Amazon and Instacart’s former advertising leader is transforming the way Walmart grows

Now, as Walmart’s chief growth officer, Dallaire is translating his experience in growing advertising businesses at prominent tech companies to a retailer especially known for its massive store footprint. He was promoted from chief revenue officer to chief growth officer last year, adding additional departments, such as marketing, product and design, to his existing revenue-growth areas: the Walmart Connect advertising business, Walmart+ membership program and Walmart Data Ventures, its data analytics arm.

“What really appealed to me about Walmart was the physical retail component of the business, and that was something that I just hadn’t had experience with — how a retailer could be a real omnichannel retailer,” Dallaire told Modern Retail. “Being able to contribute to the business, or help build some teams that could help Walmart achieve as an omnichannel retailer with its customers, was something that was really compelling.”

At Amazon, Dallaire focused on growing a once microscopic advertising business that went on to be a competitor to Google and Facebook. Instacart’s advertising business, formerly led by Dallaire, also soared, going on to reach almost $1 billion in advertising revenue last year. Now, his areas at Walmart are already seeing rapid growth, with advertising revenues — up 27% last year — contributing to 8.6% in overall operating income growth.

“I had usually called him the godfather of retail media, because he does have that lineage right back to the beginning of the entire wave,” said retail media industry analyst Andrew Lipsman of Media, Ads + Commerce. “He’s got a deep advertising background, but was really one of the key players in building the Amazon business to what it is.” When Dallaire joined Amazon in 2012, the company was just starting to build out its advertising network; by the time he left in 2019, Amazon had hit roughly $10 billion in annual ad revenue. During his time there, the company built out its advertising division with robust features for advertisers like new APIs and self-service features for marketers, as well as an advertising office in New York City.

Lipsman said Dallaire was successful in taking a version of the Amazon playbook — building a retail media network and other businesses around the core of a marketplace — and quickly applying that at Instacart and now Walmart.

“It helped Walmart, which had been kind of a laggard up until that point, to become one of the strongest players,” Lipsman said. Walmart, he said, realized that if you grow retail media at a big enough scale, “it transforms the bottom line of a traditional brick-and-mortar retailer.”

Dallaire explained in an interview how he is working to bridge the physical store experience with e-commerce, how the company has matured more as an advertising player over the past few years and how he has built out an ecosystem of new services within a retailer with a long history.

From Amazon and Instacart to Walmart

Coming from companies centered around technology to a historically physical retail business, Dallaire said he’s been careful to explain digital opportunities through brick-and-mortar analogies. When he joined Walmart, he said, “I had to learn the language of the store operator and learn the language of the merchant, in order to relate to them how important and exciting the opportunities in the digital space were for our customers.”

For instance, he describes digital advertising as similar to in-store merchandising, in the sense that it can expose customers to different products they weren’t necessarily looking for while shopping, just as they would find new products while browsing a physical store.

“The advertising piece of Walmart’s business helps enable that type of discovery and serendipity of discovering new brands and products in the app,” Dallaire said. “Advertising allows us the opportunity, as the retailer, to show you, as the customer, products that maybe are complementary to the ones you just added to your basket.”

Later in the interview, he did this again when explaining why Walmart bought TV maker Vizio last year — comparing the streaming experience to the physical shopping experience of 20 years ago, when customers would go to Walmart and look for a VHS and DVD if they wanted to watch a movie. While shopping for that, they may have also picked up groceries or home decor. The Vizio acquisition, Dallaire said, allows the company to similarly reach customers while they’re searching and watching shows and movies at home.

“They’re watching probably more movies and more television shows than they ever have before. They just happen to do that now through a smart TV; they buy these products or they rent these products, ” Dallaire said. “Principally, that’s a store.”

This style of communication is something that has stood out about Dallaire to Deepak Maini, svp and gm of Walmart+, who had previously worked with Dallaire at Amazon.

“He’s deeply attuned to the team dynamics and excels at uniting people toward a common purpose of, ‘Why do we do this thing?'” Maini said. “He has been very thoughtful and creative in helping educate and explain that to folks, that — at the end of it — we are here to help the customer find the best products.”

Walmart’s evolution as an advertising business

Since Dallaire came to Walmart, its advertising business has skyrocketed in scale, not unlike what he oversaw at Amazon and Instacart. Late last year, Walmart CFO John David Rainey told investors that advertising had grown to make up almost a third of Walmart’s overall operating income. In the last reported quarter, Q1, Walmart’s U.S. ad revenue grew 31% year over year, not counting Vizio, with e-commerce sales up 21%.

“I see the advertising pieces being really critical to the customer experience that we enable in the app and in our digital store, and then, from a business standpoint, it has a different margin profile than traditional retail,” Dallaire said. “It works on both fronts, both for helping customers discover new products, and also helping us to change the shape of our P&L.”

Both Dallaire and industry experts agree that Walmart has become a more prominent voice within the advertising community and among agencies in recent years, and had a significant presence at the Cannes Lions festival this year. “They made significant strides in creating better agency solutions and offers, hiring some really strong talent,” said Mike Feldman, svp of commerce for e-commerce platform Flywheel.

Dallaire said that, as the company has invested in new product capabilities and new measurement capabilities, there has been “a new story for Walmart to tell the advertising community.”

That is, “we can prove that, when brands advertise and speak to our customers about their products while they’re shopping, our customers buy those products, [and] those marketing investments perform.”

Some of those new capabilities include new API connections and self-service features that make it easier for brands and agencies to track performance and results.

“I think they … have a good pulse on the agencies, the brands and suppliers, of what needs to be true to consider Walmart in the upper echelon of media platforms,” Feldman said. “Now, I’d say they’re still getting there with some capabilities — Vizio, while they acquired it, is not fully integrated — but they’re definitely making all the right steps, and I have a lot of confidence they’ll get there.”

Feldman, who previously worked as Georgia-Pacific’s retail marketing director, had worked with Dallaire when he was at Amazon, as the two companies were working together on an early Amazon advertising deal in which Dallaire was closely involved alongside merchants. Similarly to what he is doing now at Walmart, Dallaire was able to sell them and other brands on the concept of an e-commerce retailer being as critical of an advertising partner as a search or social media platform.

“Our bet at Georgia-Pacific at the time was that we would want to work with Amazon advertising, whether we sold product on Amazon or not, because we believed in the data story and the upside and the potential,” Feldman said.

Feldman added that, from his view, Walmart merchants are now more aware of the value advertising can drive for the total organization and are better at promoting Walmart Connect to clients.

“In so many orgs, the merchants are the ones dominating, where I think Walmart is really thinking about it in terms of total business,” Feldman said.

Bridging physical and digital

When asked what his goals are for the near term, Dallaire said he’s looking forward to continuing growing Walmart+ and integrating Vizio into the Walmart business, as both are relatively new to the company — but some in the industry say Walmart’s biggest area for future growth is in-store advertising, going beyond ads on the TV wall in the electronics department or on self-checkout screens.

“In the same way that Amazon created the retail media market online, Walmart can do that for in-store,” Lipsman said. “I don’t know what they’re waiting for.”

Mark Fishkin, VP of retail media platforms for ad management platform In-Store Marketplace, said he believes this is an area in which other grocers may try to take advertising market share if Walmart doesn’t quickly build such a network. Albertsons, Kroger and Hy-Vee are all beginning to bring digital screens into their stores through pilot programs, if not larger rollouts.

Dallaire, however, is taking a more cautious view. He said Walmart has to be careful how many advertisements it puts in front of customers in the stores so as to not interrupt customers’ walk through the store. Still, he said it is exploring ways to bring video screens to locations such as the end of an aisle, which, for instance, may tell customers which items are on rollback without being distracting.

“In those areas where customers are open to us speaking with them, or having brands or marketers talk with them, then we’ll look to define those things and continue to try to find new areas that allow for that, but we want to be very careful that we’re doing it in such a way that it doesn’t distract or make the actual shopping behavior more difficult,” he said.

Still, the intersection between the massive physical footprint and its digital capabilities is what Dallaire believes makes Walmart unique. He said the company has a high standard to make sure all of its experiences complement one another.

“We aren’t a pure-play e-commerce business. We’re not a pure-play physical retailer, either,” Dallaire said. “But at the center of that is the customer, and meeting and exceeding that person’s expectations around how we can serve them.”