• by Laurie Sullivan  @lauriesullivan, September 16, 2024

A top Walmart executive described the retailer's plans to use its ad business and other digital services -- in order to build an Amazon-like flywheel strategy to expand on media buying and make it more attractive to advertisers --  during a Goldman Sachs conference.

Seth Dallaire, executive vice president and chief revenue officer at Walmart, revealed the plans during a presentation at the Goldman Sachs Communacopia + Technology Conference in San Francisco.

Small changes have a ripple effect. That is the concept of the Amazon Flywheel, a business model describing how Amazon generates traffic and business through a cycle of customer experience and site traffic.

Dallaire oversees the company’s retail media network Walmart Connect, subscription service Walmart+ and first-party data service Walmart Luminate. He previously served as Instacart’s chief revenue officer for two years, and previously, worked for eight at Amazon, leading its global advertising sales and marketing teams.

Ecommerce comes without space restrictions. “You don't have that limitation in the digital and e-comm space,” said Dallaire, according to the transcript. “You have an unlimited amount of shelf space, if you will. And as consumers are deciding, hey, I'm actually -- my expectation is that I can find any product I want in an e-commerce environment -- then if you don't have that assortment, then you run the risk of not being able to serve that customer really well.”

Assortment has become key. Retailers like Walmart can load in as much inventory as needed or wanted in the market through ecommerce, while those that are not turning the inventory will quickly lose the attention of that marketplace seller community and consumers.

“Having advertising capability for the marketplace seller -- so that they can, in fact, introduce the product to the customer or drive the sale -- is also a critically important part of the business, so the two are very tightly coupled,” Dallaire said.

Walmart’s ecommerce business has been using a measurement called the perfect order score to understand how well the company fulfills member orders in terms of what they search for online and fulfill those orders in a timely manner.

The retailer has found there is a direct relationship with advertisers, and “a causal relationship between the acquisition of new members, but then also the retention of those members.”

The data has been able to provide the information around the quality of what Walmart delivers in terms of orders.