Walmart is looking for ways to improve profitability! The plan to increase profit margins is...

Walmart has more customer traffic and a greater portfolio of business-building tools than any other retailer in the U.S., according to a report from RetailWire. The retailer plans to use these tools and traffic to diversify its revenue streams and increase profitability in the future.

Walmart Chief Financial Officer John David Rainey said this week at the Raymond James Institutional Investor Conference that the company expects a larger portion of its sales and profits to shift toward advertising sales, third-party marketplace sellers and B2B services.

Walmart's advertising success is driven by traffic to its stores, apps and walmart.com.

Mr. Rainey said that “more advertisers want to spend money with Walmart” because it attracts more shoppers. Advertising profit margins, which typically range from 70% to 80%, can change the makeup of a company’s profit and loss statement. Insider Intelligence expects Walmart’s advertising revenue to grow 42% by 2023.

Rainey pointed to the fees Walmart charges third-party sellers on its e-commerce platform as another way to increase revenue and profits. Walmart has increased the fees it collects from third-party sellers by allowing them to use its fulfillment technology and services.

Rainey also sees opportunities to work with business clients who want to take advantage of Walmart's scale. He points to the chain's extensive network of stores across the U.S., which puts the retailer within 10 miles of most American homes. This market saturation and the systems Walmart has developed to run its own business make it a solutions provider for other companies.

Walmart isn’t the only company trying to monetize advertising and services to improve its overall and financial performance. Amazon gets more than half of its e-commerce revenue from third-party marketplace sellers. Amazon is also the largest retail media provider, trailing only Google and Facebook in digital ad sales, according to Insider Intelligence research cited by CNBC.

Editor ✎Estella/A MZ123

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