Anything you can do...
With all-time-high e-commerce sales, plans to expand its drone delivery service, and continued efforts to boost its burgeoning advertising business, Walmart is beginning to look a little more like Amazon with each passing day.
However, the brick-and-mortar behemoth still has some way to go on all 3 fronts: its global ad business, for example, was up some 28% to $3.4 billion last year, but remained just a fraction of its e-com competitor, which hauled in a staggering $14.7 billion in Q4 alone.
Ad-ditional income
Walmart execs will be hoping that the newly-announced $2.3 billion acquisition of smart TV maker Vizio will accelerate its ad offering. The retailer sees the deal as an opportunity to offer its customers “innovative television and in-home entertainment and media experiences”, while combining with its media arm, Walmart Connect, to help partner brands “realize greater impact” from their advertising spend.
Although Walmart only recognized $3.4 billion in advertising revenue last year (less than 1% of total sales), ads are an exciting proposition because the margins in the division are a completely different ballgame compared to its legacy retail business (chart). In fact, Walmart's CFO has predicted that the company’s future profitability might rely more on ads and services than its enormous retail empire.
