Walmart, other retailers plan advertising boost

Walmart is big in almost every way — 4,755 stores, 1.5 million employees and $380 billion in revenue in the U.S. alone. But one part of the world’s largest retailer remains minuscule.

“We have a tiny ad business,” Chief Executive Officer Doug McMillon told investors in October. “It could be bigger.”

With about 300 million shoppers visiting its stores each month, according to Forrester Research, and millions more on its websites, Walmart draws in more people than Google, Facebook or Amazon. That audience, and the purchase data they generate, are catnip for big advertisers like Coca-Cola and Kraft Heinz. But Walmart and other retailers historically haven’t done enough to convert that data into dollars, particularly online.

Having watched Amazon.com build a massive advertising business, brick and mortar stores are looking to do the same. Walmart, Target Corp. and grocery chains Kroger Co. and Ahold Delhaize are quietly courting big brands with a sales pitch that goes something like this: Facebook might know what your customers like, and Google might know what they want, but only we know what they actually buy.

“They have a nice story to tell advertisers,” says David Tiltman, head of content at WARC, an advertising analysis firm. “What we see now is a more sophisticated approach to ad sales than retailers have had in the past.”

That push comes at a critical moment, as mainstream retailers are under attack like never before from the likes of Amazon, deep-discount chains and digital upstarts embraced by coveted millennial shoppers. Walmart and others have responded by spending billions to jazz up their own websites and build out services like home delivery, but those investments crimp earnings. The tailwinds retailers enjoyed last year from tax cuts and brisk consumer demand will dissipate in 2019, and looming Chinese tariffs could muddle the outlook further.