Fashion Monetizes with Less Sponsored Products in Search than Other Categories

One of the findings from our Sponsored Products Benchmarks Report was that the US fashion industry tended to monetize less with sponsored products in search, compared to other categories. Are you surprised? We weren’t.

Analysis: Why is Fashion Late to the Retail Media Party?

Our CEO, Andreas Reiffen weighs in.

“For a long time, fashion refused to participate in retail media.  

They said, “We don’t want to show crappy ads, we don’t want to disrupt the user experience.” This was especially the case for luxury fashion brands. They saw their websites as cool and stylish and refused to implement ads.

But the business model in retail has changed.  

Now, more and more multi-brand retailers (Zalando, Farfetch, Macy’s) are opening up a new, high-margin income stream to subsidize their core retail business and are able to offer lower prices as a result. And, there’s more robust technology to ensure that ads are as relevant as sponsored products.  

This means that all fashion brands–including high-end retailers–can offer a tailored, curated shopping experience.  

So for those who are arriving fashionably late…it’s better late than never.”

The good news: this presents a promising opportunity for growth in 2024.

The US Fashion Industry Shows Promising Growth Opportunity for Ad Inventory

Ranking Fashion Amongst Other Categories by Sponsored Product Share

• The fashion industry ranks 4^th on percentage of search results with sponsored coverage–among the 6 categories included in our report–just ahead of the office supplies sector, highlighting significant potential for ad inventory growth.

• The consistent rise in consumer demand for fashion products online suggests a promising future for inventory growth within the fashion industry, with ample room for expansion.

Comparing Sponsored Products Share

Including/Excluding Amazon and Walmart

• Not surprisingly, when comparing Ranking by % of Search Pages (as we see above), including Amazon and Walmart significantly bumps up the volume of sponsored products in subcategories.

• In both charts, searches related to Underwear have the highest percentage of pages with sponsored products followed by Bottoms and Suits. 

• Coats and Jackets, Jewelry, Tops, and Footwear-related searches fare relatively better, with more pages featuring at least one sponsored product, but there is still room for improvement.

• The biggest opportunities for sponsored products, IE the categories with the highest number of pages without any sponsored products are Accessories, Activewear, Dresses.

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Fashion Specialists Falls Significantly Behind Amazon in Monetizing with Sponsored Products

• Amazon secures the first position, commanding a 20% share, followed by Walmart and Target, both of which have room for growth in their display of sponsored fashion products.

• Macy’s, known for its specialization in apparel, surprisingly lags behind, possibly due to fierce competition stemming from the extensive variety of similar products in the market.

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• Amazon secures the first position, followed by Walmart who has room for inventory growth in the fashion industry.

• Although Target performs exceptionally well in sponsored product share, it ranks lowest in terms of the maximum number of sponsored products per search, indicating a narrower range of fashion product diversity compared to other retailers.

• Macy’s lags behind here too, showing an immense scope of ad inventory growth.

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Parting Thoughts

Our VP of Sales Paul Dahill summarizes:

“We now see innovative fashion retailers like ASOS and others offering sponsored products. This is an inevitable evolution as ROAS has become more trackable, especially when compared to traditional tactics like glossy magazines.

As more fashion retailers transform into third-party marketplaces with a greater assortment, this creates more of a discoverability challenge for suppliers-and consumers. We’ll see increased adoption of sponsored products within fashion retailers over the next few years.”

Exclusive Data Published in Our Sponsored Products Benchmarks Report

In our Sponsored Products Benchmarks Report, we analyzed over 2,000 sponsored product keywords across ten top US retail media networks --Amazon, Walmart, Macy’s, Target and more. From this data, we documented three trends that reveal how top RMNs are maximizing eCommerce AND ad revenue while maintaining a good shopper experience.

Methodology: This data excerpt includes publicly available search results on sponsored products collected from 10 U.S.-based retail media websites (desktop) over Q3-Q4 2023. Data is based on a representative set of more than 2000 keywords in selected categories. In this edition, we focus solely on ‘in-grid’ search i.e. sponsored products which appear within the main body of search results. In future editions, we may include additional ad units, such as carousels and display ads, and additional page types.

What’s Next?

• Download the full Sponsored Products Benchmarks Report.

• Reach out to learn more about our Retail Media Solutions.