick and simple to launch, maximizing seller adoption; but also highly effective, ensuring long-term retention and growth for all sizes of advertisers, from big brands to long tail. By combining an intuitive platform with self-service capabilities, AI, and a high-performing algorithm, you can unlock the full monetization potential of your marketplace. A marketplace contributing 30% of a retailer’s online revenue is projected to generate over 50% of its retail media revenue.
Learn how Mirakl can help you grow your marketplace here.
