The retail wars rage on! Ecommerce titan Walmart just snatched up popular TV maker Vizio for $2.3 billion. This blockbuster acquisition aims to boost Walmart’s ad business and consumer electronics footing against rivals like Amazon and Roku.
Walmart is already a mass merchandising juggernaut. But now with full control over Vizio’s smart TV software and data capabilities, Walmart gains powerful new advertising tools to better compete in the streaming era. Let’s break down why Walmart is betting billions on Vizio.
Table of Contents
Why Vizio?
Known for affordability, California-based Vizio has grown into America’s #2 LCD TV vendor. Their sets frequently lead U.S. sales thanks to strong value.
Vizio smart TVs also run the company’s SmartCast software. Now installed on 18+ million devices, SmartCast gives Vizio unique advertising opportunities and consumer insights versus regular “dumb” displays.
No wonder Walmart wants in on that action! Vizio’s fat user base and streaming platform provide the perfect infrastructure for Walmart to zero in on shoppers.
As Walmart says:
“Acquiring Vizio and SmartCast would enable Walmart to serve customers in new ways including innovative entertainment and media experiences.”
So while Vizio builds good-enough TVs for cheap, their software is the real jewel Walmart is after.
Competing With Amazon, Roku
Walmart is no stranger to affordable TVs through its Onn house brand. But Vizio offers smarter differentiation – especially as streaming becomes paramount to the home entertainment experience.
Amazon similarly acquires market share by selling Fire TV Edition sets from Toshiba, Insignia, and others. Roku TVs loom as low-cost streaming faves for their dead-simple interfaces.
By taking Vizio in-house, Walmart raises its game versus ecommerce arch-nemesis Amazon while tackling streaming favorite Roku in a single stone’s throw.
The retailer Previously partnered with Roku on specialized “shoppable ads”. But outright owning Vizio provides Walmart vastly more advertising control across millions of living rooms nationwide.
Squashing competitors? Now that’s the Walmart way!
Beefing Up Ad Business
But industry domination isn’t Walmart’s only endgame. This surprise acquisition also defends Walmart’s rapidly growing online ads division.
“It would create new opportunities for advertisers to connect with customers at scale” explains Walmart.
Vizio’s firsthand user data lets Walmart dish up hypertargeted marketing opportunities. Whether for its own Walmart Connect ads or external brands, more precision equals fatter ad revenue.
In fact, Vizio’s ad platform already provides over 50% of its gross profit. So Walmart eagerly takes the reins on that cash cow while harvesting viewer analytics most advertisers drool for.
Between omnichannel retail data and Vizio’s living room insights? Walmart’s marketing offerings will be formidable for years to come.
Final Thoughts
And with regulatory approval, Mr. Bezos will soon be checking even more mirrors as Walmart bears down on ecommerce and consumer eyeballs.
Vizio expectedly calls this next chapter “ideal” (wink wink). And combined with Walmart’s near-bottomless coffers, don’t expect their affordable TV assault to lose steam anytime soon.
But what say you? Is this acquisition just consolidation for consolidation’s sake? Or can the Walmart-Vizio tie-up birth something greater than the sum of its parts? Which tech and retail giants should start sweating? Share your hot takes below!
