Walmart recently announced the $2.3 billion acquisition of VIZIO, the TV manufacturer behind the SmartCast operating system (OS). This acquisition highlights the intersection and need for deep integration across the retail, advertising and consumer landscapes. For years, Amazon has been the clear leader in e-commerce while Walmart has struggled to match Amazon’s growth. However, the acquisition of VIZIO will give Walmart the consumer data insights needed to be a stronger competitor to Amazon while also signaling a new era where consumer insights and ad tech converge to redefine the retail experience.
In Q3 ’23, Amazon owned 8.2% of the total retail consumer spend in the US while Walmart claimed 7.2%. However, over the same time period, Amazon was responsible for 53.3% of e-commerce spend while Walmart’s share of that market was a mere 6.8%.
It’s no secret that one of the primary drivers of Amazon’s success to date is their wealth of data and ability to connect consumer behavior and preferences through platforms like Amazon Prime Video and Amazon FireTV OS – used by more than 29% of Connected TV users – with their e-commerce and advertising algorithms.
Walmart will now have access to the key data of over 18 million active VIZIO Connected TVs – which has increased 400% since 2018. Simultaneously, Walmart Connect, Walmart’s closed-loop omni-channel media business, grew 30% in 2024. With these key data sources in place, Walmart now has the ability to continue to grow the value of its Innovation Partner’s Program by attributing CTV sales to Walmart store sales. This acquisition will also help Walmart generate higher margin revenue through the advertising business – which should help Walmart increase profits and compete more directly with Amazon’s higher margin revenue.
This acquisition also opens the door for Walmart to truly revolutionize the advertising landscape. Traditional advertising models have quickly become less valued from advertisers versus that of hyper-targeted advertising strategies. By combining VIZIO’s consumer insights with Walmart’s vast repository of customer data, the retail giant will be able to offer advertisers an unparalleled precision in reaching their target audiences – both online and in person. And, when it comes to the in-person experience, Walmart’s advantage is significant with their well established 4,500+ US brick & mortar stores. It is also important to point out that after this acquisition, Walmart will be able to better trace ad impressions through first party ecommerce payments for increased attribution capabilities. This eliminates the need for a third party vendor attempting to relay purchasing data to advertising dollars. Walmart will now be able to own every step of the consumer purchase journey.
While on the surface this acquisition is a smart one, success is not guaranteed. Walmart will be challenged with integrating VIZIO’s data in a way that will enable the company to drive actionable insights across the enterprise in both digital and physical channels. I expect this acquisition to be a successful one for Walmart, but the full benefits of the acquisition are likely still years away.
The trend of enterprises looking to control the full data cycle of their consumers will continue to grow as the concept of a cookie-less world continues to become a reality. This was a necessary acquisition for Walmart to remain competitive with Amazon’s growing ad business and data capabilities. Ultimately, Walmart will be able to offer better insights to advertisers and likely have more pricing power. I expect that this acquisition will help Walmart and their $100 billion e-commerce business, finally, be on a clear path to profitability.
-Jim
