Walmart’s New Ad Venture
Digital advertising platforms have proven incredibly lucrative for tech and ecommerce giants. But can the same prove true for physical retail locations?
Walmart (WMT) is on a mission to find out, expanding into the realm of in-store advertising in a move to amplify its already-vast influence. Building on its ubiquitous reach and 139 million customer visits, Walmart sees an opportunity to bring advertisers on board and create a richer, more engaging shopping experience.
At $2.7 billion, less than 1% of Walmart’s total annual revenue currently comes from advertising. By transforming its retail space into a de facto advertising platform, the retailer hopes to further broaden its earnings potential.
As part of the push toward marketing, Walmart stores may soon show third-party ads on screens in self-checkout lanes and television aisles, in addition to ad spots over the in-store radio. Companies buying ads will even be able to offer customers product samples at demo stations.
The company plans to sell this ad space to its vast network of partners. The move not only exploits Walmart’s extensive footprint but also unlocks a new revenue stream by branching out into high-margin businesses.
Walmart isn’t alone in its push to make advertising an integral part of its in-store experience. Other retailers have taken on similar initiatives. Kroger (KR) brought digital smart screens to its cooler aisles, while Target (TGT) tested in-store demos and giveaways.
Retailers across the board may be looking to capitalize on the unique opportunity of offering targeted ads. However, they are treading cautiously to avoid overwhelming shoppers, cognizant of the privacy concerns and potential overload plaguing online platforms offering similar services.
If the initiative proves successful, consumers can expect a more immersive, interactive, and maybe even entertaining shopping experience. Meanwhile, companies seeking to leverage Walmart’s reach will be on the edge of their seats, hoping the superstore’s low price guarantee applies to ad buys, too.
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