← Retail Media Breakfast Club
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Transcript13 lines
- [00:00]
A
When I sat down with Harvey Ma at Cannes this week, the hotel suite we were sitting in was aggressively air conditioned, a thrilling contrast to the sky high temperatures outside. The climate control meant that Harvey was able to keep on his customary pattern blazer rather than the linen that most of us were sweating in up and down the Croisette. But there were a few things that Harvey was at pains to clear up. Following the announcement that Walmart is pulling its whole global advertising business closer together, including Sam's Club. Now, I've been following Sam's Club retail media story for about two years now. I first profiled Harvey for Forbes back in early 2025 where he shared how he started out as a mechanical engineer who texted his boss after his first digital marketing meeting to say that he might be in the wrong job. He shared how he takes Walmart's technology for a test drive and respects it for the club environment. And most recently, I wrote about how Sam's Club is placing a experiential bet with things like sponsoring an IndyCar car race and car park activations to bring branded experience into the club environment. Now, for two years, the through line through all of that was the same. Sam's Club was the member centric retailer, the network doing it differently. And so when I sat down with Harvey at Cannes this week, just days after that announcement from Walmart, I went in curious about how this maverick story survives contact with the mothership. So just a quick recap of what was announced first before we jump in. On June 2022, Walmart set out a new vision for its global advertising business. Walmart Connect Us, Walmart Connect International and Sam's Club all pulled in closer alignment under Seth Delaire, the Chief Growth Officer of Walmart Inc. What this means is shared technology, shared tools, shared platforms. And the headline change for the club is that Sam's Club member access platform is now called Sam's Club Connect, a name that pulls it under the Walmart Connect umbrella. And the official framing is careful. The three networks will operate separately to serve the unique needs of their markets while being increasingly aligned. And that phrase operates separately. Increasingly aligned is the whole thing. And that is also where the tension lives that I wanted to click into. Let's jump in now. Here's the part that is easy to miss in a rebrand announcement like this. The reality is that the two banners have been sharing some infrastructure for quite a while now. Sam's Club already shares some of Walmart's tech, borrowing some of these capabilities and adapting it for a club environment that isn't nearly as sku intensive as mass, Harvey told me in that profile 18 months ago. It's like borrowing the keys to the car and taking it for a test drive. And this arrangement predates that rebrand by several years. Now what might be new is the direction of travel. It's no longer just Sam's Club borrowing from the parent Harvey described Value moving in both ways. Let's listen.
- [03:32]
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The measurement suite that we have is obviously incredibly robust because we have the luxury of being one to one member, deterministic and longitudinal. That's sweet.
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Everyone walking into the store has to scan in.
- [03:45]
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That's right. So that same methodology can be applied to a Walmart business, just done slightly differently. So in those cases there is goodness to be shared on how we predict how we model behavior over the course of time.
- [04:03]
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And then again in the other direction. The experiential muscle that Sands Club has been building goes back to Walmart.
- [04:10]
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There's also a layer of experience which we can bring back to Walmart. So demos and samples, for example, are a bread and butter staple of Sam's Club or any warehouse model. But that shouldn't be only limited to warehouse. In core retail, inexperience is just as important. We just happen to been focused on it with a retail media lens for
- [04:31]
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the past two years so far so synergistic and on the plumbing, the measurement methods, the modeling, the experiential know how. Pulling those two banners together makes obvious sense. Build it once, share it twice.
- [04:48]
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Synergies I think are the key word. And then combining efficiencies, technology and talent are natural byproducts of that.
- [04:57]
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And that's the business case. Two networks under one roof. No longer rebuilding the same tooling separately and trying to frankenstein it together later. Miracle Ads is the ad tech solution trusted by rakuten and over 50 global enterprise retailers. That's because Miracle Ads was built with both 3Pmarketplace sellers and 1P suppliers in mind. Both advertiser audiences demand a seamless advertising journey from onboarding to reporting. You can offer everything from sponsored products to video ads all in one solution. Learn more@miracle.com that's M I R A K L.com but here's the part that may not have a clean merge. I asked about the customer overlap because if the pitch to advertisers is connectivity across two banners, the obvious question is is how much the audiences actually have in common. You'd imagine that you could extend a campaign across Walmart and Sam's Club to reach the same people more often or to reach more people. Either way, you need to know how much the two shopper bases overlap. And so that's why Harvey's answer actually surprised me.
- [06:20]
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We don't publicly disclose that number, but what I can tell you is that the demographic that shops massive, the demographic that shops warehouse, the overlap is potentially smaller than you might think. And the reason for that is all of the information that you would traditionally think of for a warehouse shopper. So think household income, think location. I'll use an example. Many of our warehouses, if you live in the inner city, you are not likely going to haul a 48 pack of water back home on the link, but in the suburbs, you would. So, and you've got to remember, in our urban dense areas for mass, that's an incredibly rich business with customers. And so while yes, there is certainly overlap and those things can actually drive mutual synergy, you might be surprised that the overlap is potentially less than you think, because the behavior is different.
- [07:11]
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So this was interesting to hear because the pitch for pulling those banners together leans on scale connectivity, reaching customers and members wherever they shop. But if the mass shopper and the warehouse member are actually substantially different, people shopping differently for structural reasons that aren't going away, that isn't a data gap that you can close with a shared tech stack. But Harvey was insistent that the differences are the point and not a problem to be smoothed over. So when I ask what people don't understand well enough about the announcement, I this is where he went.
- [07:49]
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The biggest one is this was not done. Because we are absorbing teams, countries, segments to become one blob of an ads ecosystem, we will still maintain the individuality and represent the preferences that each country, each channel, and each team should be focused on. And so the combination of a global ads ecosystem does not mean that my new focus is not only going to be on maximizing search, it'll still be a cortex tactic of ours, but that individual nature of a club that makes it so special to our members, and the individual nature of international, which makes it so special across countries that DNA will remain even though we are now united under one family.
- [08:34]
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While the infrastructure should converge with things like shared measurement, shared modeling, shared experiential playbooks, lower transaction costs for advertisers, and the things that make each of these two retail banners worth advertising on separately because of the distinct shopper, the distinct behavior, the access, the member relationship, those have to stay distinct, or the whole proposition flattens into one blob that Harvey is at pains to say that this isn't so. Just wrapping up here. A couple of weeks ago I shared a debrief of an IAB white paper about ways through the commerce media squeeze. There's so many commerce media networks. Will they all survive? What does the future look like? Are we going to see consolidation? Are we going to see new teams owning retail media within retailers? Definitely. Go back and check out that piece for a few of those propositions put forward by the iab. But consolidation and cooperatives and federations is one proposed way through this commerce media squeeze. But the Sam's Club Connect rebrand is a useful reminder that even for the biggest retailer in the United States, aligning with a single sibling banner, one that it already owns, already shares some technology with, already sits beside under the same corporate growth org. This isn't an immediate one plus one equals five. The parts that consolidate well are the parts that might not have been a major differentiator in the first place. The parts that are the differentiator resist consolidation by design and the people running them know it. Which is why Harvey kept drawing the line around them. The annually paid club membership still has to mean something different from a Walmart loyalty card. Otherwise why have two.