Rick Watson and Jessica Lesesky break down Walmart&#x27;s Q1 numbers and what they say about where retail is heading. Revenue was up 7.3%, U.S. comps rose 4.1%, and global e-commerce grew 26%, but the more telling figures sit elsewhere: advertising up 37% globally and the U.S. marketplace up nearly 50%. Rick and Jessica make the case that Walmart is quietly becoming a digital services business, pulling in wealthier shoppers with celebrity lines and faster delivery, and backing it all with a $1.7 billion-a-year bet on fulfillment automation that Kroger and others will struggle to match.<br>The Watson Weekly Weekend episode is sponsored by Avalara. Its Agentic Tax and Compliance automates behind-the-scenes work for ecommerce brands, enabling accurate checkout tax calculation, clearer tariff and duty visibility, and fewer customer surprises. Avalara integrates with platforms like Shopify, BigCommerce, and WooCommerce. Learn more at avalara.watsonweekly.com<br>From there the conversation moves to Google I/O and the &quot;agentic&quot; pitch, including a universal cart meant to follow you across Search, YouTube, and Gemini through Google Wallet. Then the happiness index returns for a look at a K-shaped economy, where affluent buyers keep spending (Amex reported 10% growth in card member spending) while a lot of people are cutting back on basics like gas. Rick closes with advice for brands: shrink the gap between deciding and doing. Take out the friction, lean on convenience and automation, and you win the customer.<br>#WatsonWeekly #Walmart #Retail #Ecommerce #GoogleIO

Walmart's Quarter, Google's Agentic Cart, and the K-Shaped Economy

The Watson Weekly: eCommerce Strategy & News

# Full Transcript

**Podcast:** The Watson Weekly: eCommerce Strategy &amp; News

## Transcript

Ooh, welcome to the Watson Weekly. I'm your host, Rick Watson. It's Friday. Yes, it is Friday. Jessica Lesesky, we're back in action. You can't keep us down. They try. It seems like every week they try. They try, but we're so back. Back with a vengeance. Right. We're always back. On today's show, we have a few fun topics. First, Walmart earnings. It's not

just about the numbers. It's about the direction. Second is Google I.O. If you didn't know, there's a thing called AI and they're talking about it. And finally, the state of the consumer. We're bringing back the happiness index. That's right. In case you didn't realize, we also have a newsletter. It's at our website, WatsonWeekly.com. Go and check it out. And tell your friends. Yes. Tell your friends, like, and subscribe. All the things.

First up, we have Walmart Q1 earnings roaring in. Of course, the headlines are looking great, but to catch you up, revenue up 7.3%, US store comps up 4.1%, and globally e-commerce up 26%. That is compared to about 8% growth that Amazon usually reports. Where we say they're on a tear.

Yeah, they're on a tear. They're torn. They're torn. It's torn. I like when you go to your friend, and you're like, they have an important paper, and you pretend to rip it. You remember you used to do that in school? Oh, yes. Yeah, it's very dramatic. What's the real story for Walmart? The real story is really, they've been trying to tell this story for the past two years, I feel like, in earnings that they're becoming a digital services business.

What does that mean? It means Walmart plus subscriptions. It means advertising, of course. Yes. It's always advertising. Retail media. And it's data. Advertising grew 37% globally. Walmart Connect in the US was up 44%. And the US marketplace business where, of course, don't need to hold any inventory, jumped close to 50%.

It's pretty insane. Jess is stunned. No, it is. I mean, look, I will say that there's been a lot we talked about with Walmart. And what we also unpacked in this earnings is a tale of two consumers. They did start to talk about the shopper and what their experience is. That affluent customer is propping them up. Last year, they talked about at one point, it was driving 75% of the market share gains

because of the pressure that that less affluent customer is feeling. A little signal that I think we should pay attention to, they said there is some signs of stress. Those customers living paycheck to paycheck. Signs of stress? Signs of stress. We're a little bit stressed. Yeah. We're in panic mode. Yes, we are in panic mode for the first time since 2022.

2022, the number of gallons customers fill up with fell below 10 per trip. So they know that people are pinching pennies. And I think we should just do a little flashback. We like to go back in time and talk about how Walmart started to plant the seeds and start to attract t...

Walmart's Quarter, Google's Agentic Cart, and the K-Shaped Economy

Transcript

Built for investment professionals

Every day you wait, your competitors are finding
edge in conversations you're not hearing.

Walmart's Quarter, Google's Agentic Cart, and the K-Shaped Economy

Transcript

Built for investment professionals

Every day you wait, your competitors are findingedge in conversations you're not hearing.

Every day you wait, your competitors are finding
edge in conversations you're not hearing.