Even Walmart needs a side hustle. Here are 4 other ways the store chain makes its money – besides selling merchandise.
- Walmart is the world's largest retailer, with more than 10,000 storefronts around the globe.
- But the Bentonville, Arkansas-based company is relying more on non-store business to drive profits.
Even Walmart needs a side hustle.
The Bentonville, Arkansas-based retail giant is currently the largest retailer in the world, with more than 10,000 stores globally.
But to stay ahead of competitors like Amazon, Walmart has diversified its portfolio and bolstered non-storefront businesses.
From data analytics to small business delivery, here are four side hustles Walmart uses to drive profit.
Thanks to the help of Chief Revenue Officer Seth Dallaire, a former Instacart C-suite executive and Amazon advertising leader, Walmart Connect is one of the company's quickest-growing business segments. The retailer's advertising arm brought in $2.7 billion in revenue in 2022, a 30% increase from the year prior.
Walmart rebranded its ad platform at the start of 2021 and signaled its plans to expand its business. The platform's name has gone through a few iterations since it launched as Walmart Exchange in 2014 — two years after Amazon launched its original advertising arm. As e-commerce sales spiked at the beginning of the coronavirus pandemic, retailers have been racing to leverage their digital advertising offerings by placing ads on apps and websites to generate more sales.
Under Dallaire, Walmart Connect recently moved to a second-price auction model. Suppliers and third-party marketplace sellers can pay as little as a penny more than the next highest bidder on the platform, which helps keep costs down. He also gave third-party marketplace and smaller sellers more access to data.
Like Walmart Connect, Walmart Luminate — a data monetization platform — has grown in spades since its launch in October 2021.
Walmart Luminate allows suppliers to access information on shopper behavior, customer perception, and more. Though Walmart doesn't often publicly disclose numbers on this product offering, it said that it grew by 75% quarter-over-quarter in the second quarter of last year.
"What we're doing is groundbreaking — not just for Walmart but for the industry in itself," Mark Hardy, Walmart's head of data ventures, previously told Insider. "We're building the right ecosystem that drives the right insights in a very agile manner, but then allows us to quickly apply those insights to then become more relevant to the customers."
Walmart Fulfillment Services
A copycat of Amazon's Fulfilled by Amazon, Walmart Fulfillment Services (WFS) launched in 2020 for third-party marketplace sellers to ship and store products using the retailer's warehouses.
Walmart has been working hard to increase its number of sellers on Walmart Marketplace. As of fall 2022, close to 200,000 third-party sellers listed products on Walmart Marketplace — about twice as many compared to the summer of 2021, according to estimates from Marketplace Pulse, an e-commerce analytics firm. For comparison, Amazon said it has nearly 2 million third-party sellers on its marketplace.
Through its packaging and shipping arm, Walmart says it guarantees two-day shipping to anywhere in the contiguous United States, excluding peak season months, which are September through January.
Walmart GoLocalWalmart is even trying to make extra money by offering a delivery service business for other businesses.
Launched in the summer of 2021, Walmart GoLocal allows businesses to arrange local deliveries with the retail giant. By the end of 2022, Walmart GoLocal delivered from more than 5,000 business and retail locations.
Tom Ward, then the company's senior vice president of last mile, said in August 2021 that the business would be available in suburban and rural areas, typically an area where other delivery providers struggle.
"Through Walmart GoLocal, any merchant from national retailers to small town shops can use Walmart's growing delivery platform to power their local delivery efforts. The service is white-label, in that our clients brands are front and center."
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