Walmart, in its biggest deal of the past two years, is acquiring an advertising technology company
The acquisition of Vibe.co is Walmart’s largest deal since itbought Vizio for $2.3 billion in 2024. Since then, Walmart has rebranded Vizio as its own brand and integrated Vizio’s operating system into its own-brand televisions already on the market. This week’s deal is a further sign that Walmart’s executives intend to invest heavily to boost the retailer’s advertising business. Some of the executives will be required to stay on for four years to manage the business.
A comparison: Walmart – Amazon on advertising (read How Walmart has become an advertising powerhouse, whilst remaining focused on the food, non-food and e-commerce businesses) which highlights how far behind the Bentonville (Arkansas) giant lags behind Jeff Bezos’s company, which, moreover, has the advantage of also controlling Amazon Web Services...
Not that selling food, clothes and garden furniture isn’t a profitable business.Walmart’s share price has more than doubled over the last five years. But the retail sector remains cut-throat, and even a Walmart at its best has an overall operating margin of just 4 per cent [it’s actually 6 per cent, but the point remains]. The search for profitable complementary businesses could also be why the British retailer Tesco is considering returning to offering broadband services. Walmart’s logic – attracting 150 million people a week to its physical and online stores – is also compelling, with customers becoming the product itself. Walmart and Amazon already have a compelling story to tell marketers, because the return on investment from advertising on their sites is easily measurable. In their ‘closed-loop’ environments, the customer sees an advert, browses and makes a purchase all in the same place. Fox’s recent $22 billion acquisition of Roku follows a similar logic, typical of smart TVs.
Although Walmart does not have a streaming platform like Amazon Prime Video, the sale of advertising space via smart TVs places it in a similar position. Vizio’s user interface displays adverts to viewers as they switch between channels and video services. Vibe.co specialises in small and medium-sized enterprises whose budgets do not allow for the purchase of advertising slots within programmes. For a retail chain from the southern United States with a 64-year history, Walmart is holding its own admirably against the younger, flashier Silicon Valley firms. Its share price has outperformed that of Amazon, Nvidia and Apple over the last twoyears… If it manages to monetise its vast amount of consumer data and information without consumers feeling they are being treated differently, there is no reason why this trend cannot continue.
In Italy, it is worth highlighting the initiative by Selex, a former partner of Esselunga in the ESD Italia purchasing group.
This is a hub that brings together many retail chains, including A&O, Emi and Famila.
The real problem with the chain is its lack of consistency: there are well-maintained shops and others – probably franchises – which suffer from the fact that there isn’t much oversight from head office.
One shop we visited looked like this, as we photographed it, with brooms at the entrance, in what should be the customer service counter.
It’s worth noting that the customer service desk still bears the logo of the chain that preceded the one which was replaced by Selex: Carrefour has left, but before that there was Simply Sma (formerly Auchan), and their logos can still be seen in various parts of the shop.
So much for the “quick decisions” called for, for example, by Mario Sassi.
The range of tinned goods still includes products from Carrefour – the previous franchisee – which clash with Selex’s own-brand ranges.
Perhaps, before launching the medium-sized chain, a bit of tidying up is needed in the shops. Nobody thinks Selex wants to or can become like Walmart, but it could certainly manage its shops a bit better – not least because the Emi in the area is run very well and this A&O stands out for the wrong reasons.
