But what's the focal point of the company’s growth for Q1? Despite challenges like a fire across its largest fulfillment center, which forced Walmart to take a costly hit, the company’s consistent investment into additional profit centers like retail media and data monetization are proving resilient and rewarding.
Walmart Luminate Sees Robust Growth
Brett Biggs, Walmart’s executive vice president and chief financial officer, stated its new data monetization business, Walmart Luminate, had over 75% growth quarter-over-quarter “as more supplier partners collaborate with merchandisers to utilize new customer insights in our platform.”
The company launched the platform in late 2021, describing a system that analyzes data from Walmart’s hub of consumers and offers insights into audience behavior, perception, and channel performance for the brands at Walmart.
John Furner, president and chief executive officer of Walmart U.S, stated the company’s data ventures are important pieces of Walmart's flywheel. A major cog in the wheel is Walmart’s retail media arm, which has seen substantial growth as well.
Walmart Connect Continues to Scale
During the earnings call, Biggs said the company is “making strong progress” in many of its newer, higher margin initiatives like Walmart Connect, which is growing as the brand expands self-serve capabilities and offerings.
In the first quarter, the business was up about 30%, and McMillon expects Walmart’s ancillary businesses to continue growing.
An Outside Perspective
Sean Turner, CTO and co-founder of Swiftly, agrees that Walmart's advertising strategy can help shoppers reap the rewards of personalized, manufacturer-funded discounts.
“Retailers can leverage the cash flow to blunt the impact of inflation and help grow market share,” said Turner in a statement. “Brick-and-mortar retailers who are struggling should take a page out of Walmart's playbook and enable their own digital platform and retail media network.”
According to Turner, Walmart has been better positioned to bounce back from inflation pressures and a major drop-off in grocery sales by prioritizing its high-margin advertising business and leaning into its digital platforms and retail media network.
Part of the overall strategy to grow the advertising business is to raise income at levels that will allow the company to lower costs for consumers, said Furner.
Kathryn McLay, CEO of Sam’s Club, is also seeing a boost from an ad tech perspective, stating that Flipkart in particular, is “doing a really nice job here in building out that platform and supporting small sellers as well as adding business and new revenue streams.”
Walmart Continues Expansion Into Delivery, Healthcare, and Tech
Walmart has also invested in its delivery infrastructure, and continues its expansion into the healthcare space.
According to McMillon, Walmart GoLocal continues to add new partners for its delivery platform, which has reached more than 1,600 delivery points in the U.S.
“Our teams did a great job of pivoting to serve customers and members through delivery,” said McMillon, pointing to the company’s international efforts amid COVID-related closures. “They stepped up as stores and clubs closed and demand for delivery spiked. Overall, the international segment had another good quarter.”
The company also recently closed on several transactions through its fintech partnership with Ribbit Capital, acquiring One Finance and Even, initiatives that Briggs expects will represent large revenue and profit opportunities over the next several years.
“Around the world, we can help our customers and members transact seamlessly, digitally, and help them strengthen their lives financially,” said McMillon.
As for healthcare, the company held the grand openings of four new Walmart health centers in Florida, with plans to open another one next month.