What Amazon’s Big-Box Move Means for Retail Media and Brands

While Amazon.com entering the big-box format with its largest-ever store will be framed as a push to compete with Walmart and Costco and win more physical baskets, the real story is more focused on attribution and retail media. This is more than an expansion of where Amazon sells products. Rather, it’s expanding where it can observe behavior, influence shopping decisions, and measure outcomes inside its own ecosystem.

The core dynamic is simple: retail media budgets have grown because the channel promises clarity. Closed-loop measurement, identity-based targeting, and shopper proximity all create a compelling narrative of accountability, especially in an environment where marketing teams are under pressure to defend spending, explain variance, and show results quickly. Amazon’s expansion into a hybrid physical and fulfillment model only strengthens that narrative as it creates more ownable moments across the shopper journey and increases the number of places where Amazon can credibly say it proves impact.

That's exactly why senior leadership should treat this move with both respect and caution. The benefit of retail media is real: it reaches consumers when they’re in-market, it can drive immediate conversion, and it offers a level of transaction linkage that other channels often struggle to provide. However, the more Amazon expands the walls of its ecosystem, the more critical it becomes to separate what's measured from what's incremental. Measurement inside the platform isn't the same thing as incrementality across the business, and those two concepts diverge even further as a walled garden expands.

This is the heart of the issue with platform metrics. Amazon’s platform attribution can only see what happens inside Amazon. What it cannot see is what would have happened if dollars were invested elsewhere, whether that’s another retail media network like Walmart Connect, media channels like social or CTV, or even nonmedia levers like price and promotions. It also can’t fully account for substitution effects, where spend appears to perform but is actually pulling demand forward, shifting share between retailers or capturing conversions that were already likely to occur.

That’s why more holistic measurement often contradicts platform attribution, and why that contradiction isn't a problem, it’s the point. Incrementality is only measurable relative to everything else in the market: every other tactic, every other retailer, and every other influence on demand. Platforms fundamentally cannot do that analysis because they can’t observe the entire ecosystem. As a result, platform reporting is valuable for optimizing within the platform, including creative, audiences, placements, and execution, but it’s not designed to answer the hardest question brands actually care about: Should we invest the next dollar here or somewhere else?

Amazon’s big-box footprint makes that decision even more consequential because it increases the perceived completeness of Amazon’s story. Full-funnel retail media packages become easier to sell when a retailer can connect more of the journey to purchase outcomes. Bundling across video, display and search will look more strategic, and performance narratives will appear more comprehensive. However, bundling can also obscure what’s happening underneath: saturation. When lower-funnel tactics like search are already overspent, expanding budgets may still generate attributed conversions while marginal profitability deteriorates. The business keeps getting sales, but the brand starts paying more and more for less and less incremental growth.

The most mature brands will see Amazon’s move as both a catalyst and a test. The catalyst is that retail media will become even more central as retailers expand measurement, surfaces and packaging. The test is whether brands will respond by concentrating spend where reporting is strongest or by allocating investment based on true incremental business outcomes. In a market where budgets are under pressure and profitability matters more than ever, the brands that win will not be the ones with the biggest Amazon budget; they’ll be the ones with the strongest measurement discipline and the clearest portfolio strategy.

The bottom line is that Amazon building a massive big-box store isn’t automatically good or bad for brands; it’s a signal that the retail media walled garden is getting bigger. That means the performance story will get more persuasive, the pressure to commit more spend will increase, and the risk of margin erosion through saturation will rise. The brands that stay in control will treat retail media like a portfolio, use in-platform metrics to execute well, and rely on broader measurement to make cross-channel decisions that platforms simply cannot.

Bradley Keefer is chief revenue officer of Keen Decision Systems, a marketing mix modeling platform powered by AI.