Walmart pushes into in-stores advertising as new revenue driver
Walmart is turning more parts of its stores into advertising opportunities. For example, brands can buy a spot on its self-checkout screens.
One of Walmart 's latest offerings at its SuperCenters isn't a hot new toy, snack flavor or sundress. It's advertising.
Shoppers will soon see more third-party ads on screens in Walmart self-checkout lanes and TV aisles; hear spots over the store's radio; and be able to sample items at demo stations.
Walmart's push into advertising resembles similar moves by retailers like Kroger , which struck a deal to bring digital smart screens to cooler aisles in hundreds of its stores, and Target , which began testing in-store demos and giveaways, including a recent "Barbie" branded event with Mattel that took place at about 200 stores.
For Walmart, selling ad space to its wealth of existing partners is another way to capitalize on the company's huge reach and to expand into higher-margin businesses. The discounter has nearly 4,700 stores across the U.S., with roughly 90% of Americans living within 10 miles of a Walmart store.
In the U.S., about 139 million customers visit Walmart stores and its website or app each week.
"When you think about our store, our store footprint and the the percentage of Americans that we reach through our stores, we can deliver Super Bowl-sized audiences every week," said Ryan Mayward, senior vice president of retail media sales for Walmart Connect, the retailer's advertising business.
The company plans to ramp up in-store ads using its approximately 170,000 digital screens across its locations as well as 30-second radio spots that will be available to suppliers later this year and can target a specific store or region.
And it's hoping at least one of the new advertising initiatives will be easy to digest: Free samples in stores on the weekends.
Walmart plans to sell the sampling stations to advertisers and bundle them with other ad formats that can run at the same time to make for a fuller campaign. QR codes at the demo tables will pull up online shopping options, meal ideas or seasonal information.
It tried out the new in-house approach of selling sampling stations in Dallas-Fort Worth and plans to offer the option in over 1,000 stores across the country by end of January.
Advertising still drives a small sliver of Walmart's overall revenue. Its global advertising business hit $2.7 billion in the most recent fiscal year, which ended in late January. That's less than 1% of Walmart's total annual revenue.
Yet it is becoming a more meaningful growth engine for Walmart. CEO Doug McMillon said earlier this year that he expects company profits to grow faster than sales over the next five years, driven in part by higher-margin businesses, including advertising.
In the most recent fiscal year, Walmart's global ads business grew nearly 30% and its U.S. ads business, Walmart Connect, rose about 40%. That's a sharper gain than the approximately 7% increase in Walmart's total revenue and Walmart U.S. net sales during the period.
Source: CNBC
