Amazon is now the third-largest digital ad company by revenue and the biggest e-commerce business in the world.

This dominance comes from the strength of a platform powered by sponsored product ads, which no other company has been able to replicate. But competitors like Walmart, Instacart, Kroger, and CVS have launched or updated their own ad offerings as more consumers shop from home during the pandemic.

Ad execs say Amazon will remain atop the heap for the foreseeable future, but rivals have begun to find success with advertisers and threaten to chip away at its market share by carving out niches in the retail ad space.

Advertising insiders laid out five of the retailer ad platforms that are best-positioned to pull ad spend away from Amazon — and why. Amazon did not respond to a request for comment and the other retailers declined to comment.

Walmart has a massive global infrastructure that Amazon can’t beat

Despite Amazon’s online dominance, Walmart’s annual revenue is still twice as high because of its 11,500 physical stores and 150-plus global distribution centers.

Walmart also recently partnered with Instacart to challenge Amazon on fresh food, which has been a weak spot for Amazon.

Walmart also has a huge consumer database that grows every time someone uses a credit card or browses the company site and helps brands better target ads.

Walmart’s database and physical footprint allow it to draw a clearer line between brands buying ads and brands selling products online and in stores, Damon Gochneaur, director of media at Omnicom-owned retail agency The Marketing Arm, recently said. In combination, they could show how one customer made a purchase after seeing an ad.

An agency executive speaking on condition of anonymity said the growth of Walmart’s ad platform has already pressured Amazon to lower the fees it charges sellers to handle order fulfillment and delivery, and thought that if it performs well, it could lead Amazon to lower its ad prices.

Kroger’s rewards program provides a wealth of first-party data for food brands

Kroger brought in less than half of Walmart’s revenue in 2019, but it was still the second-largest US grocery chain — and it’s been developing a programmatic ad platform, Kroger Precision Marketing, since 2017 in partnership with Microsoft’s PromoteIQ.

Behind the grocer’s success lies its rewards card; for years, Kroger has claimed that around half of US households have one.

Sam Huston, chief strategy officer at ad agency 3Q Digital, has said these cards are particularly attractive to food advertisers because they pre-populate the Kroger app with frequently purchased items and brands can pay to appear on these shopping lists.

The cards also provide reliable first-party data. For this reason, the anonymous exec said his agency’s research revealed that Kroger provided better returns on ad spend than Instacart, Walmart, and even Amazon.

Kroger recently added new features to make that case. In February, the chain launched a service that claims to help brands tie ad buys more directly to sales.

Instacart works with multiple retailers and showcases emerging brands

Instacart reported 300% year-over-year growth in April alone as the pandemic accelerated online shopping, and the May release of its ad platform encouraged brands of all sizes to experiment.

The grocery delivery startup works with 350 retailers, including Walmart and Kroger, which can make it attractive to big brands that want to spread their e-commerce dollars around easily.

CEO Steve Parker Jr. of digital agency Levelwing recently said this also makes Instacart’s platform more searchable and, like Amazon, friendlier to emerging brands, while Walmart and Kroger favor household names sold in their physical stores as well as their own knock-off versions.

Jason Burke, CEO of snack company The New Primal, recently said he’s ramped up spending on Instacart during the pandemic to get his products listed more prominently in searches, resulting in a high return on spend.

“Instacart is here to stay and will likely maintain its leading position in crowdsourced grocery shopping,” he said.

CVS is promoting convenience to grocery and OTC brands

CVS launched its Media Exchange in August 2020 with a focus on consumer goods makers, whose digital ad spend Insider Intelligence estimates will increase at three times the general market rate in 2020.

More important, 70% of Americans live within three miles of a CVS, said Yves Le Breton, head of e-commerce development at Oliver, a company that helps brands develop their own in-house agencies.

People get their prescriptions and healthcare products at CVS, but the chain also sells beauty products and supermarket staples like milk, bread, and soda. Le Breton said CVS has an opportunity to combine the new platform with foot traffic to convert online ads into in-store sales.

CVS pitched agencies and brands in early 2020 by saying its ad platform could help test ad creatives to see which perform best. And like Kroger, CVS’ rewards cards can provide a wealth of data.

Target pitches consumer data, but some execs want more transparency

Target launched its ad sales arm Target Media Network in 2016 and rebranded it as Roundel in 2019.

Like Walmart, Target has advantages of customer data and a distribution system that allows brands to calculate return on spend by connecting ad buys to online and in-store sales.

A recent pitch deck focused on using the consumer data to target 147 million people, many of whom have been loyal Target shoppers for years.

Target has also set up deals with big brands like Disney and P&G that connected TV advertising to in-store sales. But the chain lacks Walmart’s scale, and Le Breton said Target has not yet made clear to clients how much data it will share with them.

“In theory they have a huge opportunity, but they have to be a little more transparent,” said Le Breton, who formerly led global e-commerce for Revlon.