Innovation at Walmart—in Store No. 8 and beyond

Walmart is relying on its innovation lab to leverage disruptive technology — but it’s not on the journey alone.

While some industry observers define Walmart’s Store No. 8 tech as an innovation hub, the division has a very specific role. The discount giant is using the tech incubator to build strategic partnerships that can develop the next generation of retail solutions — a move that could give Walmart a leg up in the innovation race.

“There is no one Walmart organization responsible for all innovation,” Lori Flees, senior VP and principal of Store No.8, said during the “Building the More Innovative Innovation Lab” session at the National Retail Federation’s annual “Big Show” in New York.

The discounter’s in-house technology team currently tackles short-term innovation projects — those with a two-year window — across the supply chain, store operations and e-commerce. The Store No. 8 unit is tasked with finding innovative solutions that can be applied to business operations over the next three-to-five years, according to Flees.

“If you don’t find innovation early, you fall behind,” Flees said. “When you are behind, you have to get innovation from other places. But then you lack the opportunity to customize it for your company. And building everything ourselves also isn’t the right strategy.”

With an eye on speed, Store No. 8 takes a different approach. It attracts entrepreneurs onto its team, and uses an incubator’s start-up mentality — and dedicated budget — as its bait. In addition to earning a steady salary, entrepreneurs are also lured by the lab’s supportive and collaborative environment.

Despite its access to these savvy innovation partners, Walmart is not limiting its opportunities exclusively to those developed within the lab’s four walls. For example, when it was ready to delve into conver-sational commerce, Walmart looked to an established partner: Google.

By tapping Google’s AI-based virtual personal assistant, Google Assistant, Walmart was able to hit the voice commerce ground running. “It was an easier option than creating a new partnership or building our own solution,” Flees explained. “Google has enough capabilities that we were able to leverage to deliver a seamless shopping experience for the customer.”

Flees plans to continue leveraging conversational commerce — especially since she expects the concept to continue expanding.

“Right now, shoppers connect with Google and order one general merchandise item. This is very different than ordering groceries,” she explained, adding that she envisions a day when customers can use their voice to place an entire e-commerce order while on the go.

“The shopper will be able to start an order, and since the AI-based assistant knows the customer’s patterns, it will begin to question if she needs additional items — and add those to the list,” Flees added. “Today, they can order an item or two, but conversational commerce will expand — and it will all be controlled with simple voice commands.”

The next evolution of voice could also integrate a visual component. While this is an evolving concept, augmented reality could enable shoppers to envision merchandise — such as furniture — in their home, and then use their voice to place an order, according to Flees.

“The shopping experience is becoming much more interactive,” she added. “Visual technology is just another solution that will change the way customers want to shop.”

In fact, the concept may not be so far away based on Google’s recent launch of a new line of “smart screens” that will support voice-controlled tasks, including shopping.
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