Key takeaways:
- Walmart’s chief growth officer says the company views retail media as digital merchandising, not advertising clutter, because it introduces customers to new brands and products.
- Dallaire says Walmart sees a direct causal relationship between delivery speed and conversion, with same-day and next-day fulfillment driving higher purchase frequency.
- On agentic AI, Dallaire says Walmart has already introduced ad placements into its own agentic tools and believes retail media will remain relevant as natural language queries replace keyword search.
Walmart’s retail media network, third-party marketplace, membership program, data products and connected TV business are not separate bets. They are, according to Seth Dallaire, Executive Vice President and Chief Growth Officer at Walmart, a single interconnected system designed to serve customers across every channel while generating the kind of margins that fund investment across the broader enterprise.
Dallaire laid out that thesis Wednesday at the Evercore ISI Consumer and Retail Conference in New York, in a wide-ranging conversation with Greg Melich, Head of Retail Broadlines and Hardlines Research at Evercore ISI. Melich noted that Walmart Connect, the company’s retail media network, is growing at roughly 40%. Dallaire described a business that took years to build correctly and is now scaling across segments and geographies.
Advertising as Merchandising
Dallaire, who joined Walmart in 2021 after building Instacart’s advertising business, has spent considerable effort making the internal case that retail media is good for customers, not just for the P&L. His framing positions advertising not as an interruption to the shopping experience but as a form of digital merchandising.
“Advertising is very similar to merchandising in the e-com space,” he said. “Advertisements contextually in a retail environment provide a lot of value for customers because they introduce you to new products, they introduce you to new brands, they introduce you to new price points.”
He acknowledged the risk of overloading customers and described a constant program of A/B testing to manage it. The digital environment, he said, allows Walmart to run experiments far faster and more cheaply than physical stores allow. He said it is far easier to run those tests digitally, reach a statistically significant result and then roll findings out across stores than to conduct the same type of experiment in a physical environment.
The data, he added, indicates advertising is net additive to conversion.
“What we find is that ads are accretive to the experience because it creates the opportunity for new brands or challenger brands to get time or attention from you while you’re shopping in the category.”
Walmart’s Vizio Investment
The acquisition of television manufacturer Vizio, completed roughly a year and a half ago, extends Walmart’s advertising surface into connected TV. Dallaire framed it as a logical extension of the retail media strategy rather than a move into hardware for its own sake.
“The real television business is now post-sale and it’s driven by technology and the operating systems that sit behind the glass on these devices,” he said. The value is Vizio’s operating system and the connected TV advertising inventory it generates, which complements what Walmart Connect does across e-commerce and physical retail.
Walmart Membership as Connective Tissue
Dallaire described Walmart Plus as the mechanism that ties the growth portfolio together. New e-commerce customers who begin with delivery often convert to membership after encountering delivery fees, and once inside the program, spend levels and purchase frequency shift materially.
“When you become a paid member, the amount of spend and wallet share that you give to us increases,” he said. “And as you use more benefits within the membership program, your renewal rates or the likelihood that you will renew increases as well.”
He was careful to frame membership not as a standalone P&L driver but as an accelerant across the system. A strong e-commerce operation is required to make the membership offer compelling, and the marketplace is required to make the assortment worth returning for.
Last week, Walmart announced it would rebrand its Canadian membership program to Walmart Plus, a sign of how the growth organization is extending U.S.-built platforms into international markets.
Walmart Marketplace Still Early
On the third-party marketplace, Dallaire described the business as in the early innings while noting that signals from sellers are positive. The core pitch to sellers is access to Walmart’s customer base across channels, combined with fulfillment infrastructure that makes fast delivery economically viable.
“We see a causal relationship between delivery speed and conversion,” he said. Products housed in Walmart fulfillment centers and delivering same-day or next-day see higher conversion than those shipping on slower timelines. “Fast fuels the frequency.”
He described an effort to standardize marketplace infrastructure globally under a build-once, scale-globally principle, the same approach applied to Walmart’s Scintilla data product, originally built for the U.S. supplier market and now being extended to Canada and Mexico.
AI and the Agentic Question at Walmart
Dallaire spent considerable time on artificial intelligence and whether the rise of agentic shopping tools threatens the retail media model. He acknowledged the question is real but expressed confidence that advertising will find a role in agentic environments.
“I believe that advertising will have a role to play because it helps customers shop. It’s not an interruptive experience. It’s contextually relevant,” he said. Walmart has already introduced advertising placements into its own agentic tools and is continuing to experiment.
More interesting to him is a behavioral shift in how customers are querying.
“We may see a prompt around: ‘I’m looking for a detergent for my child who has sensitive skin. Can you recommend something that’s fragrance-free?’ That’s not historically how people have searched for fragrance-free detergent,” he said.
If natural language queries are becoming the primary commercial interface, he said, Walmart’s systems need to be oriented around retrieving and surfacing the right answers to those prompts.
On scaling AI, Dallaire said the organization is prioritizing doing it correctly over doing it quickly.
“If you scale fast but poorly, there’s a whole bunch of tech debt you may assume or things you may have to unwind,” he said.
Walmart is engaging with major hyperscalers to understand how customers are using their tools while applying those learnings to proprietary systems including Sparky, its internal agentic tool. On human oversight, he was direct: in the marketplace, automated catalog ingestion needs human moderation to ensure quality.
“They’re better together than if we just allowed an agent to operate on that independently without any moderation,” he said.
The Margin Argument
Dallaire described the businesses inside the growth organization, including retail media, data subscriptions, membership and marketplace seller services, as carrying a materially different profit profile than traditional retail. That differential creates optionality across the enterprise. Advertising and membership income, he said, can be deployed toward new stores, remodels or price investment, consistent with Walmart’s everyday low cost and everyday low price principles.
The underlying logic is that more omnichannel volume brings more marketplace sellers, who want to advertise, which generates operating income that funds investment across the broader business.
“That’s a big crank of the flywheel,” Dallaire said.
