Walmart released its Q3 earnings this week and things were looking up for the retail giant. Their advertising revenue grew about 30% since Q2.
On the earnings call, President and CEO Doug McMillon attributed the growth to “More items and sellers driving GMV (Gross Merchandise Volume) and improving customer satisfaction.” He continued that success with advertising is “mutually reinforcing. If we double-click on advertising with Walmart Connect in the U.S., we see it’s benefiting from growth in e-commerce and from improvements made within the business itself. And we’ve seen strong growth in return on ad spend over last year.”
Walmart Connect. Connect is Walmart’s self-service ad platform that was recently announced. The platform allows retailers to create an account and upload their product SKUs to the Walmart platform, without the need to go through an approved vendor and wait three days for approval.
As with advertising, growing our marketplace business also unlocks fulfillment services opportunities through both fulfillment centers and last-mile delivery. We’re scaling these businesses in the U.S., and we’re starting to ramp up in Mexico and Canada. The team in Mexico increased the number of sellers on our marketplace by 20% during the quarter. In the U.S., the marketplace on Walmart.com now offers about 370 million SKUs.
That’s an increase of more than 50% from Q2. Many of these sellers want to leverage our fulfillment network. They also want to use our advertising capabilities to drive demand, and we’re making that easier for them. We recently shared that all new marketplace sellers in the U.S.
will be automatically onboarded onto our self-service ad platform. We believe this seamless integration will help both businesses scale even faster. What you see in our results is that we can run compelling stores and clubs, scale of first- and third-party e-commerce business, and connect them together in an omnichannel fashion that saves customers and members money and time. Our strategy unlocks growth opportunities for us and a thread that runs from digital retail to fulfillment and advertising, and opens up even more opportunities with health and wellness and financial services.
Roku, TikTok, and Snap partnerships. Walmart also expanded its own ecommerce platform by powering ads on TikTok, Roku, and Snap. Walmart will also have the capability to measure any sales that come from those ads.
Dig deeper. You can review the earnings announcement here.
Why we care. If you’re an ecommerce retailer or brand, Walmart might be a great platform to test if you’re looking to expand your reach and connect with new buyers.