A few years ago, a retail entrepreneur turning down a job at etail wunderkind Amazon to work at grocery bellwether Walmart was unheard of.
That is, before the US retail giant launched its innovation hub Store No. 8, which supercharges and collaborates with retail start-ups on technology that will transform retail over the next five years but, in many cases, doesn’t exist yet.
The venture is led by Walmart’s senior vice president of next generation retail Lori Flees, who spoke about the lab and its tangible benefits for the business at the National Retail Federation’s annual conference in New York yesterday.
Flees pulled no punches in acknowledging the utter necessity for retailers of all shapes, sizes and budgets to innovate if they want to survive the unforgiving consumer landscape of 2018 and beyond.
When asked whether Walmart’s tech success story was anomalous because of its sheer scale as the world’s largest retailer, Flees said: “It’s not Walmart’s size that has enabled us to do this, it’s our senior leadership team looking at where retail was going to go in the next 20 years and deciding we needed to disrupt ourselves rather than letting other disrupt us.
“How do you lean into the tech that will disrupt your business earlier rather than later, and see it as an opportunity rather than a threat? It’s a mindset that is not limited or enabled by our size.”
Disrupt or be disrupted
The idea of retailers choosing to be disruptive rather than being disrupted may seem like a hackneyed one at this point, but Walmart has done far more than just pay lip service to it.
Store No. 8 operates separately to Walmart’s head office, but its myriad experiments and innovations are bankrolled by the retail titan.
It is a strategy that has made retail’s best and brightest sit up and take notice.
When asked about an unnamed retail executive that had turned down a job at Amazon to come work for Walmart’s innovation hub, Flees said: “We thought recruiting for Store No. 8 would be our biggest challenge but it hasn’t been – we’ve been pleasantly surprised at the CEOs we’ve been able to attract.
“When you can show you have some momentum and are starting to win people are attracted to that. We’ve had a tremendous amount of talent acquisition relative to our peers.”
Fascinating to terrifying
The idea of authenticity and commitment to a retail vision driving business growth has echoed through the NRF conference, with examples that have ranged from fascinating to slightly terrifying.
In the latter camps sits a revelation from pizza chain &Pizza’s co-founder and chief executive Michael Lastoria that over 100 of the start-up’s employees have gotten an ampersand tattoo to demonstrate their devotion the business.
Dodgy tattoo decisions aside, it is clear that the businesses that have forged a tangible connection with their employees and customers are the ones that are thriving today.
US activewear brand Outdoor Voices uses Instagram to talk to its shoppers, get feedback and source inspiration for new product development.
Outdoor Voices also said people on Instagram with 100,000 followers or less, known as micro-influencers, are now driving much more tangible customer engagement for retailers than A-List celebrities with millions of followers.
With this in mind, it’s unlikely to be a coincidence that Outdoor Voices has been tipped as a potential acquisition for Walmart as the business seeks to build a portfolio of authentic, tech-driven retail businesses.
The grocery titan has recently acquired retail businesses including US outdoors etailer Moosejaw and size-inclusive online womenswear retailer Modcloth.
And if Flees appetite for innovation at NRF today is anything to go by, its unlikely Walmart has reached the end of its shopping list.