SUMMARY: Wal*Mart is building a fast-growing advertising business called Connect, which could generate $2bn of operating profit—8% of last year’s total—by 2025. And it is delving into fintech, precisely placing bets on customer-supporting financial services ranging from bill-paying to cryptocurrencies. All of these could bolster the bottom line without detracting from physical-store sales.
Amazon’s online ad business is a draw for a lot of products and brands. Still, Amazon dictates where the ads will appear, and too often, advertisers find that they are competing against Amazon’s private label products, which are 20-40% less in price.
Wal*Mart is enticing advertisers with data like “did you know 54% of Walmart customers surveyed anticipate spending the same or more on electronics during the upcoming holiday season as in 2020? Or that customers purchased food and beverages at a rate of $1 billion per week at Walmart stores and Walmart.com last holiday season? Surveys suggest gaming sales — video games, software, accessories, digital cards, and more — will soar to new heights this holiday season. And who would have guessed vacuum cleaners would be among the unlikely heroes of the 2020 holidays at Walmart?
The Wal*Mart Connect website has a lot of helpful information for advertisers, and it seems some are listening to the world’s largest retailer.
Amazon is sure to fight back. They’re not in the habit of losing to a competitor, but Wal*Mart and Target are taking a page from their playbook. Online advertising has taken a lot of heat because of fraud and the failure to produce ROI but having an ad appear while people are shopping provides a lot better ROI even though costs may be a little bit more than saturating the Web with programmatic ads.