Retailers, among other advertisers, had already been exploring how third-party cookies’ elimination would alter targeting capabilities based on activity in Google’s Chrome web browser. That journey has opened up new opportunities for alternatives. Examples include those offered through retail media networks that leverage first-party data on customers.

In a July 22 blog post, however, Anthony Chavez, a vice president working on Google’s Privacy Sandbox initiative, explained that his company is changing course.

Google’s decision to cancel third-party cookies deprecation

“Instead of deprecating third-party cookies, we would introduce a new experience in Chrome that lets people make an informed choice that applies across their web browsing, and they’d be able to adjust that choice at any time,” Chavez wrote. “We’re discussing this new path with regulators, and will engage with the industry as we roll this out.”

Google originally started its Privacy Sandbox project to explore options for user privacy on the open web. Up until this week, that vision did not include third-party cookies, the code used on websites that can live on in web browsers across multiple site visits to track user activity and inform targeted advertisements delivered to those users. Along the way, the Privacy Sandbox team has been working with industry and government representatives to craft new solutions.

“Throughout this process, we’ve received feedback from a wide variety of stakeholders, including regulators like the UK’s Competition and Markets Authority (CMA) and Information Commissioner’s Office (ICO), publishers, web developers and standards groups, civil society, and participants in the advertising industry,” Chavez said. “This feedback has helped us craft solutions that aim to support a competitive and thriving marketplace that works for publishers and advertisers, and encourage the adoption of privacy-enhancing technologies.”

Timeline for third-party cookies deprecation

Ultimately, Google decided that its favored path will mean implementing these new settings within Chrome and without pushing ahead with cookies deprecation. That process began after a formal announcement in 2020, eyeing 2022 for full deprecation. In April, the deadline was moved into 2025 as Google acknowledged the CMA’s need to review proposals, as well as “ongoing challenges related to reconciling divergent feedback from the industry, regulators and developers.”

“As this moves forward, it remains important for developers to have privacy-preserving alternatives,” Chavez stated this week. “We’ll continue to make the Privacy Sandbox APIs available and invest in them to further improve privacy and utility. We also intend to offer additional privacy controls, so we plan to introduce IP Protection into Chrome’s Incognito mode.”

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Matt Levitt

In the realm of marketing, B2B and B2C strategies often appear worlds apart; after all, you don’t market a software product the same way you market jewelry.

As someone focused on B2B marketing, with experience working with consumer brands, I’ve discovered that B2B marketers stand to gain more insights from their consumer counterparts than they might initially realize. Ultimately, whether it’s enterprise software or everyday products, those making the purchasing decision are still consumers. Companies are increasingly demonstrating that you don’t need to delve into technical intricacies to effectively engage with business audiences.

Here are four helpful principles B2B marketers can learn from B2C:

1 – Market to People, Not Just Businesses

There is a lot to learn from consumer brands that excel at communicating effectively with their audience. Often, marketing assets are not about the product itself but rather the emotion or benefits it can provide.

B2B marketers can take note — not everything has to be down to business. Take HubSpot, for instance. Initially targeting smaller businesses uninterested in or unable to handle the complexities of more advanced alternatives, HubSpot didn’t push the merits of marketing automation and CRM. Instead, they consistently provided valuable content addressing various business and marketing subjects, addressing the real needs of their audience.

This technique mirrors the strategy of makeup brands offering tutorials on platforms like YouTube, Instagram, or TikTok. Viewers seek education, and through this process, they discover and trust brands that offer solutions to their problems.

2 – Lose the Lingo

Business services and technology offerings can be a challenge to communicate, especially concisely. It requires skillful wording and sometimes an outsider’s perspective to strip away industry jargon and deliver a clear message. Even among knowledgeable audiences, content overloaded with unexplained acronyms or industry terms risk alienating rather than engaging.

3 – Expand Beyond Traditional B2B Channels

LinkedIn and Google aren’t the only way to reach your audience. If you ensure the right targeting, any channel can be a B2B channel including Instagram, TikTok and press. Since not every B2B company is leveraging these channels, it also offers an opportunity to stand out from the crowd.

If your website already has strong traffic, you can even use these advertising channels only to retarget people that have already been to your site and found you through more traditional B2B channels. A good example of a B2B company using traditionally consumer marketing channels is collaborative work management software firm Monday.com.

On Meta, Monday.com uses a strong mix of content that looks native to Facebook and Instagram, like UGC-style video, in conjunction with more typical B2B ads showcasing the product’s UI and various infographics. Monday.com understands that their audience spends time on Meta and is adjusting their strategy to meet them where they already are.

4 – Don’t Put Your Website on the Backburner

Your website’s impact is substantial; neglecting issues such as slow site speed can hinder users from discovering your offerings effectively. Invest in a website that will impress, regardless of whether your traffic rivals that of direct-to-consumer brands.

By embracing these principles gleaned from consumer marketing, B2B marketers can elevate their strategies and forge deeper connections with their audience. This will ultimately drive success in an increasingly competitive landscape.

About the author:

Matt Levitt is director of strategy at 829 Studios, a B2B and B2C marketing agency.

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In addition to its namesake brand Neiman Marcus, the group also includes Bergdorf Goodman. Once the deal is complete, HBC said, it will create a new entity called Saks Global.

The boards of directors at both HBC and Neiman Marcus Group have approved the transaction, but it is subject to regulatory approval “and other customary closing conditions.” Until then, both companies will continue to operate separately.

Saks Global will be “a combination of world-class luxury retail and real estate assets,” according to the acquisition announcement. Those include:

• Saks Fifth Avenue
• Saks Off 5th
• Neiman Marcus
• Bergdorf Goodman

Each one will continue operations under their respective brands, HBC said.

Hudson’s Bay Co. (HBC) is No. 26 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s largest online retailers.

Who is funding the Neiman Marcus acquisition?

Amazon will be one of the investors in the deal, as well as Salesforce and Rhone Capital. Insight Partners, a global software investor, will be a shareholder in the new company. Rhone Capital is a private equity firm and will continue as the active lead investor in Saks Global, HBC said.

HBC said it has secured:

• A $1.15 billion fully committed term loan financing from investment funds and accounts managed by affiliates of Apollo.
• A $2 billion fully committed revolving asset-based loan facility from Bank of America (lead underwriter), Citigroup, Morgan Stanley, RBC Capital Markets and Wells Fargo.

Amazon ranks No. 1 in the Top 1000. It’s also No. 3 in Digital Commerce 360’s Global Online Marketplaces Database, which ranks the 100 largest such marketplaces by third-party gross merchandise value.

In North America, 76 of the top 2000 online retailers use Salesforce as their ecommerce platform, according to Digital Commerce 360 data. In 2023, those 76 online retailers combined for more than $136.077 billion in web sales.

Inside HBC’s deal to acquire Neiman Marcus Group

The deal to acquire Neiman Marcus Group will cost $2.65 billion. Upon closing of the transaction, HBC said, Saks Global will include the Saks Fifth Avenue, Saks Off 5th, Neiman Marcus and Bergdorf Goodman brands. They each will continue operating under their respective brand names, HBC added.

Additionally, Saks Global will also include HBC’s U.S. real estate assets and Neiman Marcus Group’s real estate assets. Together, these will create a $7 billion portfolio.

Meanwhile, HBC’s Canadian business will become a standalone entity upon completing the deal. It will be separate from Saks Global “with significantly reduced leverage and enhanced liquidity.” HBC said it will continue to wholly own its Canadian retail and real estate assets, including Hudson’s Bay, which operates TheBay.com and the retailer’s network of physical stores.

“For years, many in the industry have anticipated this transaction and the benefits it would drive for customers, partners and employees,” said Richard Baker, HBC executive chairman and CEO. “This is an exciting time in luxury retail, with technological advancements creating new opportunities to redefine the customer experience, and we look forward to unlocking significant value for our customers, brand partners and employees.”

Among the technological advancements is Saks’ newly launched advertising business, Saks Media Network. It announced in April that the Saks retail media network will expand offerings for the retailer’s brand partners “by helping their products reach the right luxury customers when and where they are actively looking to purchase.”

Restructuring leadership at Saks and Neiman Marcus

Marc Metrick, the current Saks.com CEO, will become CEO of Saks Global, HBC announced. His role will be to lead the retail and consumer businesses while “driving the strategy to advance the luxury shopping experience.”

Ian Putnam, currently President and CEO of HBC Properties and Investments, will become CEO of Saks Global Properties and Investments. The properties and investments group “will manage, maximize and enhance” the company’s portfolio of real estate assets, HBC said.

Both Metrick and Putnam will report to HBC CEO Richard Baker.

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Among those starting new roles at Target will be Christina Hennington, becoming chief strategy and growth officer; Rick Gomez, who will be chief commercial officer; and Lisa Roath, who will take over as chief merchandising officer of food, essentials and beauty. The moves will not all happen at the same time.

Target’s new leadership team changes

Lisa Roath, chief marketing officer at Target | Image credit: Target

“As we execute our 2024 plans and look to the future, we’re putting key leaders and capabilities in place to sustain profitable growth over the long term,” said Brian Cornell, chair and CEO at Target. “Today’s announcement builds on our January appointment of Michael Fiddelke to chief operating officer and will further accelerate progress on our growth initiatives.”

Cornell elaborated on the new assignments for all three members of its leadership team. At the same time Fiddelke was named chief operating officer in January, Target also moved Gomez from chief food and beverage officer to the role of chief food, essentials and beauty officer under Hennington.

“As Rick takes on full oversight of merchandising, Christina will be dedicated to keeping our strategy consumer-centric, differentiated and future-focused,” Cornell explained. “Lisa will be an important addition to Rick’s leadership team when she moves into her new role in 2025, bringing her prior experience and accomplishments leading our food and essentials businesses.”

Roath, who has been with Target since 2006, will vacate her position as Target’s chief marketing officer when she makes that transition.

“In the meantime, we’ll conduct a thorough search for a top brand marketer to succeed Lisa and build on our strong marketing foundation,” Cornell stated.

While Target’s search for a new chief marketing officer is underway, Roath will continue in her current capacity, reporting to Cara Sylvester, chief guest experience officer at Target. Target credited Roath with leading its “Target Lady” and “That Target Feeling” campaigns. The company also noted her work on the design and execution involved with its revamped merchandising organization and creation of Target’s price and promotions center of excellence.

Target’s ecommerce sales by year

Target is No. 5 in the Top 1000. The database is Digital Commerce 360’s ranking of North America’s online retailers by web sales, where it is categorized as a Mass Merchant. Digital Commerce 360 projects that Target’s total online sales for 2024 will be $19.46 billion.

Gomez’s new role as chief commercial officer

Rick Gomez, incoming chief commercial officer at Target | Image credit: Target

Gomez, who arrived at Target in 2013 and eventually became a member of its leadership team in 2017, will report directly to Cornell when he takes on his new responsibilities July 7. His portfolio will include merchandising at Target, encompassing the apparel and accessories, home, hardlines, food, essentials and beauty product categories, as well as owned brand sourcing and design and merchandising planning and capabilities, according to details released by the retailer.

Target lists Gomez’s contributions during his time there to date as aiding its 2017 strategy reset, in addition to the 2019 launch of Roundel, Target’s retail media network. Most recently, as chief food, essentials and beauty officer, his team worked with Good & Gather and Favorite Day, among other owned brands at Target.

As he moves under Cornell, Hennington’s appointment to chief strategy and growth officer will also become effective on July 7.

Target’s growth plan

Hennington’s new position puts her in a key place as Target looks look improve upon its performance so far in 2024. Target lists operational modernization, including the use of generative artificial intelligence (AI), among her upcoming priorities. She will also report to Cornell.

In addition, Hennington will be tasked with developing strategic partnerships and building new ones.

Christina Hennington, incoming chief strategy and growth officer at Target | Image credit: Target

She has been with Target since 2003 and its leadership team since 2020. During her two decades there, she has worked on multicategory merchandising, where her work led to $30 billion in growth, according to Target. Other milestones for her have involved Target’s sale of its pharmacy business to CVS and partnering with Ulta Beauty.

Ulta is No. 39 in the Top 1000. It is also the fourth-largest online seller in the Health & Beauty category in the U.S., according to Digital Commerce 360, behind Walgreens Boots Alliance Inc., iHerb Inc. and Amway.

Target’s first-quarter results in 2024 showed total sales at a two-year low for the period, revealing difficulties despite a year-over-year increase in digital sales for the first time in more than a year. The company recently announced price reductions at its stores and is currently preparing for its July Target Circle Week sales event, which is scheduled to overlap with Walmart’s own Walmart Deals event and conclude ahead of Amazon’s Prime Day dates for 2024.

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CEO Rodney McMullen said in an earnings call with investors that Kroger expects customer sentiment “to continue improving” as inflation moderates. But for now, many are “managing economic uncertainty.”

“As we’ve seen over recent quarters, customers continue to seek value and are shopping with us differently based on their financial situations,” McMullen said. “Spending from premium and mainstream customers continue to be strong.”

He added that Kroger is starting to see positive signs among its “most budget-conscious households.”

Kroger has moved up to No. 6 in the Top 1000, Digital Commerce 360’s database ranking the largest online retailers in North America. Kroger is first in the Top 1000’s Food/Beverage category. However, it competes with Mass Merchants that rank higher than it in the Top 1000 — Walmart and Target — for online grocery sales.

Kroger digital sales

In Q1, Kroger said, it accelerated its digital presence by increasing delivery sales 17% year over year. It also increased digitally engaged households 9% year over year.

Kroger digital sales increased more than 8% in Q1, said Todd Foley, interim chief financial officer, in the earnings call. For total Kroger sales, which increased to $45.3 billion in Q1, gross margin was 22.4% of sales. Whereas total sales increased slightly from $45.2 billion in the previous year’s Q1, gross margin decreased slightly (down seven basis points), he said.

McMullen said delivery and pickup both grew in the quarter. Kroger’s delivery team has improved fill rates, he said. That refers to the number of orders Kroger can ship from its available stock. It also reduced wait times and improved on how many of its orders were delivered without error, he added.

“Through the power of machine learning and AI, we are developing new ways to elevate the pickup experience for customers and at the same time reduce costs,” McMullen said. “With dynamic batching of orders, these tools are providing associates the most effective pick routes, which is enabling us to dramatically reduce pick lead time in our highest volume stores.”

Additionally, he said customers love Kroger’s delivery experience for refrigerated products. The Kroger delivery network has nearly doubled sales year over year in Q1, he said.

Personalization and retail media at Kroger

Personalization has helped Kroger engage with more digital customers, McMullen said. As a result, Kroger customers clipped 18% more digital coupons than they did in the year-ago quarter.

“Capturing more digital households is a key to our long-term growth model as these households are more loyal, spend nearly three times as much with us and drive our alternative profit businesses,” McMullen said.

Meanwhile, McMullen said Kroger Precision Marketing, the company’s retail media network, is on pace to meet full-year expectations of more than 20% growth. Kroger Precision Marketing added new capabilities with Meta on June 19, he said. It continues to “broaden its reach by offering its custom audiences and ad measurement capabilities to advertisers on the Meta social media platforms.”

McMullen said this will create more opportunities for clients to reach relevant audiences in more places.

Possible Kroger merger with Albertsons

McMullen told investors that Kroger believes its updated divestiture plan meets regulators’ concerns and will put the company in a better position to complete its merger with Albertsons.

Kroger and Albertsons announced in April a plan to sell grocery stores to C&S Wholesale Grocers. This came in response to a statement the Federal Trade Commission had released in late February calling the proposed Kroger-Albertsons merger “anticompetitive” and suing to block the $24.6 billion acquisition.

McMullen said the proposed divestiture “positions C&S to be a strong and successful competitor.”

Albertsons ranks No. 24 in the Top 1000. C&S currently does not rank in the Top 1000.

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In her role, Wilson will oversee Lowe’s retail media network, which is branded as the One Roof Media Network.

Lowe’s ranks No. 11 in the Top 1000, Digital Commerce 360’s database of North America’s online retailers by web sales. The retailer is in the Hardware & Home Improvement category.

Jennifer Wilson’s duties as Lowe’s chief marketing officer

Jennifer Wilson, senior vice president, chief marketing officer at Lowe’s | Image credit: Lowe’s

“Jen’s extensive marketing, merchandising and home improvement experience positions her well for this expanded role,” said Marvin Ellison, chairman and CEO at Lowe’s, in a statement released June 11. “She’s consistently moving Lowe’s forward, as recently demonstrated by the successful launch of our MyLowe’s Rewards loyalty program and Lowe’s retail media network.”

Wilson’s promotion was made effective as of June 10. She will report to Bill Boltz, executive vice president of merchandising at Lowe’s, according to details the retailer released.

She will take the lead at Lowe’s One Roof Media Network in a year when other competitors, including Home Depot and Walmart, are also building out their retail media capabilities. In March, Google announced Lowe’s as the first beta partner for its own off-site retail media solution. That beta program will leverage Google’s Search Ads 360 product for offsite retail media campaigns, thus extending the reach of networks — like the one Lowe’s operates — to additional third-party channels.

In addition, Wilson will work on strategic brand and product marketing, as well as growing a customer experience integration organization within Lowe’s.

“Jen brings a data-driven approach and is helping us develop a deeper understanding of the customer,” Ellison said.

Wilson’s background in marketing and at Lowe’s

Wilson’s most recent title at Lowe’s was senior vice president, enterprise brand and marketing. Before that, she served in vice president positions, with portfolios including integrated marketing, merchandising and paint. Prior to Lowe’s, she also worked in marketing and advertising for agencies including Luquire George Andrews, St. John & Partners and Akhia.

“I am humbled and excited for the opportunity to continue elevating this great brand by leading a talented team of people who are customer and data obsessed,” Wilson said. “Working together with the exceptional talent across the business, our goal is to continue to unlock value for our customers while delivering business results for Lowe’s.”

Currently, she also holds a board of directors seat on the Ad Council.

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Cookies have long been an essential piece of online advertising, mainly because they track a consumer’s activity across the internet so advertisers can serve them relevant ads. They power what the research firm eMarketer estimated would be a $600 billion annual online advertising industry in 2023.

Now, Google is phasing them out after years of concerns over privacy. Meanwhile, cookies’ retirement has been repeatedly pushed back. Most recently, Google delayed its plans to enact the phaseout by the end of 2024 into early 2025 after restricting cookies for 1% of all Google Chrome users in January.

“We recognize that there are ongoing challenges related to reconciling divergent feedback from the industry, regulators and developers, and will continue to engage closely with the entire ecosystem,” the tech giant said in an April blog post. 

That gives retailers some more time to fine-tune their plans.

How do retailers use third-party cookies?

Cookies are a tool retailers use to reach consumers and show them relevant advertisements. They’re used to keep consumers logged in to a retailer’s website, identify them and serve them ads. 

For example, cookies allow a retailer’s website to maintain a consumer’s shopping cart if she closes and later reopens the website. Moreover, they allow advertisers to show ads related to products a consumer was already looking at. 

Google’s cookie deprecation refers to third-party cookies, the kind that are used to serve these curated ads.

Despite the long lead time for the phaseout, advertisers still lean on cookies. A 2023 Adobe survey of 2,667 marketing and customer experience leaders found that 75% rely heavily on cookies. 45% spend at least half their advertising budgets on cookie-based targeting.

Nevertheless, 51% of those surveyed also qualified cookies as a “necessary evil,” suggesting that they’re on the hunt for a better solution. Even so, 49% said they don’t have access to enough resources to rethink advertising strategy in a post-cookie world.

Retail media networks present an alternative strategy 

Retail media networks are shaping up to be part of the solution for some of the largest retailers. They are a type of advertising platform where retailers can sell ad space on their own digital channels to third parties. Advertisers can target their ads using the retailer’s first-party data on customers, including information from loyalty programs. Ads can be placed on retailers’ websites, within mobile apps or in stores via screens and displays.

They’re advantageous both as a way of targeting ads and as an additional revenue stream for retailers. 

Many retail media networks are explicitly courting retail advertisers with the threat of a cookieless future. 

“For Walmart Connect, Walmart DSP will provide a solution to huge challenges that brands and agencies teams will face with the cookie deprecation process,” Jonathan Fasano, head of product at Walmart Connect Mexico said in April.

Walmart Connect is Walmart’s retail media network.

“Brands will begin to seek media with vast amounts of consumer purchase data, and we already have it through Walmart Audiences, which will also enable us to understand new audiences and potential new buyers for different categories,” he continued.

Target’s Roundel retail media network has similar information on its website.

“When the cookie apocalypse hits, it will wipe out the current way the industry has built audiences and the performance measurement capabilities used to measure the effectiveness of those audiences,” the website says. “If you don’t have real database and identity resolution tools at the ready to build targeted audiences and measure closed-loop media performance, you will suddenly find yourself relying on pre-digital proxies and methods of measurement.”

It presents the solution of advertising to Target customers through Roundel.

Albertson’s, Macy’s, Best Buy, Home Depot and many others also have retail media networks.

Other strategies as third-party cookies are phased out

Advertisers have proposed other solutions for ad targeting after cookies are finally phased out.

For example, the advertising company Criteo suggests tracking consumers with alternative IDs as a replacement for third-party cookies. These are “browser-based technology which seeks to emulate the functionality of the third-party cookie in a privacy-safe way,” Criteo says.

Alternative IDs work in two ways. The first, deterministic IDs, are based on consumers’ personal information after obtaining their consent and using first-party data. Conversely, probabilistic IDs attempt to identify consumers without any first-party data using signals like IP address, device type and operating system.

Generative artificial intelligence (AI) may also play a role. Using zero- and first-party data to personalize experiences for consumers can be challenging and costly to scale up. Supplement retailer GNC is using generative AI to turn that data into “hyper-personalized” recommendations, former chief information officer Scott Saeger told Retail Touchpoints.

Data clean rooms are another approach touted by Amazon and Walmart. They allow two actors — for example Walmart and an advertiser — to share their first-party data for more insights and precise ad targeting. The benefit of data clean rooms is that they can maintain privacy on the original data set.

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The companies detailed their new deal in a May 21 announcement.

Ibotta also works with retail brands Family Dollar and Dollar General on digital offers and rewards. It touts its ability to deliver coordinated promotions across retailer platforms, large third-party publisher sites and Ibotta’s direct-to-consumer properties.

Family Dollar is owned by Dollar Tree, which is No. 176 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Dollar General is No. 697. Digital Commerce 360 categorizes both retailers in the Mass Merchant category.

Schnucks omnichannel offers and rewards through Ibotta

“Schnucks is thrilled to partner with Ibotta, a leader in digital rewards, to expand savings for our customers through our Schnucks Rewards program,” said Tom Henry, chief data officer at Schnucks, in a released statement. “Through this partnership, Schnucks customers will have access to a wider range of digital coupons in our Schnucks Rewards program, creating more value for customers with every in-store or online shop.”

Moreover, Schnucks and Ibotta plan to work together on strategic research and development, pursuing new shopping experiences for Schnucks customers.

“Together with Ibotta, Schnucks is committed to creating innovative retail solutions that will shape the future of grocery shopping,” Henry stated.

What Ibotta’s network provides

“Driven by Ibotta’s mission to make every purchase rewarding, we’re pleased to add Schnucks, one of the country’s most storied regional grocery brands, to the Ibotta Performance Network, to drive more value for their customers through personalized offers and rewards,” said Ibotta CEO and founder Bryan Leach. “Schnucks’ and Ibotta’s mutual track record of industry-leading innovation is a befitting foundation for our partnership to reimagine the grocery shopping experience of the future.”

Leach offered some details on the focus of the research and development goals underpinning the two companies’ future work.

“Together, we’ll collaborate to develop a more personalized, premium shopping experience for Schnucks customers,” he explained.

Looking ahead, they intend to explore new types of digital offers in retail media. In addition, they will look to create “innovative touchpoints in-store,” according to the announcement.

New promotions for Schnucks customers will begin to roll out before the end of 2024, according to Ibotta. The company claims its network already reaches more than 200 million consumers and has been responsible for $1.8 billion in earned rewards since 2012.

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The retailer’s ecommerce penetration grew across all markets, CEO Doug McMillon said. That was partially due to growth among high-income customers, who turned to Walmart for convenience in the quarter.

Consolidated revenue grew 6.0% to $161.5 billion in Q1. Meanwhile, consolidated net income rose 179.9% to $5.31 billion.

Walmart is No. 2 in the Top 1000, Digital Commerce 360’s ranking of North America’s online retailers by web sales. It is also No. 9 in the Global Online Marketplaces Database, Digital Commerce 360’s ranking of top such marketplaces by third-party gross merchandise value (GMV).

How much did Walmart make in Q1 online sales?

Ecommerce remained a source of high growth for Walmart in Q1 2025. The 22% year-over-year growth in the U.S. came on top of a 27% increase in Q1 of fiscal 2024.

Walmart said its pickup and delivery service was once again a significant driver of that ecommerce growth.

“It’s great to be in a position where our pickup business is growing and then, as we mentioned, our delivery business has now exceeded our pickup business in size and the run rate remains strong,” Walmart U.S. CEO John Furner told investors on May 16.

The mass merchant’s growing online business also represents an opportunity with more room to expand.

“While Walmart’s online business is still dominated by grocery — which is a key strength compared to Amazon — it is now gaining ground in categories like home and sporting goods, which underlines the fact it is becoming more of a destination for non-grocery shopping,” said Neil Saunders, managing director of retail analysis firm GlobalData. “In our view, Walmart has significant runway to expand this part of its business, especially as memberships of its Walmart+ program continue to increase.”

Meanwhile, Walmart’s ecommerce losses are decreasing.

“Ecommerce losses continue to narrow, most notably in the U.S. net delivery cost per order, improving nearly 40%,” chief financial officer John David Rainey said.

Sam’s Club and other Walmart online sales results

Sam’s Club, Walmart’s membership-based warehouse chain, reported ecommerce sales grew 18% in the quarter. Like Walmart, that growth was attributed to pickup and delivery sales. 

Sam Club’s net sales, meanwhile, grew 4.6% due to increases in transactions and unit volumes. Membership income grew 13%, thanks to “record total membership and Plus penetration at quarter end,” the retailer said.

“Walmart Plus continued to grow double-digits as members engage with us more frequently and spend more than other customers,” Rainey added.

54% of Sam’s Club members are also Walmart Plus members, the retailer said. One-third of Sam’s Club members are also using Walmart’s Scan and Go technology.

Walmart’s third-party online marketplace also grew significantly in the quarter, it said. Sales in the furniture, sporting goods, children’s apparel and home goods categories each grew more than 20%. Furner noted that all apparel categories are strong on the marketplace.

In the U.S., Walmart’s marketplace grew its seller count by 36% during the quarter. 28% of sellers also use Walmart’s fulfillment service, it said.

“We’ve picked up momentum in the marketplace,” Furner said. “Really, really pleased to see a number — a really large number — of new sellers come on board, and assortment’s well north of $400 million.”

Walmart Connect keeps growing

The company’s advertising arm grew 24% year over year, led by 26% growth from U.S. advertising side, Walmart Connect. U.S. ad sales from marketplace sellers grew more than 50%, it said. Overall advertiser count also grew nearly 19%. Sam’s Club’s ad business also grew, with a 30% increase in active advertisers.

In April, Walmart shared plans for growing Walmart Connect following its proposal to acquire Vizio. Walmart detailed plans to create more advertising options, expand them beyond Walmart.com, give advertisers better targeting and measuring abilities, and give them more creative tools.

Walmart appeals to higher-income consumers

The retailer attributed much of its growth in Q1 to higher-income consumers in the U.S.

Walmart breaks its customers into three tiers based on income, Rainey said:

• Below $50,000
• $50,000 to $100,000
• Above $100,000

Typically, about one-third of customers fall into each category. However, an emphasis on convenience rather than strictly value has brought in more customers from that high-earning tier, he explained. In addition, Rainey attributed growth in delivery among that cohort to their preference for convenience.

“Convenience matters to someone irrespective of what your payback is, irrespective of what your income level is,” Rainey said. “And we expect that to be durable. We don’t expect that to change.”

Walmart also invested in improving food quality to appeal to that customer segment, Furner said. He pointed to higher quality in the fruit and meat departments. 

Walmart layoffs

Ahead of reporting financial results, Walmart announced it would cut hundreds of corporate jobs and ask remote workers to move to one of three offices. Workers at Dallas, Atlanta, and Toronto locations were also asked to relocate. Most workers will move to Walmart’s Bentonville, Arkansas headquarters, while some will go to the San Francisco Bay Area or Hoboken, New Jersey.

“Earlier this week, we also shared decisions to eliminate some home office roles and reduce the amount of remote work,” McMillon told investors. “The vast majority of our home office associates have been back together in offices since we came back from the pandemic, and we want to see even more of that. Being in person is important.”

Walmart earnings

For its fiscal first quarter ended Apr. 30, Walmart reported:

• Consolidated revenue grew 6.0% to $161.5 billion.
• Walmart online sales in the U.S. grew 22% in Q1 FY25.
• Consolidated net income grew 179.9% to 5.31 billion.

Check back for more earnings reports. See Walmart’s previous earnings release story here.

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