The world’s largest retailer is dipping its toe into the California dotcom innovation hotbed with the acquisition of a social media company that has created a platform to connect people with relevant real-time information.
According to Walmart’s statement, the Kosmix team – including its founders - will operate as part of the newly formed @WalmartLabs and continue to be based in Silicon Valley.
Hold on a minute, @WalmartLabs? What’s this all about then? Putting to one side the stupid late 1990s tech bubble name, this sounds like it could be very exciting.
Walmart says that the @WalmartLabs team will create technologies and businesses around social and mobile commerce that will support Walmart’s global multichannel strategy. That’s the type of development one might expect of Tesco, or Amazon. Surely not Walmart?
But actually the grocery giant has been making real progress on innovation in the past couple of years, after initially being slow off the mark with ecommerce.
For instance, Walmart’s UK business Asda has already made great strides with its use of social media through its monitoring centre The Orb. In particular, it is mining the data available online to provide real-time insight into customer sentiment, emerging issues and opportunities.
As a result, Asda’s corporate communications and PR team are able to anticipate and take a lead on issues that social media means can quickly become news headlines.
The Kosmix acquisition gives Walmart a very interesting platform to take its use of social media further, potentially delivering services back to its customers that allow them to more easily navigate the web, and linking content with the products it wishes to sell them.
As Kosmix co-founder Anand Rajaraman says: “Our work has focused on developing a social genome platform that captures the connections between people, places, topics, products and events as expressed through social media - be it a feed, a tweet or a post.”
In reality this could mean Walmart being able to deliver content from across the web about particular products on its website product pages. Or it could deliver location-specific social media content to customers through their mobile device; perhaps as a shopping companion application to aid customers browsing a Walmart store. These are just two ideas, both of which it is quite possible to deliver today, though the possibilities are almost endless.
But the real news in this story is the creation of @WalmartLabs. Not everything it develops will be a success. But if it begins to create a culture within this giant company where innovation is valued, and the failure of some ideas is seen as essential to competitive advantage, then it bodes well.
As a wrote about more than a year ago, retailers need to begin to think more like technology companies, and buying a Silicon Valley based tech start-up is one of the most straightforward ways to kickstart this.
Well done Walmart.