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February was a month of significant changes in the retail media and marketplace landscape. From Amazon’s evolving approach to directing traffic to brand websites to new AI-powered catalog management tools, the industry continues to shift rapidly.
Here are the most impactful updates from the past month:
Amazon Is Changing the Game: Directing Traffic to Brand Sites
One of the most notable shifts was Amazon’s announcement that it will start directing customers to brand websites when products are unavailable on its platform. According to their press release, the move is driven by assortment gaps and aligns brand sites using Buy with Prime. This marks a major shift from Amazon’s long-standing policy of keeping traffic within its ecosystem.
Pros:
- Brands not currently selling on Amazon can test the platform’s potential by seeing how much traffic Amazon generates.
- For brands already selling, this could serve as a backup when products are out of stock or facing compliance issues.
- Amazon will gain valuable insights into shopper and brand behavior, potentially leading to new partnerships and selling models.
- Since a lot of searches begin on Amazon, brands will inevitably invest in advertising there—regardless of whether they have product placement. Amazon may be accessing an untouched revenue stream of potential advertisers.
Cons:
- Amazon may eventually monetize this feature, potentially adding costs for brands that want to participate.
- The user experience could be inconsistent, as brand websites vary in design, speed, and checkout ease.
- Increased competition at the top of search results could make the Amazon search landscape even more crowded.
Tips:
- If your brand is not yet selling on Amazon, apply for the beta program to test the traffic potential.
- If you already sell on Amazon, consider how you might use this as a backup strategy for inventory disruptions.
- Optimize your DTC site for conversions, as Amazon’s traffic could drive meaningful demand.
Ulta’s Omnichannel Expansion: Syncing Store Inventory with Brand Sites
Ulta Beauty has partnered with omnichannel platform Lucky to integrate its in-store inventory with brand websites. Unlike traditional store locators, this feature syncs real-time inventory feeds, allowing customers to see local availability from the brand’s own website.
Pros:
- Boosts conversion rates by reducing uncertainty around product availability.
- Strengthens the brand-retailer partnership by driving traffic to Ulta while maintaining brand visibility.
- Provides a better customer experience by enabling same-day pickup or faster delivery options.
Cons:
- Some brands may prefer to keep traffic and conversions on their own site rather than directing customers to Ulta.
Tips:
- If your brand sells at Ulta, explore ways to integrate this feature to improve customer experience.
- Monitor conversion rates to assess whether driving customers to retail partners improves overall revenue.
- Consider how this model could work for your brand’s other retail partners.
AI-Powered Product Catalog Updates on Amazon
Amazon has introduced AI-driven features to enhance product listings, including filling in missing attributes and mapping spreadsheet formats to Amazon’s listing requirements.
This aims to simplify catalog management and improve product detail accuracy.
Pros:
- Reduces some of the manual effort needed for catalog setup and updates.
- Helps standardize product information, improving search accuracy and customer trust.
- Aligns with Amazon’s broader goal of enhancing AI-driven search (e.g., Rufus) by ensuring cleaner product data.
Cons:
- AI suggestions are inconsistent, sometimes generating conflicting product details.
- Most brands, especially those with large catalogs, may need to spend a lot of time manually reviewing the initial AI-generated attributes. Over time, we should see improvements.
Tips:
- Double-check AI-generated attributes before accepting updates to avoid misinformation.
- Use this feature to streamline bulk listing uploads, particularly if managing a large catalog.
- Expect refinements over time, but be cautious about fully relying on AI-generated product details.
Amazon Rufus AI Begins Testing Ads in Search Results
Amazon’s AI-powered shopping assistant, Rufus, has started displaying sponsored content within its search responses. This suggests that Amazon is preparing to integrate advertising into its conversational AI experience.
Pros:
- This could create a new, highly targeted ad placement for brands as customer adoption of Rufus grows.
- Builds on Amazon’s push to expand advertising revenue beyond traditional search and display ads.
Cons:
- If ads feel unnatural in conversational AI, customers may resist engaging with them.
- AI-generated responses are still improving, and inconsistencies could impact ad effectiveness.
Tips:
- Keep an eye on how Rufus ads evolve and whether they generate meaningful traffic.
- Be prepared for new bidding options as Amazon introduces placement modifiers for AI-driven search.
- Ensure product listings are well-structured so they integrate effectively with AI-powered search features.
Amazon’s Brand Plus & Performance Plus: AI-Driven Ad Optimization
Amazon’s Performance Plus tool, originally designed for off-Amazon brands, has now expanded to include Amazon sellers. Additionally, Amazon has launched Brand Plus, an AI-powered solution aimed at upper-funnel advertising.
Pros:
- Performance Plus helps brands maximize ROAS by automating bid and audience targeting.
- Brand Plus focuses on demand generation, making it easier to attract new customers.
- Reduces manual ad management workload, allowing for a more automated campaign approach.
Cons:
- Performance Plus has been shown to prioritize retargeting existing customers, which may not align with new customer acquisition goals.
- AI-driven ad automation may not always align with a brand’s unique strategy, leading to potential inefficiencies.
Actionable Advice:
- If ROAS is your primary goal, Performance Plus could be worth testing.
- If your focus is upper-funnel brand awareness, experiment with Brand Plus while monitoring new-to-brand metrics.
- Expect further refinements, but be cautious about fully outsourcing ad strategy to AI.
Looking Ahead
We’re seeing a continuous evolution toward AI-driven efficiency, omnichannel integrations, and new monetization opportunities.
As retail media and marketplace strategies become more complex, brands need to stay agile and adapt to these shifting dynamics.
We’ll be keeping a close eye on how these developments unfold in the coming months. Subscribe to stay tuned for the next roundup!
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