February 26, 2019
By Nandita Bose
WASHINGTON (Reuters) – Walmart Inc will allow consumer companies like Procter & Gamble, Unilever and Mondelez International Inc to advertise to shoppers in its stores and online in a renewed push to grow its advertising business and drive profits.
The company will make the announcement at its annual meeting with suppliers on Tuesday.
The move from the world’s largest retailer comes at a time when rival Amazon.com Inc is using ad sales to become more profitable. In its most recently reported fourth quarter results, Amazon’s ad sales and other revenue jumped 95 percent to $3.4 billion.
Amazon now ranks alongside Alphabet Inc’s Google and Facebook Inc as titans in marketing, letting merchants pay for high placement in Amazon’s search results.
Over the years, Walmart has done little to boost this business. During its investor conference in October, Walmart Chief Executive Doug McMillon said the company’s advertising business is “tiny” and “it could be bigger.”
About 300 million shoppers visit Walmart’s stores every month, and millions make online purchases on its website, according to Forrester Research. The retailer draws in more shoppers than Amazon, Facebook and Google, the research firm estimates.
“We have a unique opportunity to leverage our first-party shopping data from online and offline purchases to reach our customers and influence their purchase decisions,” Walmart’s chief merchandising officer, Steve Bratspies, said in an interview.
The retailer is consolidating different teams to build a single one that can support sales and operations under its advertising business. That team will offer services across its businesses to vendors, Bratspies said.
“It can be as simple banner ads on the website … to in-store capabilities on our TV network,” he said.
The challenge for companies and marketers often is gauging whether their investments are yielding a return. Walmart will address that by connecting data from stores and online and offering a pitch that is “much more effective than many others can,” Bratspies said.
The retailer will also ask suppliers to deliver a full truckload on time at least 87 percent of the time and expect those delivering less than a truckload to be on time at least 70 percent of the time.
Walmart will also ask suppliers to deliver full orders a minimum of 97.5 percent of the time.
(Reporting by Nandita Bose in Washington; editing by Jonathan Oatis)