Walmart's dramatic purchase promises the retailer access to data and more space for advertising as it aims to grow beyond merely selling goods. The company announced on Tuesday that it has reached an agreement to buy television manufacturer Vizio for $2.3 billion – a decisive move by the retail giant, betting that advertising revenue will play a significant role in the future. Through the deal, Walmart not only gains access to more opportunities to sell advertising through Vizio-made TVs but also the capacity to provide entertainment for customers, according to the retailer.
Last week already, The Wall Street Journal had reported that Walmart and Vizio could agree on a possible deal, which drove up Vizio's stock price. The purchase of Vizio gives Walmart access to a TV operating system, thereby granting the company more room for advertising and access to viewer data - at a time when it is striving to expand its advertising business. Walmart has been working for years on tapping new revenue sources besides the sale of goods in stores and online.
With its brand Onn, Walmart already has a large assortment of private label electronics products, including chargers, speakers, and televisions. The Onn televisions operate on Roku operating systems. According to Seth Dallaire, the Chief Revenue Officer for Walmart U.S., the acquisition of Vizio is a response to both the changing nature of the company's revenue model and the television industry. With streaming and internet-enabled TVs, the television business has evolved into a software-based business, he explained.
According to Dallaire, it is particularly attractive for Walmart to sell advertising through internet-capable TVs, as the company has access to buyers and data. Following the completion of the deal, Walmart will continue to sell several TV brands, as it already does, Dallaire said. A company spokeswoman explained that the acquisition is expected to be completed in the current fiscal year, by summer at the latest, pending regulatory approval.
The Walmart Deal Shows How Important Customer Information and Advertising Space Have Become for Retailers as They Strive to Compete with Amazon in the Growing Digital Advertising Market. In Addition to Its E-Commerce Giant Status, Amazon is One of the Biggest Players in the U.S. Advertising Sector, Second Only to Google's Parent Company Alphabet and Meta Platforms Owner Facebook.
Amazon is also building its own smart TV business. Competition for advertisers is intense among retailers, with Best Buy, Kroger, Instacart, and others vying for business. According to Insider Intelligence, advertising dollars will continue to flow into the retail sector, which is expected to generate revenues of $59.6 billion this year, an increase of almost 30% compared to 2023.
