Retailers Find Bigger Growth Selling Ads Around the Shopping Cart

Retail media is growing faster than merchandise sales at Walmart, Target and Amazon, with each reporting double-digit advertising revenue gains in their latest quarters.

Walmart Connect revenue increased 43% year over year. Target's advertising revenue, primarily from Roundel, rose 29% to $279 million. Amazon advertising services revenue grew 26% to $19.8 billion.

Those growth rates outpace core retail sales. Walmart U.S. net sales rose 3.5%. Target merchandise sales increased 5%. Amazon's online store sales grew roughly 15%.

The difference reflects a structural shift inside retail economics. Merchandise requires inventory, fulfillment and price competition. Advertising lets retailers generate extra revenue from the same traffic and transaction data their stores and websites produce.

Walmart's disclosures show the scale. Global advertising generated nearly $6.4 billion in fiscal 2026, up 46%, including Vizio. A year earlier the business produced roughly $4.4 billion. The growth continued into the current fiscal year, with Walmart Connect up 44% in the first quarter and 43% in the second.

Chief Financial Officer John David Rainey said strong advertising and membership revenue contributed to double-digit incremental margins in Walmart U.S. eCommerce during the first half of the fiscal year.

Target's figures also show a rising contribution. Second-quarter advertising revenue of $279 million compared with $217 million a year earlier. Over the longer term, Target reported $915 million in advertising revenue in 2025, up from $649 million in 2024 and $522 million in 2023.

The $279 million does not capture all of Roundel's economics. Target said some Roundel arrangements are recorded as reductions to cost of sales or SG&A, depending on the arrangement. Management separately reported that Roundel gross billings increased nearly 20% in the quarter.

Target is also building the network alongside physical and digital infrastructure. The company opened 17 stores during the second quarter and had more than 100 full-store remodels underway. More than 95% of its sales are fulfilled through stores. CEO Michael Fiddelke said technology investments include personalization across stores and digital channels, as well as efforts to strengthen the retail media business.

For Amazon, advertising services revenue reached $19.8 billion in the second quarter, up from $15.7 billion a year earlier. Amazon defined the category as advertising sold to sellers, vendors, publishers and others through sponsored ads, display and video.

Amazon's underlying commerce businesses feed that operation. Online store sales were $70.4 billion in the quarter, and third-party seller services generated $46.8 billion. Both grew more slowly than advertising services.

The results show retail media growing faster than the merchandise businesses around it. The next stage of growth will depend on how much more advertising retailers can build around commerce without relying on equivalent growth in merchandise sales. Walmart's marketplace and eCommerce expansion, Target's rising Roundel revenue and Amazon's push from sponsored listings into video all show the networks moving across more of the shopping journey. Transaction data gives brands a way to measure whether those ads ultimately produce a sale.

Walmart's global advertising revenue reached nearly $6.4 billion in fiscal 2026, up 46%.