@WalmartLabs' online and social innovations

Date : 09 February 2012
@WalmartLabs' online and social innovations

Walmart’s Get on the Shelf initiative is an innovation from its @WalmartLabs division. It encourages potential suppliers to submit online videos of their products to a public vote to gain selling space in Walmart’s stores and on its website.

As Walmart seeks to drive further innovation in this area, we take a closer look at this unit and its role in the retailer’s broader e-commerce ambitions.

@WalmartLabs: digital, social, experimentation

The formation of @WalmartLabs was a significant departure for the retailer. The name itself suggests something very different, but points to a business that operates in the online and social space. Initially formed in April 2011 following the acquisition of Kosmix, a company which had developed a social media technology platform to filter and organise content in social networks, the goal is to accelerate Walmart’s progress in this area and create an enticing environment to attract specific talent to the organisation.

Get on the Shelf

In January 2012, Walmart launched a competition to find new products to sell online and in its stores. The Get on the Shelf initiative called for submissions to be made by video, which would then be shortlisted before a final selection was made by a public voting process.

The competition, run in the US through its @WalmartLabs division, covered all product categories in Walmart’s range. The prize was for the winning product to be sold online, featured on the retailer’s home page and gain shelf space in its stores. The competition was supported by a dedicated website,www.getontheshelf.com, with a huge range of video entries.

get on the shelf

Acquisitions have bolstered capability in social commerce

In recent years, a series of acquisitions have significantly enhanced Walmart's capability in this area. These have included Colorado-based One Riot, a company that specialises in generating targeted advertising messages based on social media data, particularly within mobile environments; Small Society, a Portland-based leading developer of mobile apps; and Grabble, a mobile point of sale app developer. In addition, @WalmartLabs has established a presence in Bangalore, India, with around 100 developers who have expertise in the areas of social analytics and data infrastructure.

The goal is a seamless shopper experience

So how does all this fit into Walmart’s traditional brick and mortar stores? To understand this, it is important to take a step back and look at Walmart’s broader e-commerce goals. The retailer is aiming to lead in e-commerce through leveraging its stores, systems and supply chain to provide a seamless customer experience.

Significant strides have already been made in this area, with the development of its 'site-to-store' service in the US and 'click & collect' at Asda in the UK, while e-commerce capability continues to be rolled out at pace internationally. New propositions are gaining pace in South America and Canada, while in China, Walmart has minority stake in Yihaodian, a fast-growing e-commerce company which has achieved a significant position in online grocery sales in the country.

"In global e-commerce, we will not be just competing. We will play to win."
Mike Duke, President & CEO, Walmart, June 3, 2011

Moving in line with technology developments

However, the retailer believes that shoppers will interact with it in very different ways in the future and that there will be a need to utilise and integrate social media and location based services into their online experiences. Consequently, @WalmartLabs is focusing on analysing the intersection of social, mobile, and retail environments. The application of core technology, what has been termed the "Social Genome", is central to this and enables the company to “connect consumers with the best products based on their interests at any given moment.”

Essentially, the retailer is seeking to bring together its stores and online shopping propositions, along with new developments in mobile and social commerce to create a truly integrated shopping experience. The aim is that shoppers will get the same experience irrespective of what channel or combinations of channels through which they choose to interact with Walmart.

Developing back-end capability and front-end applications

While @WalmartLabs is a separate business unit, its outputs are being applied to existing points of contact with Walmart shoppers. To date these have included new mobile shopping apps for the iPhone and iPad and the launch of 'Shopycat', a social shopping app that enables Facebook users to find gifts for friends and family at Walmart based on their tastes and interests. At the back-end, initiatives have focused on improving search capabilities, enhancing pricing tools to enable smart pricing decisions in real-time, and optimising online marketing to provide Walmart with a larger footprint on major search engines.

Walmart shopycat

An aggressive pace of change at Walmart

Through @WalmartLabs, Walmart is now a greater authority on the subject of e-commerce and, increasingly, mobile and social commerce. The acquisitions that it has made in this area and the newly-established business unit have begun to add significant value, and are likely to continue to do so. For example, future product range decisions, events and promotions at an individual store level may be guided by the analysis of social media-based information, potentially requiring suppliers to be even more responsive to this real-time data. This will generate a need for greater agility across Walmart's supply chain.

Expectation of greater experimentation

Keeping up-to-date with the aggressive pace of change is likely to be challenging. With this being a ‘lab’ for testing innovative new concepts, expect to see a greater pace of change in the future and it combines the capabilities of its acquisitions.

However, it is important to recognise that establishing @WalmartLabs is also about creating an environment for experimentation. Consequently, suppliers which are also investing in this area may have a greater insight into which initiatives are likely to be widely implemented, helping them to better channel their own investments.