Walmart's Store No. 8 Start Up Incubator

Tay

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Goliath takes on Goliath. Amazon has been eroding retail giants for a long time (and destroying Malls in the process), now Walmart is stepping up it's efforts to not be a victim and use young entrepreneurs and emerging technologies to help compete by launching a start up incubator called Store No. 8. Store No. 8 will allow start up companies the ability to use Walmart's resources to their full advantage.

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SAN FRANCISCO — The purchase of Jet, an upstart e-commerce venture, for $3.3 billion last summer was meant to give Walmart, the nation’s largest retailer, a way to transform its online retail strategy.

Now Walmart is expanding its e-commerce ambitions, and it has tapped a Jet executive to help it build new start-ups within the company.

Walmart announced on Monday that it had formed Store No. 8, an internal venture meant to hatch new online retail businesses.

It is the latest sign that Walmart is trying to revamp its e-commerce playbook. That effort began in earnest last year, with the acquisition of Jet. And last week, Walmart struck a deal to buy ModCloth, an online purveyor of trendy women’s clothing.

Behind the strategic shift has been a recognition that Walmart, long dominant in the world of physical retailing, has fallen far behind in the business of selling goods online — and particularly far behind Amazon.

Jet had ambitions of becoming Amazon’s most formidable rival at a time when few credible challengers had emerged. But Jet failed to achieve profitability or emerge as a robust competitor.


Many big companies have internal venture arms. And Walmart already has an internal research lab, @walmartlabs, that has focused on developing new e-commerce applications for the retailer.

But Store No. 8 is the first incubator or investment arm of its kind at Walmart, which has a market value of $213 billion.

The new venture takes its name from an early Walmart store, built in an old bottling plant, that the company founder Sam Walton used to try out new retail strategies.

Store No. 8 is meant to foster relationships with entrepreneurs, particularly those in the fields of artificial intelligence, autonomous vehicles and other emerging technologies.

[..]

Store No. 8 is somewhat like corporate venture arms at other companies and will be charged with identifying emerging technologies that could prove useful. But rather than simply taking stakes in existing ventures, the new division is intended to help create new start-ups. It will also strike strategic partnerships with other promising young e-commerce companies.

Along with incubating new ventures, Ms. Finnegan said, Store No. 8 will be able to draw on Walmart’s resources to support any start-ups that it launches.

“We’re giving these portfolio companies the best chance for success,” she said.

Mr. Beal and Ms. Finnegan declined to comment on how much money Walmart would commit to the new venture, saying that Store No. 8 did not have a set goal for money to deploy in its investing.


Source: Walmart Expands Its E-Commerce Ambitions With a New Investment Arm
 
Interesting read.

Going beyond Store No. 8, the two companies are starting on different sides of the playground and racing to see who can cross the middle first. I guess if any company is going to compete with Amazon online it would be Walmart.
 
@GrindingTo10K Yeah, I was thinking the exact same thing but the press release sounded like it was just for startups - which is sad. I'd hate to see them do something good but miss out on a huge market and opportunity. Agree - great for competition.
 
Hopefully they create an Amazon Associates style affiliate program and their own version of Amazon Prime so us affiliates can have some real competition.

They do: https://affiliates.walmart.com/

Their rates aren't nearly as competitive though:

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I don't know anything about a Prime style shipping program though. But they're on the ball. They released a Wordpress Plugin to keep up with Amazon's move too.
 
The problem is Walmart doesn't have their own Fulfillment By Amazon (FBA) style program. They are literally 10yrs behind Amazon's sophisticated logistics network.

Not having this option means a whole list of major disadvantages compared to Amazon... third-party sellers must ship their own products, including storage, manage customer service, etc., which leads to all sorts of quality and speed issues (nobody does this better than Amazon). Which leads to a significant less catalog of products to choose from. Amazon relies heavily on marketplace sellers to complete the world's largest catalog. Amazon sells at least 350+ million different products online... Walmart has probably less than 5% of that?

In my own experience Walmart's product selection online is really sparse and not priced competitively unless it's actually sold by Walmart.com and not from their third-party marketplace... which is why your conversion rate is going to suck compared to Amazon.com as an affiliate.

Having a Prime-style shipping option is great and all unless the consumer can't find what they need.
 
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