Will Walmart’s innovation strategies pay off?

Discussion
Photo: Jet.com
Jul 21, 2017
Debbie Hauss

Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.

With Amazon continually looming with quick product delivery, competitive pricing and a seemingly infinite product selection, all traditional brick-and-mortar brands must take notice. So, I give Walmart credit for standing up and fighting with some recent innovative moves.

Let’s take a look at what the company has been up to recently:

  • Acquisition of Jet.com for $3.3 billion;
  • Acquisition of Moosejaw for $51 million;
  • Acquisition of Shoes.com for $9 million and ShoeBuy for $70 million;
  • Acquisition of Modcloth for less than $75 million;
  • Potential acquisition of Bonobos for $310 million;
  • Last Mile Associate Delivery Strategy; and
  • Virtual Reality investments in employee training; and
  • Automated grocery pickup test in Oklahoma City.

Also in 2017, Walmart launched a Technology Incubator called Store No 8 in Silicon Valley.

“Sometimes you invest in these big transformative ideas that maybe aren’t ready for prime time today,” Seth Beal, SVP, incubation and strategic partnerships, told Fortune. Mr. Beal is leading the Store No 8 initiative along with Katie Finnegan, a head of strategy at Jet.com.

Confirming the company’s go-forward focus on new technology and automated capabilities, Walmart CEO Doug McMillon assured employees at its annual meeting that they still matter:

“We will compete with technology, but win with people,” he said. “No doubt our work will be different in the future — robots, drones and algorithms will do some work that we used to have to do. Some people are afraid of what these changes will bring. I don’t think we should be. Instead, I think we should recognize that we’ll be able to learn, grow and change together.”

Walmart is definitely making strides in retail innovation, as executives representing the retailer’s new efforts are being recognized in the industry. Retail leaders from Jet.com, Moosejaw and Walmart received Retail Innovator Awards in 2017 and two Bonobos execs were recipients at the first Retail Innovator Awards presentation in 2014. The Walmart folks were extremely proud and excited to receive the awards in recognition of the company’s innovation efforts. It’s definitely a sign that times are changing for the 50+-year-old retail behemoth. 

DISCUSSION QUESTIONS: Is Walmart on the right path with its innovation strategies? Which actions do you find most promising for the company? Do you feel that Walmart is beginning to close the online gap with Amazon?

Braintrust
"Not all of their new adventures will pay off, but some will and will lead to further retail disruption. "
"Look at the bulleted list in the article and compare it to Amazon’s list. Which one is more customer-centric?"
"Amazon is still largely a faceless business to the average customer, whereas Walmart very much has a physical presence."

Join the Discussion!

16 Comments on "Will Walmart’s innovation strategies pay off?"

Notify of

Sort by:   newest | oldest | most voted
Charles Dimov
BrainTrust

ABSOLUTELY, Walmart is on the right track! More retailers need to start following in Walmart’s footsteps. There was an awakening of the giant, noticing that Amazon was encroaching more and more, and they have started doing something about it. All retailers need to follow suit, change, adapt, bring on the right technology to do compete effectively and DO IT.

Most promising are the innovations in omnichannel retail. Walmart has three or four pickup methods, for example, where most retailers offering click and collect services only offer one, maybe two pickup options. Customers are simply going to expect more and more, so we need to get moving.

Are they closing the gap? That has yet to be seen. Amazon is not slowing down, so it is a matter of continuing to accelerate, innovate, try new things and keep the momentum going. This advice isn’t just for Walmart, though. We all need to take these actions, not just to survive, but to thrive in today’s retail space!

Sterling Hawkins
BrainTrust

I’m with Charles; they’re on the right track for sure! They’ve put together what appears to be an effective M&A strategy along with long-term strategic investing in things like robotics, AI, drones and other more emerging technologies that may take a bit longer to prove out. Innovation is accelerating and Walmart is more than keeping pace.

Shep Hyken
BrainTrust

Walmart isn’t making acquisitions and innovating to compete with Amazon. They are a viable player in the market and must do what they are doing to stay relevant in the marketplace. That includes competing with Amazon and anyone else in the retail industry. That’s what the best retailers do. They change and shift with the times to stay relevant. Today’s consumers have different buying habits than they had in the past. Walmart is adapting, and if there happens to be a major competitor in the way, such as Amazon, they will take them on as they do any other competitor. By the way, Amazon feels the same way.

Max Goldberg
BrainTrust

Walmart is doing all it can to compete with Amazon in an ever-changing retail environment, and those innovations and acquisitions are paying off in increased sales and by narrowing the gap with Amazon. Walmart management has not been afraid to reach outside its comfort zone to bring successful e-commerce entrepreneurs into its orbit. And then they’ve had the good sense to listen to these experts.

Art Suriano
BrainTrust

I like the fact that Walmart continues to try a bit of everything. Technology is moving at high speed with new ideas and concepts almost every day. Where the human being will wind up in 10 to 20 years is a major concern because if there are no jobs how will people survive? If Walmart stands behind its message that their employees will still matter, that can help assure their employees of job protection, even if it is in a different role.

Walmart can benefit if they can be the leaders of utilizing the best technology combined with the best services provided by humans. The retail store of the future will be much different than today with, as the article said, robots, drones, etc. but with humans still being part of the overall experience, Walmart stores will attract people that come to shop, and that is SO important.

Gene Detroyer
BrainTrust

I give Walmart an “A” on the instant poll. Not because they have or will be successful on their innovations, but because they are trying. Amazon’s success today is all about trying, and trying and trying and failing most of the time. But when they find that successful innovation it leads to greater success. Too many companies, especially retailers, are too afraid to try something because it might fail. Amazon was never that and now Walmart is doing the same. Not all of their new adventures will pay off, but some will and will lead to further retail disruption.

Meanwhile the Targets and J.C. Penneys will continue to look for that meaningless silver bullet that they think will change everything for them.

Adam Silverman
BrainTrust

There’s a big difference between long-term strategic investing and acquisition activity. It’s good to see Walmart stretch out and begin to disrupt themselves, and that will pay dividends. The true test will be how their long-term thinking evolves and how that manifests in their culture, their products (not merch) and the experiences they provide to their customers. Look at the bulleted list in the article and compare it to Amazon’s list. Which one is more customer-centric? The clear winner is Amazon, which drives convenience for both B2B and B2C customers.

Lyle Bunn (Ph.D. Hon)
BrainTrust

The key issue is the degree to which Walmart is at pace with consumer expectations. Walmart has a long record of reading the tea leaves accurately and then innovating through partnership and acquisition to modulate its go-to-market pace. The bell curve of being ahead or behind innovation means that most innovations reflect consumer desires/behaviors and competitive needs.

Robert DiPietro
BrainTrust

Walmart is on the right path! They are embracing the change that is coming/here in retail and focusing on staying relevant. The combination of the logistics prowess, retail presence and the massive customer data set they can mine will provide a competitive advantage.

“Robots, drones and algorithms” will be the way forward.

Dave Bruno
BrainTrust

If we have learned anything from the past decade of disruption, it’s that change is now relentless. The investments to me, whether they all succeed or not, represent Walmart’s commitment to being prepared to invest in the ability to adapt. And that, in my opinion, is a winning strategy.

Brian Kelly
Guest
30 days 23 hours ago

In the last 8 years, WMT purchased over 10 tech/digital companies and parked them at Walmart Labs. I see a lot of good coming out of those investments. Seems like each major selling season a new pilot or program is rolled out. Most seem relevant. Based upon Cornell’s comments, TGT is far behind WMT with innovation. The Cartwheel announcement is further proof of that.

Walmart is evolving into a modern company and time will tell how the culture adapts. Seems the jet.com integration is causing a bit of indigestion and WMT keeps moving forward.

Walmart is not Amazon; they are uniquely different. And it’s well positioned to protect share versus balance of competition. I think its unique transactional experience (4,000+ stores) will take share in the end. Of note, 20% of rural US does not have broadband access.

Cate Trotter
BrainTrust

There’s some really interesting things going on here and I think Walmart need to be commended for looking at ways to improve and keep up with customer expectations. I think it’s also important that they’re focusing on employees. Amazon is still largely a faceless business to the average customer, whereas Walmart very much has a physical presence. Placing value on its employees and investing in them and using them the right way will be a big part in making these investments and innovations work as part of the customer experience.

Vahe Katros
Guest

For the rest of retail, the strategy might be to join forces with other retailers and struggling tech companies because this is not easy to pull off.

Min-Jee Hwang
BrainTrust

Walmart is definitely on the right track. They’re making decisions to enhance and expand options for consumers. By adapting to and accommodating for all types of consumer preferences, Walmart is demonstrating how they’re staying on top of changes in the market and making strides to closing the gap with Amazon. While Amazon is mainly online, Walmart is also focusing on improving in-store and pick-up experience, which Amazon can’t provide at scale yet.

Jett McCandless
BrainTrust

I think Walmart has been making consistently smart decisions with their innovation strategies. Jet.com was a tremendous get for them, and they’re partnering with some great suppliers. They’re also making their suppliers more efficient, while keeping customers happy, by making their delivery windows more strict. Suppliers will increase their efficiency across the board simply to avoid fines and stay on good terms.

Look, everyone in retail has a long way to go before catching up with Amazon in terms of online sales, but if anyone can do it, it’s Walmart. They have the resources and the consumer base to get it done.

Kenneth Leung
BrainTrust

Innovation is no guarantee of success, but lack of innovation is a guarantee for failure. Walmart needs to have multiple paths to innovation since they don’t know which ones will have the most impact. Better to try to innovate and fail a few times. What they cannot do is stand still.

wpDiscuz
Braintrust
"Not all of their new adventures will pay off, but some will and will lead to further retail disruption. "
"Look at the bulleted list in the article and compare it to Amazon’s list. Which one is more customer-centric?"
"Amazon is still largely a faceless business to the average customer, whereas Walmart very much has a physical presence."

Take Our Instant Poll

What grade would you give Walmart for its investments in innovation over the last year?

View Results

Loading ... Loading ...