How Walmart unified a disjointed organization to make retail media work

Even as retail media is experiencing explosive growth, it is still trying to find its place in the marketing world. Is it mainly a profit center to grab brand marketing dollars for retailers pressured by the shift to lower-margin e-commerce? Is it just another part of the supplier-retailer deal like trade promotion funds? Is it all about driving immediate transactions, or can it build long-term brand equity? Walmart has been dealing with such questions in recent years as it revamped its once highly disjointed media operations, leading to their advertiser base increasing tenfold last year. Now Lex Josephs, VP of ad sales and ad tech partnerships for Walmart Connect, believes she's got some answers. Only a couple of years ago, Walmart Media Group included people handling e-commerce operations in California, store operations in Arkansas, and a mix of both at the former Jet.com headquarters in New Jersey. On top of that, sales of Walmart digital inventory were handled by WPP’s Triad Retail Media. But Walmart’s powerful merchants still controlled what got promoted in-store, and would sometimes exercise veto power on Triad ad deals if suppliers used them to find a loop hole to get around their merchandising decisions, according to people familiar with the matter. Then two years ago, Walmart brought digital ad sales operations formerly handled by the now-defunct Triad Retail Media in house and re-named Walmart Media Group as Walmart Connect. That “Connect” part speaks as much to what it’s trying to do internally as to what it aims to help marketers do with customers. Josephs in an interview said the transformation is part of a broader "One Walmart" effort to unify e-commerce and stores operations into a single omni-channel proposition for customers. To that end, Walmart unified its buying and merchandising teams for stores and e-commerce. And Josephs has been part of the effort to align media operations that report up through U.S. Chief Customer Officer Janey Whiteside, with merchandising operations headed by Chief Merchandising Officer Scott McCall. Josephs, who took on the role more than three years ago, said it wasn’t an overnight transition by any means. “The first thing I had to do coming in and in-sourcing this business from Triad, was I had to regain and earn the trust of merchants in Bentonville every day,” Josephs said. “We are a merchant culture that firmly believes in the advertising business. They understand it’s a high-growth business that has very different margins obviously than retail. But at the end of the day, it has to make sense for our culture, for the merchants, for our suppliers and ultimately for the customer.” Josephs said friction between media and merchandising hasn't entirely disappeared. “But it’s dissipated tremendously because of a couple of things,” she said. “First, we’re all Walmart employees. We all signed up for Mr. Sam’s mission. That’s a big change, because a third-party company was not Walmart employees.” Second, she said, was just making sure merchant executives understood that such things as search, and search advertising, on Walmart.com and the retailer’s app were helping customers – the ultimate boss in Mr. Sam's (a.k.a. founder Sam Walton’s) lexicon – get what they want. “We showed this is how it benefits the customer, thereby benefiting you,” she said. “If I had just come in saying, ‘I’m launching an ads business,’ that never would have worked. You have to explain the nuances.” Among those nuances is that while Walmart Connect wants to grow its ad business and sales for brands that pay the bills, it's ultimately about growing sales and market share for Walmart. “If we’re not helping the Walmart customers, and we’re not helping the Walmart supplier, and we’re not helping Walmart sales, then we’re not doing our job,” Josephs said. “I think a number of people in retail media right now are trying to become number one or number two. But I don’t necessarily know if they understand their purpose.” The quick hit of performance marketing -- driving immediate conversions – is only part of that, she said. It may be the only concern for most third-party sellers who are part of her advertiser base, but it's a different story for big brand marketers. One case in point was a back-to-school campaign Walmart Connect did with General Mills earlier this year, which Josephs outlined in a presentation she did with Sri Rajagopalan, chief omnichannel commercial officer for General Mills at Advertising Week New York, earlier this month. The outgrowth of General Mills’ Box Tops for Education program included work with frequent Walmart Connect partner LeBron James to raise money for teacher loan forgiveness and attract more people of color into teaching. The campaign included custom content created by Walmart, General Mills and James, shared via Walmart and the NBA star's social channels on Pinterest, YouTube, Instagram and in a radio ad. It also included ads on Walmart’s in-store TV and self-checkout screens, where QR codes popped up to drive downloads of Walmart’s mobile app. While it aimed to drive sales of General Mills products, it was also about building General Mills brand equity, Josephs said. “It was the first time we’ve seen the omni-channel customer engaging with a program in such a multi-faceted way,” she said, crediting much of the success to James and his “passion for equity and education.” Just as Walmart has had to work to unify disparate parts of the organization behind retail media, so too do many brand marketers. Josephs said she sees a range of situations, from suppliers where the shopper and brand marketing teams operate almost entirely independently, to those where they’re fully unified. She gave Mars high marks on the unification front, which she said was evidenced by a successful program targeting LGBTQ+ shoppers during Pride Month. Unified teams ultimately help drive programs that work for both generating sales and long-term brand strength, she said. “I’d say at the beginning, we started as a lower-funnel solution” only to drive instant sales, Joseph said. “Now that funnel has collapsed, and quite frankly the world has changed, we’re seeing more brand marketer and shopper dollars coming together.” Correction: An earlier version of the story said Walmart's media operations report up through U.S. Chief Marketing Officer William White. Walmart Connect reports directly to Chief Customer Officer Janey Whiteside.

How Walmart unified a disjointed organization to make retail media work

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