Walmart is sitting on an advertising opportunity that looks a lot like the one Amazon turned into a profit engine, according to The Information. The retailer’s ad arm, Walmart Connect, is scaling fast, and The Information frames it as the company’s clearest path to Amazon-style margins. What stands out here is the model itself: sell ads against your own shoppers, and you turn a low-margin retail business into something that prints money.
This matters now because retail media has quietly become one of the fastest-growing corners of the ad market. Amazon built a business worth tens of billions of dollars a year by letting brands buy placement in front of people who are already reaching for their wallets. Walmart wants the same thing, and it has the scale to chase it.
📊 Why the retail media playbook works
Retail media is attractive for one simple reason: the data. When a shopper buys through your store, you know exactly what they purchased, when, and how often. That closes the loop between an ad and a sale in a way Google and Meta can only estimate.
- High margin: Ad dollars drop to the bottom line far more efficiently than grocery or general merchandise sales.
- First-party data: Purchase history beats inferred interest, especially as third-party cookies fade.
- Measurable outcomes: Brands can tie spend directly to units sold, which makes budgets easier to defend.
Amazon proved the ceiling is high. Walmart’s pitch is that it can reach shoppers Amazon doesn’t, particularly in physical stores and in grocery, where Walmart is the giant.
🤖 Where AI enters the picture
The engine under modern retail media is machine learning. Targeting, bidding, and ad ranking all run on models trained on purchase behavior. As those systems improve, the same shopper data produces better predictions, higher click-through, and more revenue per impression. This is the flywheel Amazon rode, and it’s why retail media is really an AI story wearing a marketing label.
Generative AI is now sharpening the edge further. Brands are using it to spin up ad creative at scale, and retailers are experimenting with AI shopping assistants that will eventually become new ad surfaces of their own. Whoever owns the shopper relationship owns the prompt, and the prompt is where the next round of ad inventory gets built.
That’s the competitive stakes. Amazon, Walmart, and a growing list of retailers from Target to Instacart are all racing to convert shopper data into ad revenue before AI-driven shopping assistants reshuffle who controls the transaction.
🧭 What to watch over the next 1 to 3 years
The Information’s framing points to a shift that’s already underway and will accelerate:
- Margin mix changes. Expect Walmart and its peers to lean harder on ads to prop up profits, since retail margins alone won’t cut it.
- AI becomes the moat. The retailer with the best models and the cleanest first-party data wins the auction, not the one with the biggest catalog.
- New ad surfaces appear. Voice assistants, in-app AI shopping helpers, and connected TV tied to retail data all become inventory.
💡 Practical takeaways
- If you’re a brand or advertiser, treat retail media networks as a core channel, not an experiment. Test Walmart Connect alongside Amazon and measure incremental sales, not just clicks.
- If you’re building AI ad tech, the buyers are here. Retailers need targeting, creative, and measurement tools, and they have budgets.
- If you’re a strategist, watch which retailers invest in AI infrastructure. That spend signals who’s serious about competing with Amazon on ads, not just on shelves.
Walmart has the shoppers and the data. The open question is whether it can build the AI muscle to match Amazon’s head start. You can find the full breakdown at The Information.