Walmart in digital drive

28 November 2012

NEW YORK: Walmart, the retail giant, is seeking to launch innovative new ecommerce tools at least every six months, as the firm endeavours to drive up revenues in this area.

The company hopes to generate $9bn in digital sales by the end of its next fiscal year, and has started testing same-day delivery as it tries to gain an advantage over pure-play rivals like Amazon.

"We're going to find ways to live at the edge," Neil Ashe, its chief executive of global ecommerce, told Fast Company. "Every three or six months, you'll see something come out from us that will make you say 'Wow.'"

Mike Duke, Walmart's chief executive, has named ecommerce as one of its key priorities, with @WalmartLabs, the company's digital unit, playing a central part in this process.

"The way our customers shop in an increasingly interconnected world is changing," Duke told Fast Company. "We've hired hundreds of incredibly talented people, in Silicon Valley and around the world. We are playing to win."

A key constituent of Walmart's progress in the digital arena was its purchase of Kosmix, which built a search platform capable of contextualising enquiries, for $300m in April 2011.

Based on this system, Walmart's new search engine has improved conversion rates by up to 15% depending on the category. Its "social gifting" Facebook app also recommends presents by drawing on user profiles and comments.

Similarly, social media analytics are used to monitor buzz among shoppers and predict what products may see a spike in demand, as was the case with both "cake-pop" makers and electric juicers.

Another popular initiative, Get on the Shelf, asked web users to submit ideas for goods that could go on sale at Walmart, and ultimately received 4,000 entries and 1m votes.

Elsewhere, to tap the increasingly important market of niche and artisan foods, it launched Goodies, a web-based subscription service sending members a "gift box" of samples for $7 a month.

Turning to mobile, Walmart has a voice-activated smartphone app allowing users to make shopping lists. The long term aim is to offer recommendations, locate all products in stores, enable customers to "summon" staff and, potentially, check out.

"The question we're asking is, how do you bring to a store the capabilities that have made ecommerce successful? With 200 million customers a week, if you can increase the average basket size by a dollar, that's billions of dollars every year," said Gibu Thomas, Walmart's SVP, mobile and digital.

Data sourced from Fast Company; additional content by Warc staff