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  • AI meets agriculture in Walmart’s newest supply chain play | Walmart Insights Newsletter

AI meets agriculture in Walmart’s newest supply chain play | Walmart Insights Newsletter

PLUS: How much should you be spending on PMAX?

Author

Zihan Lyu
April 09, 2025

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Welcome to Walmart Insights, your go-to newsletter for updates and analysis on the trends shaping retail and eCommerce at Walmart.

Editor’s Pick 🌟

Curious to know the optimal way to allocate your Google Ads budget? Fospha’s latest analysis of top performers reveals key insights into balancing Performance Max (PMAX) and Paid Search:

🥇 How Top-Performers Do It: For the highest-performing 25% of brands, a strategic allocation of around 55% of total Google budget to Performance Max and 12% to Paid Search appears to be the sweet spot for driving results.

🏢 Size Matters: Note, this optimal allocation does vary slightly between different brand sizes. Top-performing small brands were found to have a 52% PMAX / 15% Paid Search split, while top-performing large brands allocated more to PMAX, with a 59% PMAX / 9% Paid Search split.

Why? With extensive product catalogs and diverse customer segments, large brands can leverage PMAX's AI-driven optimization, while smaller brands benefit from the precision targeting of Paid Search to capture high-intent traffic while still leveraging PMAX for efficiency

Unlock the full potential of your Google Ads budget! Fospha’s new Performance Max and Paid Search Playbook is your guide to cultivating cross-channel synergies, reducing wasted ad spend, and maximizing blended performance.

Specialty Bites 🍪

ECOMMERCE INSIGHTS

Amazon and Walmart lead in online conversion rates, with Amazon achieving a 77% consideration conversion rate compared to Walmart's 60%, according to YouGov's data. Both companies excel due to robust omnichannel strategies and extensive first-party data, allowing highly personalized consumer experiences. These insights highlight critical drivers for success in eCommerce, particularly for marketers aiming to replicate these conversion-boosting strategies.

RETAIL STRATEGY SHIFT

Walmart is closing 11 underperforming locations in response to sluggish sales and increased pressure from eCommerce competitors, with a focus on enhancing efficiency and expanding its gas station network to optimize business operations. This shift signals a move towards strengthening digital presence while capitalizing on fuel sales, which has significant strategic implications for retail marketing professionals, exploring the interplay between digital and physical retail spaces.

STRATEGIC PARTNERSHIPS

Cropin has partnered with Walmart to enhance sustainable food sourcing through AI technology. This collaboration aims to improve Walmart's supply chain efficiency by optimizing yield forecasting and managing ultra-perishable crops, ensuring steady high-quality produce availability. This marks a significant advancement towards climate resilience in agricultural supply chains, providing marketing professionals with strategic insights on leveraging AI for improved market stability and sustainability.

RETAIL STRATEGY SHIFT

Walmart's membership program fuels growth in store traffic and online sales, as members spend significantly more than non-members, offering a competitive edge amid tariff challenges. This initiative boosts profitability, allowing Walmart to maintain competitive grocery prices and expand its advertising business. Such strategies illustrate Walmart's adaptability and resilience in an evolving retail landscape.

MANAGERIAL PAY IMPACT

Walmart's pay increase for store managers has fostered a sense of ownership, enhancing engagement and performance, particularly through shareholding incentives (Furner). In January, managers began earning $420,000 to $620,000 with stock grants and bonuses. Despite progress, Walmart anticipates slower growth and challenges from tariffs in 2025.

Expert Insights ✍ 

Walmart, Tariffs, and the New Rules of Growth: How Brands Can Thrive Amid Trade Tension

With the reintroduction of sweeping tariffs by Donald Trump—aimed at matching the duties imposed on U.S. goods by dozens of trading partners—import-dependent brands are staring down a new cost reality. For advertisers and growth marketers operating within the Walmart ecosystem, this isn’t just a supply chain issue—it’s a campaign challenge, a pricing question, and a creative brief all at once.

Walmart has long been a haven for value-conscious shoppers. Now, with inflation sticking and tariffs threatening to further drive up consumer prices, the pressure on brands to show value—and protect margin—is intensifying. Marketers can’t afford to simply run the same playbook. They must shift from performance marketing to precision commerce strategy.

First-party insights from Walmart Connect can be the difference-maker. Brands that layer pricing sensitivity data with SKU-level availability and tariff exposure can build smarter campaigns—promoting domestically sourced products, bundling value packs, or spotlighting tariff-free categories where they have strategic advantage.

This is also the moment to align media spend with margin resilience. Smart brands are using real-time inventory signals and predictive demand models to throttle campaigns by geography, timing, or supply-chain strength. A product hit by new tariffs may still perform—but only with retooled messaging, pricing justification, or strategic bundling to reframe value.

And the opportunity isn’t just defensive. Tariffs will inevitably cause portfolio reshuffles. That gives agile brands a window to claim white space through Walmart’s search and display architecture—especially in categories where competitors may retreat due to cost pressures.

Influencer Corner 📢'

We chatted with Amy J. Oelkers, TikTok’s GM, US Head of Commerce, about how the power of discovery on TikTok is driving commerce everywhere | TikTok for Business

📌 4 in 5 users are discovering brands through creators' recommendations.

📌 After discovering something on TikTok (via a creator), 45% of users continued searching for more information on the platform.

📌 1 in 4 users search within the first 30 seconds of opening the app (internal user data).

In our Shoptalk 2025 wrap up with ClickZ.com, one thing was clear | Lee Arthur

This industry is operating in a new reality. From full-funnel AI to omnichannel orchestration, the conversations weren’t speculative,they were tactical.

Here are the biggest shifts we heard on the ground:

🔹 AI is everywhere
“AI isn’t a concept -it’s a capability,” summed up by voices across the floor. From text-to-buy to media measurement, brands are moving from testing to scaling.

🔹 Omnichannel is baseline
“Omnichannel isn’t a trend - it’s the new baseline,” said Sam Carter, CEO at Fospha. The new standard is unified journeys online and off.

Optimization Hub ⚙️

BUSINESS MEASUREMENT FRAMEWORK

Breaking organizational silos is essential for building effective measurement frameworks, ensuring data-driven insights drive marketing success. By involving all stakeholders and focusing on real-world applications, businesses can align metrics with strategic objectives. Tailored frameworks improve communication and performance across departments, essential for today's competitive landscape.

SOCIAL MEDIA MARKETING

Instagram's new monthly recap feature provides creators with valuable insights into their content performance, including total views, follower engagement, and specific audience activity times. This feature aids marketers by offering actionable tips to enhance content strategy based on the unique behaviors of their audiences, fostering a more tailored approach to growth and engagement.

ECOMMERCE OPTIMIZATION

Adjusting the Google Ads bid strategy, specifically the Target ROAS, can enhance Shopping Ads revenue without reducing profitability for eCommerce businesses. Use Impression Share and Search Lost IS metrics to identify and rectify revenue loss. Gradual budget and ROAS adjustments ensure consistent performance improvement.

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