The retail media landscape is undergoing a seismic shift, with Walmart asserting itself as a serious contender in a space long dominated by Amazon. Fueled by aggressive investments and expanded capabilities, Walmart is gaining traction among advertisers, carving out a substantial share of the $150 billion global retail media market.
Expanding Walmart’s Reach in Retail Media
Walmart Connect, the retail giant’s advertising arm, has experienced rapid growth, with 46% of marketers reporting they used the platform this year compared to just 24% last year, according to Digiday research. This uptick reflects Walmart’s strengthened search capabilities, offsite offerings, and acquisition of assets like smart TV manufacturer Vizio.
The company’s unmatched physical and digital presence bolsters its appeal. With over 4,600 retail locations in the U.S. and a growing e-commerce business that topped $100 billion in sales last year, Walmart is leveraging its scale to attract more ad dollars.
Retail Media as a “Pay-to-Play” Space
For consumer packaged goods (CPG) brands, Walmart’s prominence makes it a crucial partner. Advertisers view the platform as a “pay-to-play” system, where increased investment in Walmart Connect can lead to advantages like premium in-store shelf space and better support for promotional displays. This dynamic, while controversial, underscores the high stakes for brands looking to maintain visibility in Walmart’s vast ecosystem.
Agency executives describe Walmart as a behemoth where spending on its media platform feels almost mandatory for success. “If you want to be successful, spending with Walmart Connect makes so much sense,” one executive remarked. Walmart, however, maintains that its advertising and merchandising arms operate independently, with no pressure on suppliers to advertise as a condition for stocking products.
Data Partnerships and Offsite Advertising
Walmart has been expanding its retail media business beyond its own ecosystem, entering partnerships with platforms like TikTok and Disney. These collaborations allow Walmart to capture non-endemic ad dollars, offering broader reach and targeting capabilities. A partnership with NBCUniversal, for instance, brought shoppable ads to streaming content, while the Vizio acquisition hints at Walmart’s potential for integrating streaming ads into its offerings.
Such moves position Walmart not just as a retail media player but as a legitimate competitor for national media and performance marketing budgets. “They’re not just enhancing retail media capabilities but also becoming a contender for traditional advertising dollars,” said an agency executive.
Walmart’s E-Commerce Boom and Retail Media Synergy
Walmart’s growing e-commerce business is a key driver of its retail media success. With six consecutive quarters of double-digit growth in the U.S., the platform is attracting more web traffic and generating valuable first-party data. This data goldmine enhances audience targeting capabilities, giving advertisers more reason to invest.
The synergy between Walmart’s e-commerce and retail media businesses is evident in its financials. Retail media now accounts for almost a third of Walmart’s $6.7 billion operating income, highlighting the segment’s critical role in the company’s growth strategy.
Challenges in the Retail Media Space
Despite its gains, Walmart still trails Amazon in overall retail media market share. Industry experts note that Walmart’s growth is less about stealing share from Amazon and more about tapping into new budgets, particularly from national brand marketing channels. However, Walmart faces hurdles common to the retail media industry, including a lack of standardized metrics across platforms, which complicates budget allocation for marketers.
Marketers also report mounting pressure from retailers, including Walmart, to allocate significant ad dollars as a prerequisite for securing shelf space and other perks. Such dynamics raise questions about the sustainability of the current retail media model.
Walmart’s Future in Retail Media
Walmart’s retail media business is poised for further expansion, especially as global retail media ad spend is projected to surpass linear TV next year. The Vizio acquisition could be a game-changer, potentially adding streaming capabilities to Walmart’s portfolio and capturing more brand marketing dollars. If successful, this strategy could solidify Walmart’s position as a leader not just in retail media but in the broader advertising landscape.
While Walmart still operates in Amazon’s shadow, its rapid growth and strategic moves suggest a future where the two could compete more evenly. As retail media continues to evolve, Walmart’s ability to innovate and scale its offerings will determine how far it can close the gap with its rival.
