Walmart Plans Big Push to Challenge Amazon on Advertising, Shares Shopper Data With Brands

The efforts are key to Walmart’s aggressive plan to grow its advertising business by more than 10 times within the next five years.

Walmart Plans Big Push to Challenge Amazon on Advertising, Shares Shopper Data With Brands

Walmart will take advantage of its brick-and-mortar stores to compete with online retailer Amazon

Highlights
  • Walmart has nearly 5,000 stores nationwide
  • Walmart refocused its strategy starting in early 2019
  • Walmart said it will build a new advertising platform
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Walmart plans to expand its advertising business, adding space for advertisements at its US stores and sharing its vast trove of shopper data with brands, the world's largest retailer said on Thursday, looking to challenge rival Amazon as a media powerhouse.

The efforts are key to Walmart's aggressive plan to grow its advertising business by more than 10 times within the next five years, according to a source familiar with the matter.

Reuters previously reported Walmart's annual advertising revenues were expected to be nearly $1 billion (roughly Rs. 7,300 crores) in 2020.

The Bentonville, Arkansas-based company, with nearly 5,000 stores nationwide, has set a goal to become one of the top 10 advertising platforms in the United States within the next five years, a “slightly conservative,” goal, the source said.

Walmart has expanded its advertising business after years of stuttering progress, even as a deal to buy a 7.5 percent stake in video-sharing app TikTok remains in limbo.

Walmart refocused its strategy starting in early 2019, cutting ties with its external advertising partner and taking the business in-house as Walmart Media Group. Now, it will be named Walmart Connect, the company said.

“This is about us really digging in and pivoting the business from one which was really focused on search and display with our biggest suppliers,” Walmart's chief customer officer Janey Whiteside told Reuters. “We want to continue to do that, leverage our physical properties, and find ways to help advertisers make better use of their dollars.”

Walmart said it will build a new advertising platform in partnership with advertisement technology company Trade Desk. It will allow brands to use Walmart's ample shopper data to make advertisements more effective, even on websites and apps Walmart does not own.

Brands will be able to target advertisements to audiences using Walmart's data on shopping behaviour across categories and brands. Advertisers can then monitor sales inside Walmart stores in real-time and adjust advertisement campaigns as needed, Whiteside said.

Accurately measuring whether an advertisement led to a purchase has been a long-term technological challenge. Walmart is betting that allowing brands to use its data on advertisements across streaming video or smart TVs will draw in more advertisement dollars.

The retailer said it will take advantage of its brick-and-mortar stores to compete with online retailer Amazon, and will sell advertisements on over 170,000 screens inside more than 4,500 US stores, including on TVs and screens of self-checkout kiosks.

“We have this unparalleled source of data that we can bring to bear,” Whiteside said. “Who else can actually tell you if a customer saw something online and then a week later, physically bought it in the store?”

© Thomson Reuters 2021


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