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Walmart tests moving its in-store ad screens from the deli counter into the aisles
Ryan Mayward, Walmart's head of advertising, says higher-traffic endcap placements are in testing, in a business he puts at more than 70% margins against roughly 5% in core retail. Shoppers surveyed by Grocery TV mind shelf-level screens most.
The Board Room · Leadership desk
What happened
- Walmart's head of advertising, Ryan Mayward, said the retailer is testing ad screens in higher-traffic areas such as aisle endcaps, showing current inventory and pricing for sponsored products.
- Walgreens said it is working with in-store advertising firm Looma to put screens in about 1,200 locations from October, serving ads near specific merchandise.
- Looma projects that most major chains will run 100 to 200 screens per location within the next seven years.
- A Grocery TV survey found shoppers are comfortable with ads in apps, at store entrances and over the deli counter, and much less receptive on cooler doors and store shelves.
- "We do see a meaningful opportunity there to have more engaging screens throughout the store," Mayward said at a Goldman Sachs conference.
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Why it matters
- constraint Traffic and tolerance point in opposite directions here: the aisle and shelf positions that catch the most shoppers are the ones the survey scored lowest, so each screen placed deeper into the store buys revenue at some cost to the trip.
- capability A screen network gives a chain a second thing to sell in the same square footage, priced to brands and billed on placement, without adding merchandise volume.
- decision Every chain adopting screens has to rule on non-endemic advertising before a sales team starts quoting it; Walmart has so far kept its fast-food, insurance and car-dealer advertisers on Vizio and in its app.
- precedent If Looma's seven-year projection holds, fleets in the hundreds of screens per store become the expected build, and running them becomes a standing cost line for chains that follow.
Mayward put a number on why chains want the screens. Walmart Connect is seeing profit margins of more than 70%, he said at a Goldman Sachs conference this week, against roughly 5% in the core retail operation [8]. Divide one by the other and a dollar of ad revenue carries about fourteen times the profit of a dollar of merchandise revenue [1]. He also said where he expects that growth to come from: "Ads growth can also happen outside of the dynamics of our e-commerce business" [9].
Walmart's screens today sit mostly around the perimeter, in areas like the deli, the bakery and the electronics section [3]. Those are close to the places the Grocery TV survey found shoppers accept, along with mobile apps and the front entrance [7]. The test Mayward described goes into aisle endcaps, carrying live inventory and pricing information meant to pull a shopper down an aisle toward a sponsored product [2]. Cooler doors and store shelves scored worst in the same survey [7].
Amazon has written that limit into its rules. Its spec sheet for screens in Whole Foods Markets keeps ads mostly to products the store actually has in stock, allows outside brands on front entrance displays, and says ads should be "designed to inspire and inform" shoppers and may not be noisy or distracting [10].
Walgreens is returning to in-store display advertising after an earlier attempt that replaced cooler doors with TV screens, which Business Insider described as ill-fated [11]. At the density Looma projects for major chains, the Walgreens fleet alone would run between 120,000 and 240,000 screens [2]. Looma already supplies Kroger, HEB and BJ's Wholesale Club [6], and brands under the Albertsons banner have seen jumbo displays appear at entrances and in produce sections since a test launched last year [18].
The demand-side evidence comes from one interested party. Grocery TV, a retail media network, found shoppers were 2.5 times more likely to consider a product presented in a context relevant to their situation, and that nearly two-thirds reported buying something after seeing it on an in-store screen [19][12][13].
For a brand, an endcap becomes a placement bought from the retailer's advertising business [1]. Business Insider's report does not include ad rates or in-store ad revenue for any of the chains, or say whether spending on screens is new money or money moved out of merchandising budgets [20]. Mayward said Walmart is "really excited about using the store and introducing new advertising services" [14].
What to watch
- Whether Walmart puts non-endemic advertisers, the fast-food chains, insurance agencies and car dealerships now running on Vizio and in its app, onto in-store screens.
- Whether the Walgreens rollout with Looma reaches all of the roughly 1,200 planned locations after the cooler-door experiment was pulled.
- Whether any chain reports in-store screen revenue or rate cards separately from its wider retail media line.