Advertising on Walmart.com comes with many of the same challenges as Amazon: pricing, inventory, and ratings and reviews are critical factors that determine how advertising performs. But Walmart.com also presents brands with a largely untapped opportunity, allowing them to reach consumers on a site that has far fewer competitors than other ecommerce platforms.
While there are 48 customers to 1 seller on Amazon, according to our 2022 State of the Walmart Seller Report, there are 1,918 customers to 1 seller on Walmart.com.
And, as Walmart anticipates welcoming 40,000 new sellers to its marketplace in 2022, brands should move quickly to broaden their reach by selling and advertising on Walmart.com before competitors list their product catalogs on the platform.
I’m Connor Folley, Co-founder and General Manager of Downstream by Jungle Scout. I have two decades of experience in advertising and have worked within the walls of Amazon. These are my top strategies for overcoming challenges and embracing opportunities when advertising on Walmart.com in 2022 — and my predictions for the future of the platform.
Top Challenges for Enterprise Brands on Walmart.com in 2022
As we noted in our 2022 State of the Walmart Seller Report, brands on Walmart.com face a number of challenges, including mitigating supply chain disruptions, managing an advertising strategy, gathering insights, and efficiently spending ad dollars. Fortunately, there are methods and solutions to overcome these challenges and take your brand to the next level.
Supply Chain Disruptions
82% of brands on Walmart.com say that they were affected by supply chain challenges in 2021, according to our State of the Walmart Seller report. In fact, 54% of brands on Walmart.com had delayed inventory orders and shipments, while 43% of brands on Walmart.com couldn’t order new inventory from their suppliers.
Brands have long been impacted by supply chain issues during the pandemic – and recent factory closures due to COVID-19 have added fuel to the fire. 46% of brands on Walmart.com say that COVID-19 and its effects have caused them to go run out of particular products in their catalogs.
To contend with supply chain disruptions, brands on Walmart.com have taken a number of steps from launching new items to discontinuing products. Some brands have moved to a self-fulfillment option, decreased their PPC bids to slow down sales of low-stock products, or rented more inventory storage space.
Do the legwork and clearly understand how you want to prioritize your products. I recommend setting specific weeks of cover thresholds at which you want to pivot your advertising. If you know based on your inventory and demand at six weeks of cover that your inventory is getting thin, you know it’s time to start driving demand to another SKU.
Weeks of cover (WOC) = the number of weeks of on-hand fulfillable inventory based on sales for the past 30 days
The worst-case scenario is that you drive your product out of stock and your listing is suppressed in the search results for this reason. In this case, you will lose impressions and clicks. However, if you prepare for this scenario, you can distribute that demand across more of your product portfolio and direct consumers to in-stock SKUs. Make certain you are factoring in demand spikes driven by key dates like Black Friday or Back to School rather than estimating your WOC using lower demand periods.
Maintaining operational efficiency is a challenge because of scale. Brands might have more than 10,000 SKUs on Amazon and the same on Walmart.com. That’s a lot to get your arms around when ecommerce competitors are matching your prices and constantly changing inventory constraints are impacting your brand.
Walmart.com is a highly fluid environment, and brands need to prepare to mitigate these challenges to successfully advertise their products. It’s nearly impossible to effectively adjust for dynamics without the help of technology like Downstream – and proper planning through strategic goal setting.
Start with your business objectives. Align your organizational aims with your goals for a specific ecommerce platform such as Walmart.com. In some cases, you may want to drive top-line growth no matter what, while, in other cases, you might want to drive profitable growth or maintain market share.
Once you have your goals set, you can align on your KPIs and tactics: Do you want to upsell products that you already know have a lot of traffic, drive greater profitability, grow market share, or sustain your position in the market? Your end goal will impact how you are approaching advertising on Walmart.com.
Advertising strategies are not a one-size-fits-all: What might work for your brand might not work for another. If you are having challenges arriving at your objectives, and which strategies work best for your brand, I would encourage you to engage a managed service provider that offers the high-level strategy setting expertise to ensure your team can get the most impact from technology like Downstream.
Brands are looking to get the most out of their ad spend on Walmart.com, just as they would on any advertising platform. Oftentimes on retail media, brands think of RoAS or ACoS as their guide post. However, there is no one-size-fits all: The metric that you use as your north star should change based on your business objectives.
Your competitors are aiming to get an edge over other brands. The competitive landscape on Walmart.com is unique because you’ve got the largest brands and advertisers on earth competing against micro businesses. It’s incredible to think both these kinds of businesses are going head-to-head on the same platform.
Technologies such as Downstream allow you to automate your ad spend to meet your specific business objectives. Downstream’s capabilities allow you to focus on goals such as maximizing RoAS or the growth of top-line sales. Its features range from hands-on rule-based automations that allow you to be specific and granular to full-on machine learning automations that enable the technology to take the wheel.
These automations exist on this spectrum because we realize that there’s a level of trust that needs to be established with our customers before they feel comfortable with allowing our software to optimize their campaigns for them. Once customers become acclimated with Downstream, they can ultimately benefit from greater operational efficiency as they let our software adjust ad spend to achieve their goals.
Measurements and Insights
Understanding why performance is fluctuating on ecommerce sites can be a challenge for brands. Just as Amazon can be a confounding black box, so can other ecommerce platforms like Walmart.com. Performance on these sites is not as transparent and easy to understand as foot traffic within a retail location.
Brands are accustomed to having this kind of information at their fingertips in a traditional retail environment. For this reason, brands are seeking greater insights and understanding for what’s driving fluctuations in their business and where they can find growth opportunities.
You can monitor your ad performance on Walmart Connect. This portal allows you to access on-demand reports and campaign reports, which are created 24 hours after the start of a campaign. In cases when you need specific advertising data, Walmart Connect can generate custom reports. (You can also access an item health report.)
Technologies such as Downstream, however, allow you to automate your reporting. Downstream’s dashboards enable you to measure business performance alongside campaign effectiveness and spot new opportunities without manually creating reports. You can save additional time by cloning template dashboards and customizing them to meet your needs.
The Road Ahead: Walmart Advertising Predictions
Across retail media, over-the-top television (OTT) is a large opportunity. I’m excited about the future in which television advertisements are less of an inconvenience and more like helpful reminders about, say, the dog food you intended to buy earlier that day, allowing you to purchase it right between shows.
I expect that Walmart will be doing a lot more with video on their site. I’m also curious to see how much of this innovation translates over to their brick-and-mortar trade shopper marketing opportunities. There might be a performance-based advertising solution to digitize shelf slotting at a physical store.
I would expect to see Walmart continue to further leverage their brick and mortar business alongside their ecommerce business as a competitive advantage.
More broadly, ecommerce platforms have the opportunity to focus more on monetizing traffic in the form of clicks and eyeballs over focusing on profit margins for individual transactions. In that sense, their ecommerce business is becoming more like Google or Facebook. It’s really about driving more traffic so that they can monetize it.
That’s going to be an interesting dynamic to see play out on Walmart.com – and a whole host of other retail websites.
Future Advertising Strategies
Building and executing a Walmart.com advertising strategy is a continuous process. As Walmart.com develops its burgeoning platform, brands need to study the competitive landscape, develop and test new strategies, and iterate with new data. By taking this approach, brands can position themselves for success on Walmart.com – and in the greater arena of ecommerce.
About Connor Folley
Connor is the General Manager and Co-founder of Downstream by Jungle Scout. Connor led teams internally at Amazon and on the agency side, and his understanding of Amazon and its unique demands is truly one of a kind. The world’s largest consumer brands have sought Connor’s ability to decode the confounding black box that Amazon represents, and hundreds more use Downstream’s technology to drive share on the platform.
Downstream is the leading automated ecommerce advertising and analytics solution and is part of Jungle Scout’s suite of ecommerce solutions. Jungle Scout is the leading all-in-one platform for selling on Amazon and beyond. Founded in 2015 as the first Amazon product research tool, Jungle Scout today features a full suite of best-in-class business management solutions and powerful market intelligence resources to help brands, agencies and investors manage their ecommerce businesses.