Retailers are Looking to Gain Profitability Beyond DTC
The future profitability outlook for large-scale retailers such as Walmart, Target, Lowe’s, Best Buy and Amazon may have nothing to do with traditional brick-and-mortar retail channels. According to reporting from Reuters, Walmart CFO John David Rainey expects retail operations at the big-box behemoth’s nearly 10,000 brick-and-mortar storefronts to account for a less significant portion of the company’s income stream over the next 5 years. Instead, major retailers are expecting that other categories such as platform services and ad sales will surpass DTC retail operations as the main driver of profitability. Figures released from Amazon’s advertising services over the last quarter of 2022 show that the company raked in nearly $11.2 billion from that segment of the business alone. This growing source of revenue for major retailers comes from a paradigm shift fueled by the pandemic where companies are no longer buyers of advertising space but are instead selling ad space both ...