With higher advertising costs, where will sellers go during the 2022 holiday shopping season?

During the holiday shopping season each year, advertising costs on major e-commerce platforms generally rise as sellers increase their advertising budgets to attract consumers. Alasdair McLean-Foreman, founder and CEO of a research institute, said this year is no exception.

McLean-Foreman also answered questions that sellers often ask .

Does inflation have an impact on businesses’ advertising spending?

“The data shows that despite high inflation this year, advertising budgets and consumer demand in certain categories remain strong, ” McLean-Foreman said. “If consumer spending on platforms like Amazon and Walmart remains stable, then I would expect merchants’ advertising spending to show similar trends.”

What are your thoughts on this year's shopping season?

CPC advertising costs are usually higher during the holiday season than usual. McLean-Foreman believes that this year's holiday season advertising costs will be higher than in previous years.

"It is difficult to predict the level of consumer spending in the second half of the year, but it is certain that economic uncertainty will affect consumers' willingness and budget to purchase certain goods," he said .

"For sellers, it is important to consider the increase in advertising costs and more intense competition, while also preparing for possible changes in consumer shopping trends."

Why Some Amazon Sellers Are Turning to Walmart

McLean-Foreman said: "Because of the soaring operating costs and increasingly fierce competition, many Amazon sellers choose to move to Walmart to seek new development. As the second largest e-commerce platform in the United States, it is reasonable for sellers to choose to continue to develop here."

Walmart has been investing in its own e-commerce business and advertising system, which puts it in a less competitive position than Amazon. In addition, its physical stores create unique opportunities for sales and advertising.

McLean-Foreman also said that 95% of Walmart's e-commerce sellers are now profitable, and some top Amazon sellers can even achieve a 200% year-on-year sales growth after switching to Walmart.

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