Walmart(US:WMT) Seeking Alpha·2024-09-12 00:50Core Insights - Walmart is focusing on enhancing its advertising business, Walmart Connect, which has transitioned to an in-house model to improve relationships with advertisers and increase investment in technology [5][7][21] - The growth of retail media is attributed to the ability to leverage first-party data to measure the effectiveness of advertising directly linked to sales outcomes [7][21] - Walmart+ membership is experiencing double-digit growth, with a focus on improving delivery services and expanding product assortment to enhance customer experience [11][12][21] Retail Media - Walmart has evolved its advertising business over the past few years, bringing capabilities in-house to better serve advertisers and increase investment in technology [5][6] - Retail media is the fastest-growing digital marketing channel, providing retailers like Walmart with the ability to track consumer actions directly linked to advertising investments [6][7] - The scale of Walmart's retail media network is a significant advantage, allowing it to attract advertisers seeking broad reach in both digital and physical spaces [7][21] Walmart+ - Walmart+ offers delivery-oriented benefits, with a focus on fulfilling grocery orders and improving the customer experience through a high "perfect order score" [12][13] - The membership demographic includes a diverse income range, with initiatives like Walmart+ Assist aimed at making membership accessible to lower-income customers [12][13] - Additional benefits for Walmart+ members include partnerships with third-party services like Paramount+ and Burger King, enhancing the overall value of the membership [15][21] Data Ventures - Walmart's Data Ventures team has developed Walmart Luminate, a data product that provides suppliers with insights into inventory positions and advertising effectiveness [16][17] - The data capabilities allow suppliers to optimize their advertising investments based on real-time inventory data, improving efficiency and sales [17][20] - Feedback from suppliers is integral to the development of data products, ensuring that Walmart can meet their needs while also enhancing its own operational efficiency [19][20] Overall Strategy - Advertising and membership initiatives currently contribute about 20% to Walmart's overall EBIT, highlighting their importance in the company's strategy [21] - Investments in advertising and membership are aimed at improving customer experience and reinforcing Walmart's everyday low price positioning [21][22] - The revenue generated from these higher-margin businesses provides Walmart with the flexibility to reinvest in various areas of the business, further enhancing customer service and operational capabilities [22]