Amazon Spends While Other Retailers Retreat
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Amazon has been eating retail competitors’ lunch for a while. Now it’s after their breakfast, dinner and weekly groceries too with its planned $13.7 billion acquisition of Whole Foods. But the quest for dominance goes beyond food. The e-commerce giant, already the largest retail advertiser in the U.S., is cranking up its spending even more as it strives to harness all of consumerism and to lead in new categories such as grocery and fashion.
And that’s saying something. Amazon’s U.S. ad spending increase alone last year, $602 million, nearly equaled Sears Holdings’ entire U.S. ad budget.
The reason: Though doing very well, so far Amazon has captured “a lot of people interested in purchasing digitally the low-hanging fruit,” said Neil Saunders, managing director at GlobalData Retail. “But the next chunk of growth inevitably comes from the group that sits behind that. Those are the people that Amazon has got to persuade.”
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