Walmart Stores Inc. is trying to speed up their retail tech development and to do so they announced that they would launch Store No 8 in Silicon Valley.
Store No 8 will be a cluster of innovation whose entrepreneurs would be free and independent. This is to develop the retail technology that would be needed by Walmart to modernize. And also, it would help Walmart to fight against competitors like Amazon.com Inc.
Store No 8 is going to house startups that are run independently, but are owned by Walmart wholly. This step is due to the dynamic, new culture that Walmart is thinking of instilling into their e-commerce strategy under Marc Lore’s leadership, whose online store Jet.com was bought by Walmart for $3 Billion last year.
Walmart is vigorously trying to grow their online footprint with the expansion of their marketplace, reigniting online growth. Their digital sales rose about 30% in the holidays and in the past two months, Walmart bought Moosejaw, ShoeBuy, and ModCloth to diversify their offerings on the internet.
The CEO of Walmart, Doug McMillon is going to use the ethos of Jet.com to help them renew themselves and said that his intentions are not to hug Jet.com really tightly and let it be just a startup.
The main moto of Store No 8 would also be the same – to invest in, incubate, and work with startups, academics, and venture capitalists to develop their own proprietary technology on artificial intelligence, machine learning, augmented and virtual reality, and robotics.
Even Target is going in this direction for the next generation of retail technology. They partnered with an incubator, Techstars for this reason.
Although sometimes it’s not for a longer run, quicker payoffs from the investment done are tech. Target scrapped their Store of the Future abruptly last month because of this. This was a small format Target store prototype, which featured robots. Brian Cornell, CEO Target explained this move saying that they wanted to make sure that all the dollars they invest in innovation provides near-term benefits. In the last three quarters, Target has faced a losing streak in their sales and they want to shake that off.
Store No 8 is similar to a store that was opened by late Sam Walton, Walmart Stores Inc. founder, as an experiment to allow bolder retail ideas a platform.
Store 8 initiative is being led by Seth Beal, a Walmart Exec and Katie Finnegan, Head of Strategy at Jet.com. They feel that innovation is important and investing in big transformative ideas is the key, but they don’t necessarily need to be ready for today’s prime time. But they also don’t want to geek out too much and create impractical applications.