# S3 E21 T76 - Harvey Ma - Sam's Club Connect S3 E21 T76 - Harvey Ma - Sam's Club Connect [00:00:00] Fall Conference Preview [00:00:00] [00:00:00] [00:00:01] [00:00:07] Tom Limongello: Hey, Todd. How's your Friday? [00:00:11] Todd: It's excellent. It's summer, and we're beginning to talk about the fall craziness with regards to the retail media world and I guess, you know, sort of ad tech, martech in general as we start looking at the list of conferences that are coming fast and furiously post-Labor Day [00:00:28] Tom Limongello: We have a lot. We have a lot of in-store focused, uh, conferences coming up [00:00:33] Todd: Right. Like you're, where are you gonna be speaking, running panels or whatever this [00:00:36] Tom Limongello: running panels at in-store Ignite from the path to purchase at Retail Media X, their first, uh, that's a London-based events company that's gonna have their first one in New York City in November. Um, obviously we're going to Grocery Shop. [00:00:48] Tom Limongello: Um, so this is a, an exciting fall that we're gonna have. This recording that we just had was on July 30th, uh, so yesterday, um, with Harvey Ma [00:01:00] of Sam's Club Connect. This is our first time ever talking to Walmart [00:01:04] Todd: It, it was great talking with Harvey, and part of the reason Harvey was on is he's a subscriber to the pod. Um, so if, if people are wondering who's listening to the Middlemen, it's guys like Harvey. [00:01:17] Tom Limongello: Yeah, it w- it was pretty funny when he said, "I thought I knew you already, Todd." [00:01:20] Todd: know, it's great. [00:01:21] Todd: It's like, you know, he, he... It's, it's great to have fans and have, have people listening to the, to the pod and, Harvey was, was fantastic, [00:01:28] Why Retail Media Innovates [00:01:28] Todd: I think actually what's, what's fun is we started-- when we started going down this path, you were geeked out on things like your experience back in the day but now what you're really starting to see, honestly, I think almost all the great innovation in online advertising is coming out of retail media. And there's some cool stuff that Harvey and team at Sam's are doing in terms of how they're creating really innovative formats. Like, he's gonna talk about this new review ad product they have, [00:02:00] which allows people in the demoing of a product then write a review after sampling it or, or vote on review, rate it in real time to help drive, you know, more reviews of a product for the website, which also helps in- often increase, like, user exposure will increase the scores and really encourage that feedback. [00:02:23] Todd: But it's a sponsored ad unit. It's a, it's, it's a native ad unit. It's an in-store unit, and it, it's just... i, I was really geeked out on it. This is the type of stuff that when I hear about new cool things, and you think about all the stitching, right? [00:02:38] Todd: The review platform, the ad serving, the in-store display and all of these things, that's some cool product innovation going on in the space. And as someone with deep ties into native advertising, I'm like, "Holy cow, I can start to see how this is gonna work and how you're, you're not using traditional..." [00:02:54] Todd: Right? We're not slinging another 300 by 250, God bless. Um, and so this is the type of stuff that, [00:03:00] you know, I think we've been waiting for, is like, when are we gonna see innovation in, in online advertising? And when you hear about things like this, this is really cool stuff [00:03:07] Tom Limongello: Yeah, I think the operative word here is experience. And I think it was about a year or maybe six months ago where Harvey actually, um, yeah, I think it was at the-- at CES, he said that, uh, what he is building is a retail experience network, this discussion I think really shows you what an experience network means because initially I heard the word and I was kinda like, "Ah, okay, that sounds cool." [00:03:32] Tom Limongello: But, um, I didn't realize that experiential advertising meant sampling. I didn't realize even that sampling was part of the retail media program. Um, and you know, I thought that was all on the merchant side, but it's [00:03:44] Todd: Right. Which is unique, I think. You know, we, we've talked also a lot about organizational design, merchandising versus retail media, [00:03:50] Tom Limongello: right [00:03:51] Todd: so I think that's a real interesting dynamic as well that we're gonna get into is how organizationally different maybe Walmart and Walmart Connect and Sam's Connect, [00:04:00] et cetera are [00:04:02] Tom Limongello: Yeah. I mean, I think that the experiences that they're creating, there's something called Race to the Club, which you'll see towards the end of the episode, where they're bringing Sam's Club Connect out into the world, out into, you know, IndyCar racing, not only just to sponsor a car, but to enable product demos. [00:04:20] Tom Limongello: Um, it's not just about the functionality or the digital functionality anymore. It's really about when you have an experience platform, it can be anything. But all that information, no matter what it is, if it's in real life or if it's online, is now part of their data backend. [00:04:34] Todd: You know, Walmart is not resting on its laurels. In addition to some acquisitions they've done recently, like Vibe that got announced, um, at Cannes. [00:04:43] Tom Limongello: This is probably the first retailer we've had on who has the ability to invest in every part of the retail media capability, and that's, that was the perspective we wanted to see, and we got to see it, and it was great hearing Harvey say it [00:04:57] Todd: Well, and I think the interesting thing is, 'cause right, the buzz has [00:05:00] been about Vizio and Vibe, right? More of a CTV buzz. But to us, the buzz should be about, to your point, your interest in the experiential and my interest in the in-store and what they're doing. So we were really it- enthusiastic about, you know, listening to Harvey. Great representative, by the way, of Sam's and, and Walmart. Um, and not just 'cause he's a fan of the show, but I think he really does a good job of, of, you know, selling what he's doing. [00:05:25] Todd: And, and I mean that where he's not really selling. We're, we're... You and I are buying what he's selling because it's cool. Well, honestly, very sincerely cool stuff. [00:05:32] Tom Limongello: I gave him hardball questions and he passed with flying colors. So I think we've built this up enough. I think we need to let people listen to Harvey [00:05:40] [00:05:40] Welcome Harvey Ma [00:05:40] Tom Limongello: Welcome. We are here with Harvey Ma. Harvey, hello. You're in Minneapolis today? [00:05:46] Harvey Ma: I'm in home office today. Not in Walmart home office today, I'm in Harvey home office today. So one of the few times I'm actually not in Bentonville or one of our hubs, um, and only because I just got back very late last night from [00:06:00] business travel, but it's a pleasure to spend some time with both you and Todd today [00:06:03] Tom Limongello: It's great to get you on. Um, we know we have a mutual connection in Xavier Facon, one of our first guests on the Middlemen podcast, and right after that it was kinda like, "Let's get Harvey on." It's been almost two years, so super excited. [00:06:15] Walmart Ads Ecosystem [00:06:15] Tom Limongello: Um, and in those two years that you've been, um, at Sam's Club, it was originally called MAP or Member Access Platform, but just this June, I think it changed to Sam's Club Connect, and I think that brings up where we should start this conversation, which is maybe some of our listeners don't even know that Walmart has more than one retail media network, but that they're kind of, you know, uh, not merging, but they are going to cooperate better with each other. [00:06:45] Tom Limongello: I don't really know. You have to tell me. What, what's happening organizationally over at Walmart? [00:06:49] Harvey Ma: Yeah, I'm happy to share. So we made a pretty exciting announcement in Cannes, and that was the rebrand of Sam's Club Map moving towards the brand name Sam's Club Connect. [00:07:00] And I think for a lot of the industry, it was a signal, and a signal that we intentionally used for a moment like Cannes to signal that Walmart Inc. [00:07:09] Harvey Ma: is bringing together what we believe will be the, the world's first global ads ecosystem. So under the umbrellas of Walmart US Connect, which you are all very familiar with, Sam's Club Map, now Sam's Club Connect, and also our Walmart Connect international businesses too, which also operate globally. [00:07:27] Todd: Well, I think an important point there is that I hadn't necessarily realized until, you know, talking with Tom and, and prepping to talk with you, which is, uh, Sam's Map, now known as Sam's Connect, is truly an independent operation and business offering from Walmart. What does that mean by being different and separate, you know, business units? And what does it mean in terms of the customer offering, um, between them in terms of like, I can't just sign up with Walmart Connect and then advertise on Sam's Connect. [00:07:55] Todd: They're separate businesses or, or operations from what I understand. You, you mentioned this ecosystem, and I [00:08:00] think it's an important word you picked for this, is that it's, these are different entities, and they serve different purposes. [00:08:05] Todd: So I think it's good to understand that because that's a truly unique thing within the world of Walmart Inc. and within the world of RMNs. [00:08:11] Harvey Ma: Yeah, that's right, Todd. Very astute. I think what the world is seeing is, you know, I've had the pleasure of now serving and building a few different types of retail and commerce media businesses, and there's one fact that is inarguable, which is a drug RMN functions differently than a travel RMN, which functions differently than a club RMN. [00:08:32] Harvey Ma: And so rightfully so, Walmart Inc., uh, we still operate as three very distinct business units, so there still is Walmart US as the business unit. There's still Sam's Club as a business unit. Um, there's still international. But what's more important for us is that we know that from an ads perspective, the underlying technology, the platforms, the things that are actually served from a tech layer perspective, those things can be synergistic. [00:08:57] Harvey Ma: You can still serve the unique ne-needs of [00:09:00] a business segment. I can still serve a warehouse member. Walmart US can still serve a Walmart customer. A bodega in Mexico, they can still be served in the same way. However, the underlying technological components of that can be synergized and leveraged in a way that helps us move much faster. [00:09:15] Harvey Ma: And also what it does for an advertiser, you've all probably had lots of conversations with advertisers who are like, "I've gotta work with three hundred different commerce media networks across the globe. They [00:09:25] Todd: is one of the emerging problems [00:09:27] Harvey Ma: So then for us, why would we further exacerbate that problem for you when we are all under the umbrella of Walmart Inc.? [00:09:34] Harvey Ma: And so there's a lot of aspiration behind just the name, but one thing I will share is that we will be at full tech parity here, uh, in a very short amount of time. We put that roadmap out there for some of our clients. That will help enable, we hope, speed. It'll help unlock efficiencies of both buying. It will likely, if you want to under- unlock things like you wanna think about a, maybe a global partnership with us now versus a segment by segment partnership, it enables [00:10:00] you to do that. [00:10:00] Harvey Ma: But it goes back to this concept of at Walmart, we very firmly believe that advertisers should have the choice and the control to manage their advertising the way they want to. [00:10:09] Tech Parity And Choice [00:10:09] Todd: that was gonna be one of our follow-up questions, right? Does that mean that technology's now horizontal across those business units and it's, it's getting there, is what you're saying, and the intention is to be that. I think that's an interesting, um, discussion about, oh, we're extending the, the Walmart Connect Foundation across international, across Sam's. [00:10:25] Todd: That's, that's interesting and fascinating because I think one of the questions that has come up from the buy side has definitely been we-- it has to be easier for us. [00:10:33] Todd: What's gonna be some of the differences between them, right? Is, is it different audience? Is, like, different data sets and different targeting? Is it different, like, ad units? Like, we talk about thinking about even to in-store. Obviously, a Walmart retail environment is very different than a Sam's Club retail environment. [00:10:48] Todd: Club versus retail or grocery is very different. How does that look like, and what are some of those differences between them, um, even if they have the same common technological [00:11:00] layer? [00:11:00] Harvey Ma: I think the better way to think about it is our tech teams are working really hard to unlock the bespoke capabilities that exist for each of us to serve our business in a, in a way that best fits either a member, a customer, or a country. [00:11:15] Harvey Ma: So if we go back to, like, I love cars. So if we go back to a car analogy, there are certain people, even if you buy a... Let's, let's pick one. If you buy any model car, let's just say a Corvette, because I just saw one driving down the street. You can get a ZR1, which is, like, the race-ready model for true car enthusiasts. [00:11:30] Harvey Ma: You can also get their mo- more toned-down model as well for maybe, like, the lazy Sunday driver who just drives on the weekends, and there's everything in between. The platform should exist in almost the same way. You can turbocharge this thing with every single bolt-on for a very sophisticated advertiser. [00:11:47] Harvey Ma: You might also have a smaller, less sophisticated advertiser that just wants to run, let's call it, like, managed service search only, and that's okay. The important thing is having that choice and control, but again, our tech teams are working [00:12:00] so hard to make sure that at parity, the international teams, the US teams, and Sam's Club teams, they have the same set of tools, and those tools are vast. [00:12:09] Harvey Ma: And I just wanna also stress, Todd, it's not a one-way street. It's not like we're just taking everything that Walmart US has and just extrapolating that across the countries and the Sam's Club. There's been goodness that's happening in countries and at Sam's Club that happened in the reciprocal. And so this is ways for us to work faster together with leverage and to understand that we've got friends and partners right here in the same company that do some really cool things, and boy, how great would that be to come together? [00:12:35] Harvey Ma: And so our brand new chief growth officer, Seth, was promoted into that new role. And so the new now ads ecosystem will be encompassing of Walmart US Connect, Sam's Club US Connect, and also, uh, Walmart International. [00:12:48] Sam's Connect Value Props [00:12:48] Tom Limongello: you brought up something there that's interesting 'cause when you think of Sam's Club, um, that is the one part of the triumvirate, I guess, uh, in terms of the retail media networks that you own, where, um, you [00:13:00] have members paying to be customers, which means you have longitudinal data over years and years of, of their membership. [00:13:07] Tom Limongello: So similar to, you know, other retailers that have loyalty programs, Sam's has that. Now, I guess what's missing for me is understanding you're not sharing data back and forth between the RMNs, or maybe you are, but even still, you, you have different sets of customers. There's not that much overlap, right, between Sam's Club shoppers and Walmart shoppers. [00:13:27] Tom Limongello: So, is it just sort of a, an experiment where you learn from that and that informs Walmart or, or the international teams? [00:13:35] Harvey Ma: Well, I'll go back to my original talking point is that there's goodness to be had inherently in all of our segments that can be shared back and forth. And I'll focus on the Sam's Club goodness because I think that's the part that I've had the pleasure of actually building now for the past two years. [00:13:48] Harvey Ma: There are really three drumbeats that we're prioritizing from a Sam's Club Connect perspective. The first is this notion of membership, which Tom, I do wanna stress is a little bit different than a loyalty program because [00:14:00] it is one of the very few programs that exist where you actually have to pay to shop with us. [00:14:05] Harvey Ma: And so if you think about the responsibility now for a retailer to deliver both the items, the assortment, and also for me, the advertising that delivers upon that member promise, those are profound. What it unlocks, though, is one-to-one deterministic and longitudinal data, which I think is a, a little bit different than what others might perceive as just a, a loyalty play. [00:14:26] Harvey Ma: Because the magic and holy grail behind the Sam's Club are for someone that's like me operating a commerce media business, you, you have to scan your membership ID no matter what you do or what you buy. And so Todd, uh, you might have heard me joke around before in the industry, Todd, you could come to a Sam's Club, you could dump a jar of pennies all over the cashier's desk, and I still know exactly who you are, and that nature of fidelity, measurement fidelity is very unique. [00:14:53] Harvey Ma: So that's value prop number one. Value prop number two, which is unique to a club, is what we call breakthrough [00:15:00] experiences. So I don't know if either of you shop at a club regularly. I have two children, thirteen and eleven, my daughter and my son, and every single weekend they say, "What are we gonna eat? [00:15:09] Harvey Ma: What are we gonna smell? What am I gonna throw? What am I gonna play with at a Sam's Club?" And they love that piece. And so thinking about what that looks like at a warehouse retailer, uh, the experience is actually very much built into the retail experience, and so we owe them that. And so when you see what Sam's Club Connect does, we do a lot of things like parking lot events. [00:15:27] Harvey Ma: I'm sure we'll talk about that. We do a lot of community events. Um, and then in the clubs, all of sampling, all of demos, those things, they all actually flow through our ads business, through Sam's Club Connect. Um, the uniqueness of that is that we actually measure all of that at scale and, and oftentimes we actually bundle that with the media because what better way to drive awareness to the demo than to actually tell a member before they have a planned trip? [00:15:51] Harvey Ma: And so that's the cool part about bringing those things together. And then finally, I touched on it a bit with the membership model. Our third value prop is what we're calling that clearer [00:16:00] proof of impact, and that proof of impact is so critical, meaning I have the pleasure and luxury of not having to extrapolate for anything because our measurement is one-to-one deterministic. [00:16:11] Harvey Ma: So every, every tender is traceable for me, every member is measurable for me, and that clearer proof of impact means that when we show you things like incrementality, we actually know definitively at the member and at the SKU level, which is a pretty unique, uh, suite of tools that a, that a membership in a warehouse-based business would have. [00:16:31] Merchants Versus Media [00:16:31] Todd: Well, and also unique, you actually brought up, an interesting difference between yourselves and one of the other leading, uh, clubs, Costco. Which is your demo and member events are running through Sam's Connect, whereas that is firmly on the merchandising side still in Costco. And it's an interesting difference 'cause I think that, th- right, this, that is the sixty-four billion dollar question across RMNs. [00:16:58] Todd: What ends up in... Or, uh, retail, I [00:17:00] should say. What ends up in the RMN and when, what's in merchandising? And who controls what and why and how? And the differences the different businesses take and how they approaches, approach that organizationally, I think is fascinating. [00:17:11] Todd: I would, as a non-retail person. Now, Tom's the retail guy. I'm, I'm the, the ad guy. And as the ad guy, I agree. I think it belongs in an organization like yours, right? You're the-- Like, the merchandiser's job is to get products sold. They're not ad people. They're not salespeople. Like, I get demos kind of lead to that, but you're an organization that's meant to service and, and track and make sure those dollars drive ROI and, and know how to communicate that, know what products need to track that, how you think about data. [00:17:42] Todd: Whereas to me, it always felt weird that it was part of a merchandisers whose job is to buy stuff, to turn around and then sell things back to the person that they're buying from. That always seemed like a weird thing, and maybe Tom, you've got a different perspective on that. But that always seemed like at cross purposes, and I appreciate more your [00:18:00] organizational structure, Harvey, versus maybe others [00:18:03] Harvey Ma: It's interesting you bring that up because I actually think it's an, it's an and statement and not an or statement. Uh, Walmart Inc. has some of the best merchants in the world. Obviously, you've, you've all [00:18:14] Todd: obviously, yes. They've, they're, they've killed it for year, for, you know, decades [00:18:18] Harvey Ma: And, and I'll tell you, Todd, I actually think Sam's Club has even some of the best within Walmart, but here's the reason why. [00:18:24] Harvey Ma: Because the assortment is so curated, they have to pick winners. Everything has to be a winner. There's just not a lot of wiggle room to, to pick any duds in assortment. So with that being said, you're right. Their focus should be on finding the very, very best items at the very best price, which is what they're best at. [00:18:43] Harvey Ma: And then the beauty now is that, Tom, you know, I used to be a buyer in, in the retail world. The best part is that they can call their friends at Connect and, you know, we built the model deliberately that we are structured in parity with our merchants. And so it's not like we have 100 merchants to one Connect [00:19:00] person. [00:19:00] Harvey Ma: We literally have a Connect individual that calls on every single merchant in this entire company. And so when you pick the best item at the best price, you can call your friend at Connect and say, "Hey, how would I get this out there?" Demos are such a critical part of getting that item out there. But Todd, to your point, importantly, if you're not a Sam's Club member, how do I show that goodness of that item if you're not a Sam's Club member? [00:19:23] Harvey Ma: That's really where we have to advertise and, and get that out. And so I think a lot of it's just a, it's a harmonious relationship with our merchants. Um, they come to us often, in fact, almost every single hour on the hour of like, "Hey, we have a cool new item. Could you put together a demo program for us?" [00:19:38] Harvey Ma: And the conversation really starts to blossom, which is like, "Well, outside of demos, are there other things you'd wanna try?" And that's, Todd, I think where the magic really starts to happen and some really fun things can, can get created, which I'm sure you're gonna ask me about one later, later today. [00:19:51] In Club Ads That Feel Organic [00:19:51] Tom Limongello: we were gonna ask you a really hardball question, which is kinda like, you know, whether it's Costco, Sam's, BJ's, all of them, I don't see a lot of advertising as a, as a [00:20:00] consumer, even as a member of, of these, whether you like to, you know, advertise to people who are not members or not, that's another question. [00:20:07] Tom Limongello: Where, you know, where is the media opportunity, um, in a world where the treasure hunt or the store experience is so good, where there's limited number of items? Like a lot of retail media is about making sure that, you know, brands are getting more and more exposure. Well, you can't give them more exposure. [00:20:25] Tom Limongello: You can only give them what, what they deserve. So in that mindset, what is the advertising opportunity? [00:20:34] Harvey Ma: Tom, you don't know it, you have made me so happy. You've made me [00:20:37] Tom Limongello: Okay. [00:20:38] Harvey Ma: uh, because you've said that I, I've never seen an-- I don't recall seeing an ad. You know what, uh, I'll tell you, you know, we have, we have, um, uh, our e-com leader, his name is Greg Pulsipher, he is, he and I, obviously our organization are, are symbiotic. [00:20:52] Harvey Ma: Uh, they-- we have to run together alongside our merchant teams. We try so hard to make the entire [00:21:00] site, O&O, all of our properties and offsite feel so organic that it doesn't feel like a gigantic advertisement. You'd be surprised, Tom, now that you know what the ad load looks like on samscub.com, what it looks like on app and desktop, uh, and even offsite. [00:21:15] Harvey Ma: Um, let me give you one example, though, of some of the opportunities. Let's start with in-club 'cause I know, Tom, you're, you're really a big fan of in-store and in-club retail media. Yes, the price points are great. Yes, the items come at a larger pack size. Yes, they do a lot of the merchandising and it sells the product. [00:21:31] Harvey Ma: However, I would also argue that sometimes you don't wanna try a forty-eight pack of something, you would rather demo it. You would rather smell and taste it. So that's actually where demos come in. Let's talk about exploration. For us, creating the atmosphere of shopping is just a critical part of opening up your wallet because, gosh, you know, going back to old school retail, smelling fresh baked bread when you walk into a retailer makes you want to buy baked goods. [00:21:58] Harvey Ma: It's one of those things. It's [00:22:00] why Las Vegas pumps in the sounds of a casino, like coins dropping and the smell of money. They, they do that on purpose. A lot of our parking lot events are meant for that. We set the stage for things that you didn't even have on your list. Remember, that treasure hunt feel is so cool, but what better way to prime the pump for the treasure hunt than to get you in the mood for shopping? [00:22:18] Harvey Ma: And so a lot of the things that Connect builds are actually you'll see these parking lot activations that happen even before a member enters the club. They see something, they smell something, they get to hold something. Uh, I'll give you a real-time example. You know, during the NFL Draft Day, we curated an event in our clubs where you actually got to go and meet, uh, prospects, NFL prospects in the parking lot, and we were [00:22:40] Todd: Oh, very cool [00:22:41] Harvey Ma: And what better way to draw you into the club than to meet maybe an, up-and-coming star? But, like, those are the kinda things that get members to come to Sam's Club on an unplanned trip. Then they're in a great mood, they get to eat a hot dog, they try a beverage or a snack for the very first time. [00:22:55] Harvey Ma: And guess what, Tom? The connection between that and conversion in the club is so [00:23:00] high. We've [00:23:01] Todd: See, that's [00:23:01] Todd: an interesting data point, right? The, the tying the events to the conversion and, uh, by the way, as a publisher, back in the day when I was at I Can Haz Cheeseburger, we did some cool events, and that was what we often got hired to do. So it's interesting to hear and see some of those same tactics kinda getting leveraged on the retail and the RMN side, "how do we build awareness and traffic off-site in a larger world?" [00:23:21] Todd: We're gonna be the drivers of that and really control that because we have the targeting data. We have the partnerships and the plumbing into those places. And then the last thing is that's fascinating, as I was part of the publishing universe, you know, ten, fifteen years ago with the rise of native advertising, and the goal there was how do we make advertising to appear as organic as possible within the publishing environment. [00:23:43] Todd: And really what's interesting is retailers really doing and, and taking those early ideas and leveraging it to, Tom, to your point of like, "I don't even realize I'm getting advertised inside a retailer." I think that's... We've sort of like we're coming full circle, and a lot of the ideas we had online of ten, fifteen years ago, we're now doing it and now [00:24:00] adding in the idea of experiential slash in-store, off-site and in-store all in a holistic package and being run. [00:24:06] Tom Limongello: , Right. But [00:24:06] Todd: largely because of not publishers, but RMNs [00:24:09] Scan And Go Ad Products [00:24:09] Tom Limongello: But Todd, we, we didn't have him on last year, but last year your whole, uh, talk track was about the mobile app and the ability to scan and go and potentially having a surface in the store where you can personalize ads. And so where has that gone? The experiential stuff, there's more of that, and I think we should talk more about that. [00:24:30] Tom Limongello: But just the idea of what Todd's talking about, taking what the publishing industry was always looking to do and being able to do that in the store, not even on a screen externally, but on your personal phone. What have been the results of that? [00:24:43] Harvey Ma: Yeah. Let me share two proprietary products that we're very proud of that you might not even know about. One is actually we have an ad unit within Scan and Go. So a very rudimentary example would be you are browsing and carousing through our club [00:25:00] aisles, and you buy a bag of chips. [00:25:01] Harvey Ma: So as you're in the app environment itself, and you scan that item, you will see a complementary item pop up personalized to you, and you can buy that ad unit. We actually believe that that is the closest ad you can get to point of sale of anybody in the industry right now because it's different than any other ads you see because you are literally in the conversion moment right then and there. [00:25:24] Harvey Ma: And Tom, you can add it right to your cart, right from the ad unit. And so, again, a lot of beverages pair themselves with snacks. You've got protein powders and fresh berries. You've got all kinds of things. So that's one very unique ad unit, and we think, again, it's the closest point of sale ad you can possibly get. [00:25:42] Harvey Ma: The second one that's new for us is we have a, a product called our Scan and Sample tablets. So on the demo cart itself, let's say that you really like the item. What we found from members is they really love to give feedback. They love to give feedback because they want to feel like they have control of what happens in the [00:26:00] club. [00:26:00] Harvey Ma: Well, as you scan and as you are tasting that sample, on the demo cart itself, there is a tablet where you scan your membership ID, and it's a simple one question. You can leave a five-star review. And guess what? We feed that review directly into our PDP in near real time. So we sell that product to a supplier or manufacturer. [00:26:21] Harvey Ma: You can actually boost your product rating significantly. I will share an example with you. We had a national brand vendor who had a three-point-eight-star rating. They bought this ad unit from us on a demo cart. In one weekend on a Saturday, they went from a three-point-eight star to a four-point-five star with over a thousand reviews on a single day, on a single shopping day. [00:26:43] Harvey Ma: Now, you know, those, those are the kind of things we actually demoed that at Cannes, and, uh, you know, for those listening to the podcast, you probably need to call us fast because I'm, I'm very quickly running out of inventory on that one. But the ability to influence your product [00:27:00] reviews on PDP in real time, that was an innovative ad unit that we created, uh, in collaboration with our product teams and, and our suppliers. [00:27:07] Harvey Ma: So there's two examples of, like, what-- how we're taking a little bit of a different spin. Yes, we've got screens, but Tom, everyone's putting screens in now. We still have those, and they are still a very important advertising vehicle for us. But for us, it's like getting closer to the point of sale in a personalized way that makes members feel like it's value added. [00:27:25] Harvey Ma: That's a unique difference that we're trying to build. [00:27:27] Todd: Well, and what's fascinating is that truly is a native ad, right? One of the, the... As, as I was part of the, the technical working group at IAB that built the spec around, um, native ad tech, and it's fascinating to see it, uh, that plumbing effectively show up in what you're talking about is what's behind that. [00:27:44] Todd: And that, by the way, that is a very cool ad experience that you just described, and I think that's fun. And for those of us who've just gotten bored to tears about three, slinging 300-by-250s and 728-by-90s or whatever, this is really interesting and innovative to the point of, right, saying it's, [00:28:00] it's an experiential, it's in-store, it's tied to a device, it's tied to an identity spine. [00:28:06] Todd: Like, it, there's so many cool things. I don't know if, for those of you who've never had to stitch any of these types of programs together, this is crazy cool stitching. It is. Like, combining all these systems, having built ad tech in, in, you know, over 20 years, this is the type of stuff that sounds trivial, but is really cool and w- and hard to do, and the lift behind it was, you know, significant. [00:28:30] Todd: But now that it's there and it's executing, this is cool stuff [00:28:33] Harvey Ma: Todd, I'm gonna throw an offer out there for you. Um, I've been on a few other podcasts and other publications before, and they couldn't believe what they were hearing. Whenever you're in market, I will take you to a Sam's Club. [00:28:46] Todd: Great. I wish there was a Sam Club still in Seattle. There's not. It shut down like 10 years ago, and it, it, it, you know, so... [00:28:52] Tom Limongello: We got, we got one in Philly, actually New Jersey. So yeah, if you wanna come, come, [00:28:56] Todd: I used to go to the one in Jersey [00:28:58] Tom Limongello: yeah. [00:28:58] Harvey Ma: have to [00:28:58] Todd: back when I lived out there [00:29:00] twen- you know, years ago [00:29:01] Harvey Ma: I'm gonna let you just play. [00:29:02] Harvey Ma: You just play and, and you'll see what I'm talking about. And I think when you see some of the ad units now, Tom, as you're paying attention, you'll be, you'll be surprised, uh, at where we show up, how we show up. And when we say like right place, right, right person, right time, uh, you'll see some of these ad units. [00:29:18] Harvey Ma: They're, they're quite, I think, advanced in terms of different than what maybe other on app ads might look like, which are just sponsored. We still have sponsored as well, but some of these truly are in-the-moment Azure shopping, which I think are quite unique in the marketplace today [00:29:32] Todd: Absolutely. Now, I've quickly, or probably over the next couple years, we'll s- probably see a lot of, of imit- imitators of it. But this... A- and I'm sincere when, in pointing out that this is a cool ad unit, and this is the type of innovation that if you're pitching it to an advertiser and they go, "I've never heard that before," and that's really pract- more important, it's practical, yet cool, right? [00:29:56] Todd: I think that's the thing that, that's nice about it. It solves a real pain [00:30:00] for a supplier, for an advertiser, for a brand, and at the same time delivers a lot of value, but stitches, to an ad product guy, a lot of cool systems together for a really interesting end user experience at the same time. Like, this is cool stuff, and that's why I'm, I'm sincere in, in pointing this out. [00:30:18] Todd: Like, I, I see all the Venn diagrams of this system and this system in my head talking, and what it probably took to build this, and if it, you know, working the way you're describing at scale across, you know, entire club footprint is really cool [00:30:32] Tom Limongello: All right, so you knocked that... [00:30:33] Harvey Ma: the effort, Todd [00:30:34] Tom Limongello: Yeah, you knocked that [00:30:35] Todd: I do. It's great. It's cool stuff. I can't wait to see this across many other retailers inspired by what you guys have built. This is cool stuff [00:30:42] Vizio Vibe And Commerce [00:30:42] Tom Limongello: So before we get to more experiential, 'cause I really wanna get to Race to the Club, I do wanna ask about Vizio. So Vizio and Vibe, uh, two acquisitions that happened. You know, one of the things that's interesting about having you on is that we have lots of retailers who are on who are looking to talk about, like, their press [00:31:00] release of, like, one thing that they've launched. [00:31:01] Tom Limongello: You guys kind of have invested in everything, and so you have everything. Um, but what's interesting from, you know, getting your perspective is actually looking forward to things that haven't been done before. You just gave us one with mobile ads that are personalized in store. Nobody's really gotten, uh, me to understand what's happening with TV ads, CTV ads, whatever, whatever you wanna call that channel. [00:31:27] Tom Limongello: Um, and so can you give us some understanding of what's happening with Vizio? What- whatever you can tell us, 'cause I haven't heard much [00:31:34] Harvey Ma: Why don't I do this? Uh, rather than focus on Vizio, let's just talk about what the signals that we brought together under Seth Dallaire mean for what we think is not just global ads. Remember, Seth has probably arguably one of the coolest jobs at Walmart Inc. because outside of just ads itself, he now also owns our Vizio business, our marketplace business, and also our data [00:32:00] ventures and Scintilla business. [00:32:01] Harvey Ma: The reason why it's so cool is because now all of those work in concert and harmony with each other now in, in addition to advertising. And so if you think about the power of now a membership-based model, a marketplace, an ads business, the hardware and the software of a Vizio, and now also a data business, all symbiotic and working together in harmony. [00:32:25] Harvey Ma: You've heard the industry change the term retail media, and they're trying to actively change that to commerce media now. Tom, the implications now of all of us working together under the same umbrella, like that is profound. And so I will... You know what? I'm not gonna share anything with you yet because that's just gonna force you to have to get some of those folks on a next podcast. [00:32:42] Harvey Ma: But when you start to see some of these releases come out, I think in the future, you'll understand that what we want is it's not just ads. Ads work in harmony with a marketplace, with a membership model, with the hardware and software that serves the physical infrastructure and the tech itself, in addition to the data business underlying. [00:32:59] Harvey Ma: When all those things [00:33:00] come together in harmony, I do think you have a really powerful now commerce business. Not just the name, not just commerce media, a commerce business. Uh, and that's what we're trying to construct at Walmart. [00:33:09] Todd: Well, I think, you know, you, uh, to, to double-click on the use of the term commerce and as it means to Walmart's strategy around this, that I think is a, a good way of describing it, right? Which is there are touchpoints, there's data, there's hardware, there's a whole ecosystem that you guys are obviously looking at and checking the boxes to make sure you have, to Tom, your point, all the pieces of that puzzle. [00:33:32] Todd: And I think that to me is what I hear you say, Harvey, which is we are being deliberate about trying to make sure that we have all the components necessary to have an end-to-end ecosystem to create a meaningful commerce, quote-unquote, "media business" attached to that commerce business. So, uh, that, that's I, I think a reasonable summary, I think of at a high level of what you guys are thinking about with regards to Vizio and Vibe and everything else. [00:33:58] Tom Limongello: But I also [00:34:00] appreciate the, the tease and all the other new guests that you're gonna send to us, and all the Shopper Missions posts I'm gonna write about this. So I like it. [00:34:06] Race To The Club Explained [00:34:06] Tom Limongello: Um, I also think that I kind of derailed us talking about that because we were talking about experiences, and when we had our prep call, I finally understood what you were talking about with Race to the Club. [00:34:18] Tom Limongello: Initially, I was like, "Oh, you're sponsoring IndyCar. Yeah, whatever." I'm also not a, I'm also not a car guy, so I didn't really care. Yeah. [00:34:26] Todd: do that very often, but it's funny to see it. Like, I've seen that before from him, but to sort of like see this live, usually that's me saying it, so when he says it, it's kind of funny. But yeah, go, go ahead [00:34:36] Tom Limongello: So, so tell us, this is almost like you're creating Sam's Clubs on location, like VIP places where not only you can get members to have a good time, but you're bringing in the vendors to demo their products, right? [00:34:51] Harvey Ma: Yeah, um, I'd love to talk about Race to the Club, and Todd, I'm sure you're gonna have lots of questions because you've been in the space of experiential, and I think the industry had a perception [00:35:00] that, yep, here comes Sam's Club sponsoring an IndyCar. That was actually not the inception of the project. It was, how do we bring the goodness of Sam's, the unique item curation, all these ridiculously good things that our buyers have br- brought to bear, and how do we show that off if you're not a member? [00:35:18] Harvey Ma: And if you are a member, what kind of benefit can we provide for you? And so we created a concept called Race to the Club. Now, let's just start with the in-club activation 'cause we can talk about that. So during race cities, we actually build a parking lot activation, and so you get to see, taste, touch, and do all the things you wanna do. [00:35:35] Harvey Ma: We even hosted a country music concert in the parking lot prior to the race series because if you are a Sam's Club member, free admission to a band called LANCO, which was an up-and-coming country music artist in Nashville. Great. Bring your family. We, we had burgers, we had hot dogs, we had members mark samples. [00:35:52] Harvey Ma: You get to eat, you get to try things. We had a vacuum cleaner where you could, like, dump things on the floor and actually try it, and guess what people were buying? We had VIZIO TVs. We had [00:36:00] the VIZIO bus out there, but it created a really cool member experience. So if you were going to Sam's Club that weekend, you got to hear great music, you got to eat, taste, and play, and you got to... [00:36:10] Harvey Ma: if you were not a member, they would drive by and wonder what the hubbub was all about because they'd see all these cars in the parking lot, and so it was a member acquisition tool for us as well. Now, Todd, we also took this to the track. So the original vision was, what would it look like to bring Sam's Club to cultural events knowing that there's these really cool moments where lots of members and prospective members could be? [00:36:34] Harvey Ma: So we set up the fan zone. In that fan zone, the very same car on the very same track that our driver, Kyle Kirkwood, is driving on, you can drive it in the simulator. So, and if you remember, you got to bypass the line. There was, like, a VIP entrance which made the non-members envious. That made them wanna sign up for membership. [00:36:51] Harvey Ma: We had a prize wheel. We're doing giveaways. We were actually demoing product. So the product we wanna show off is, what better way to understand if you wanna buy a [00:37:00] portable air compressor for your tires than to actually pump them up live there with a professional IndyCar driver sitting across your shoulder? [00:37:09] Harvey Ma: Like, we sold so many units of those at the actual race event itself, but it gave members and non-members a chance to just try and see what Sam's Club can provide. And so if you just think about tying all those things together, and then, Todd, being able to measure those at scale, at the member and SKU level, that was actually what we thought was, like, retail media brought outside of our O&O and outside into our physical environments. [00:37:32] Harvey Ma: And so Race to the Club is so much more than just an IndyCar sponsorship. Think about what that could look like for any cultural moment, any cultural event across sports or entertainment. This is essentially the philosophy and the vision behind how we built it. Um, [00:37:47] Tom Limongello: yeah. [00:37:47] Tom Limongello: I mean, it's like off-site 3D. It's like Disney's Lightning Lane. It's like, you know, all, all these things are going off in my head. Um, you know, it, it just sounds like you guys are doing something that extends [00:38:00] your reach. And what's interesting is, you know, earlier in the discussion you were talking about we would, we would advertise to people who are not in our-- who are not members. [00:38:08] Tom Limongello: A lot of other clubs might think of that as wastage, so it's-- I'm really interested in hearing this approach. [00:38:14] Harvey Ma: So here's the other cool thing. If you were an existing Sam's Club member and you upgraded to a plus membership, we gave you a free race ticket. The price of the ticket is more than double what that upgrade cost, so do the math. Like, it was almost a no-brainer for those that wanted to sign up. If you were a non-member, we also gave you a free race ticket for the weekend. [00:38:35] Harvey Ma: And so again, it was a means for us to help offset what I think might be a hurdle, which is the cost of membership, and bring it out to a cultural event where, you know what? If you wanna watch the race anyways, hey, guess what? Think of it this way. You just got your Sam's Club membership for free. That was a way that lots of folks thought of it, so it became a membership acquisition tool for us. [00:38:55] Harvey Ma: And I also, because I work for Walmart Inc., wanna pay it forward to our associates. We have so [00:39:00] many associates that work in clubs, work in the field, work in these race cities, and they get to now participate in these events, wear the Sam's Club jerseys, wear the Kyle Kirkwood jerseys, and have their logo plastered all over them. [00:39:09] Harvey Ma: Um, those are almost, from a employee perspective, associate perspective, a, a moment of pride. So if you think about just what it did, so many benefits we try to do from an advertising perspective, but also just so many benefits as it relates to members, for advertisers, and for our associates as well. [00:39:24] Harvey Ma: Um, again, we're still experimenting, but hopefully what you're trying to-- what I'm trying to explain is the vision behind so much more than an IndyCar sponsorship [00:39:32] Tom Limongello: I think you got there. [00:39:35] Wrap Up And Next Stops [00:39:39] Tom Limongello: Well, I wanna thank you. Um, this was a great discussion. We- we're gonna have to find time to visit you, visit the racetrack. Um, where are you gonna be next? What's happening, uh, after, after Labor Day with you? [00:39:48] Harvey Ma: I know that the next big industry event, I believe, is Grocery Shop, I believe. I think there's a couple of smaller ones in between. I think Grocery Shop is the next big one, so I'm sure that I'll see you on the [00:40:00] Las Vegas Strip. Um, but yeah. And, and my offer still stands. If you want to come out to a club, I'm happy to give you a personalized tour anytime. [00:40:08] Harvey Ma: And I think when you start playing, and that's really the way it is, when you start playing, I think you'll see the magic we're trying to create. As the tagline, we trademarked the term, we wanted to be the industry's first retail experience network, and hopefully what you're hearing and seeing is that we're trying to make that come to fruition versus just making it words on a page [00:40:25] Todd: I know it's cool stuff, and it's cool to see it happen and this example of innovation, again, rather than just slinging the same old banner ads, the same old sponsored search. It's a lot of new formats and new opportunities and , programs for, for advertisers that deliver real value. [00:40:41] Todd: I mean, that-- I totally get what you're-- and why it's gonna be sold out, um, and why I expect I'll see 40 knockoffs over the next two years, um, in the same way, which just is-- will be a tip of the cap. Like, you know, there's, uh, imitation is the sincerest for-form of flattery, so [00:40:55] Harvey Ma: Well, thank you very much both of you for having me. I've really enjoyed the conversation [00:40:59] Tom Limongello: Yeah, it was worth the [00:41:00] wait. [00:41:00] ​ [00:41:03]