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That鈥檚 more than double The Kroger Co.鈥檚 US grocery sales ($126.9 billion), which is Walmart鈥檚 closest competitor in the space. In-store grocery is Walmart鈥檚 bread and butter, but digital grocery is growing faster. The retailer鈥檚 savvy investments in ecommerce are paying off with the rise of digital grocery.

The Kroger Co.鈥檚 smart cooler screens act as both in-store advertisements and a place for customers to learn more about products. Amazon is giving consumers a safer, easier way to checkout with biometric payment tech at Whole Foods Market. Follow the leader: Late last year, Nike opened its first US location for its Nike Rise concept.

And you know Walgreens as the pharmacy, you know Amazon for shipping you things in 30 seconds, you know Kroger for buying groceries.

Walmart and Kroger will tighten closed-loop reporting on CTV ads. Huge troves of first-party data haven鈥檛 yet become huge advantages鈥攕o expect investment in omnichannel data architecture to bring real-time data to CTV measurement that will lure bigger brand budgets. Profitability Requirements Put Pressure on Business Models. Brands strain to find and keep customers profitably.

We predict that CTV initiatives from Amazon, Walmart, and Kroger will gain momentum in 2023. In addition, future retail media growth will pull from different ad budgets. Even though organic growth will contribute the biggest share, there鈥檚 going to be a shift in dollars from trade budgets and other digital channels. 4. Return policies will make or break loyalty.

Retailers like Walmart, Target, and The Kroger Co. and commerce intermediaries like Uber are building robust in-store and place-based ad networks powered by first-party consumer data and proximity to purchase. Almost half (46%) of buyers surveyed by the IAB in November 2022 were already running in-store DOOH ads, with about another third (31%) considering them. But measurement is a headwind.

Leading RMNs like Amazon, Walmart, Instacart, and The Kroger Co. are great for advertising programs targeted to category buyers who are most receptive to new brands. The smartest programs will deploy full-funnel marketing campaigns with product sampling as the last, best marketing touchpoint. These can be used to drive new product trials and traffic to D2C websites.

Following the lead of Snapchat (which partnered with The Kroger Co.), Pinterest (which partnered with Albertsons Companies), and TikTok (which partnered with Walmart Connect), Meta announced in late March that it would allow RMNs to extend their reach into its walled gardens, using Managed Partner Ads. And Pinterest has let Amazon into its garden.

But over time, major sellers like Walmart, Instacart, eBay, Target, and Kroger will carve out significant shares, pulling potential spending away from Amazon鈥攁nd Google. An economic downturn will not stop the party. Retail media networks get advertisers as close as possible to the bottom of the sales funnel, which is what ad buyers often prefer during recessions. To see the full forecast, click here.

Evolving consumer behavior and easing regulations are opening new pathways for long-term growth.

If Amazon wants to compete with Walmart, The Kroger, and the other big grocery chains, it needs a banner with a large physical footprint that sells mainstream grocery products to a mainstream audience. Whole Foods has a larger retail footprint but caters to a smaller audience of health-conscious and affluent consumers. How does this affect our rating?

Smaller retailers are gaining share and reshaping the ecommerce landscape, but will they be able compete with giants like Amazon?

I would project that they will go to the Kroger website or to the Stop & Shop and order directly from them. They don't need to use that app to get their grocery. Sara Lebow:. Did you make the same argument when these apps were starting off as food delivery apps, that people already know their local Chinese food restaurant and they're not going to go to the app? Becky Shilling:.

It is also extending into the retail media space through a partnership with The Kroger Co.鈥檚 advertising arm. Advertisers can use the grocery chain鈥檚 first-party data to target consumers with Snap or Story campaigns. Our Take: Snapchat is taking steps to diversify its ad offerings and branch out into adjacent areas like AR.

So Albertsons doesn't want the same exact videos that are going to be playing in Kroger. Max Willens:. Or on the New York Times' website or on BuzzFeed. That's what they don't want. Sara Lebow:. Yeah. I mean, related to what you were saying before, Max, we have omnichannel retail media ad spend in the US at 45 billion this year.

So of those companies, I pick Kroger because I think although it's not new, they have really helped facilitate this one click all the ingredients you need for a recipe in one shot. So I think if you think about conversion and removing friction and barriers, this is one of them.

It just is not going to be the Kroger grocery store. And that's kind of what Amazon has always wanted to have. Sara Lebow (16:28):. Okay. So putting you both on the spot here, I am going to ask you for a top line takeaway on store, store format revamps in 2024. Carina Perkins (16:38):.

So if you're not just in Amazon, but you're also in Walmart and you're also in Target's Roundel network, and you're also spending in Kroger, A, that just becomes difficult to manage, but it then gets really, really difficult when you sit down with all the data and go, "Okay, but which one of these is actually doing a better job? Right now I'm spending a million bucks at all of them.

Kroger added CTV display inventory to its ad network. Long tail: There are hundreds of streaming services, many of which are ad-supported. The dozen most watched services account for about 90% of time spent streaming, per Comscore. The remainder represent a small portion of our ad spending forecast. Streaming Time Spent Keeps Growing.

It was around the time of the Albertsons Kroger merger news. I predicted that Walmart would buy Roku and they would buy Roku to really make a play, a big play into CTV, and that's what Walmart is doing here and they're doing it with a value oriented play. It's probably about a quarter of what they would have to spend to buy Roku. Becky Schilling:. Yeah. And it makes sense, right?

They're growing it to be the sort of everyday grocery brand that competes with the likes of Target and Kroger and Walmart, but it's going to cost billions of dollars for them to open up enough stores to basically even have a shot of competing with these behemoths in the physical grocery space. Sara Lebow:. And Amazon Fresh definitely doesn't feel like a Walmart.