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Walmart's Retail Media Network: How Walmart Connect Became a Profitable Growth Engine
At a Glance
- Walmart Connect’s first full quarter with Vizio CTV inventory pushed ad sales up 31% YoY, extending a streak of 24%-plus growth every quarter.
- 73% of U.S. grocers now rank media monetization as a C-suite goal, and >60% of Gen Z/ Millennials say sponsored content improves their shopping.
- Marketplace-seller ads → off-site DSP campaigns → beta Smart-TV tiles → full Vizio inventory.
- Compounding Catalysts Keep the Flywheel Turning
- NuTrail Granola’s always-on search ads (Dec ’23-Oct ’24) delivered 10× monthly sales, evidence that shifts budgets from less-measurable channels.
- Why grocery retail media wins: weekly trips + rich first-party data = unmatched targeting and attribution.
When Walmart first broke out advertising in FY 2020, it was a footnote. Fast-forward five years and Walmart Connect booked $4.4 billion in global revenue in FY 2025 up 27% year-over-year, then added another 31% in Q1 FY 2026 after acquiring Vizio.Â
CFO John Rainey now calls ads “one of the things, and they’re all pretty equal, that got U.S. e-commerce into the black.” In other words, retail media is no longer “other income”; it is the full proof of a legit stream of alternative revenue for Walmart’s digital P&L.
Why Retail Media Fits Grocery Better Than Any Other Category
Grocery Doppio’s State of Digital Grocery: In-Store Media Monetization report values the U.S. in-store media market at $8.5 billion today. Why so large? Because a grocery cart is shoppable every week; a TV or sofa is not. The same study finds:
- 73% of grocers rank media monetisation a C-suite priority.
- 61% of shoppers and an even stronger 63% of Gen Z and 73% of millennials say sponsored content helps their trip.
- Grocers that have already launched a network report 14% higher online conversion and a 27% rise in impulse purchases.
Walmart hits each of these levers at scale: it owns the highest-frequency retail trip in America and can sell that attention directly to CPG brands looking for closed-loop attribution.
Quarter-by-Quarter Proof
Add the fact that more than half of 3P marketplace sellers now buy ads double the share two years ago and you see a compounding fly-wheel: more sellers, more SKUs, more auctions, higher CPMs.
Case Proof: NuTrail Granola’s 10× Lift
Walmart recently shared a first-party case study: NuTrail, a no-sugar granola brand, shifted from sporadic campaigns to always-on Walmart Connect sponsored-search in December 2023. By October 2024 the brand logged:
- 10Ă— increase in monthly sales
- 51 percent jump in digital penetration
- $2.92 ROAS
- 23.2 percent share of voice within the granola category
The up-shot for CPGs is clear: even as Grocery Doppio’s survey shows only 3% of manufacturers have an incremental media budget in 2024, performance like this convinces brand managers to re-allocate dollars from less measurable channels.
Walmart's Moat: Grocers Struggle to Reach Younger Audiences
Two numbers pop out of the FY 2025 proxy statement. First, Walmart attracted more than one-fifth of all U.S. grocery spending. Second, 73% of incremental digital buyers were under forty-five. Younger, mobile-native shoppers are the very cohort advertisers covet, and they are the hardest for regional grocers to reach at scale.
Bridging Doppio's "CPG Wish List"
The In-Store Media study found that 84% of CPGs want sharper targeting and 89% want better measurement from grocery partners. Walmart’s response:
- Vizio OS + Walmart Luminate. Connected-TV households can now be targeted with store-level sales attribution, something even Amazon Fire TV cannot yet match.
- Omni cohorts. Sponsored-search campaigns can chase a Walmart+ member from mobile scroll to in-store Scan & Go to smart-TV binge in the same evening closing the loop.
- Guaranteed ROAS buying. New performance-priced packages de-risk media for budget-strapped brands.
The Economics: Why Ads Subsidise Faster Fulfilment
In 2025, Walmart spent heavily on quick-commerce assets, dark-stores, drones, and geospatial routing. Yet operating income still rose 8.6% because retail media gross margins landed north of 70%, more than covering the incremental dollars that go into an Express van or drone sortie. That synergy is exactly what Incisiv’s 2023 Online Profitability through Strategic fulfillment research called the “margin fly-wheel.”
Talent and Tech Gaps: Walmart's Advantage
Doppio’s survey flags two headwinds for regional grocers:
- 79% say they lack the talent to scale a media business
- 43% don’t yet operate on a best-in-class ad platform.
Walmart sidestepped both issues by acquiring Vizio’s operating team (hardware + OS + sales) and by integrating Luminate’s data lake, giving brands turnkey dashboards while grocers elsewhere scramble to hire ad-ops talent.
What the U.S. Grocery C-Suite Should Do Next
To emulate Walmart’s trajectory, a retailer should first tidy its first-party data: harmonize POS, loyalty and online IDs so impressions can be attributed within 24 hours. Then launch sponsored search, still the quickest win as a managed-service offering for five to ten anchor CPG partners. Within a year fold in off-site display: Facebook, open-web and emerging in-store screens. Finally, layer premium video when inventory (whether smart-TVs in electronics or digital menu boards) reaches scale. Each step unlocks new revenue that can underwrite fulfilment upgrades precisely the loop Walmart now runs.
Need a retail-media blueprint or a CPG pitch deck built on your data? Ready to turn insights into profit? Email insights@grocerydoppio.com
Neha Ghai
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