retail news in context, analysis with attitude

There is a fabulous story in Fast Company about the e-revolution taking place inside Walmart, as the company invests in considerable efforts that will not just defend its turf against Amazon's incursions, but reach out effectively to Americans who increasingly are using the internet to do their shopping.

Here's how the story begins:

"Jeremy King was ignoring the largest retailer in the world. For a month, he'd been getting calls from a Walmart recruiter. King was used to being wooed, since he was well known in Silicon Valley as an engineer who built key parts of eBay's infrastructure. The calls kept coming. Finally, he picked up the phone and let Walmart know exactly what it would take to get him to interview. 'I was like, Why don't you get the CEO on the phone - let him talk to me and then maybe I'll come in?' recalls King, who didn't even know who the CEO of Walmart was. 'I was being cocky. The CEO of the world's largest retailer wasn't going to meet with me just so I'd do an interview.'

"The next thing King knew, Walmart arranged for him to join a videoconference with CEO Mike Duke ... Over the next 45 minutes ... Duke made what King calls an irresistible pitch. After years of seeing his company lag online, Duke swore that digital was now a priority for Walmart. Duke had restructured the company, placing e-commerce on equal footing with Walmart's other, much larger divisions. He had made serious investments in high-tech talent, acquiring several startups.

One, a 65-person social media firm called Kosmix with expertise in search and analytics, was the impetus for Walmart rechristening its Valley operations '@WalmartLabs.' Duke was looking for people who would revive the company's sites and services, and energize its entire culture. He hoped to turn a company famous for rigid, coldly effective business processes into one that's flexible, experimental, and entrepreneurial. In other words, Duke wanted to inject a bit of Silicon Valley into Bentonville, Arkansas.

"In the summer of 2011, King signed up as CTO of Walmart.com."

And it gets more impressive from there.

You can read the entire story here.
KC's View:
And you should read it. Really.

Now, plenty of questions can be asked about whether Walmart can remake its culture to the point where it can effectively compete with Amazon's "today is day one" culture; Walmart has so many legacy issues with which it must deal, and so many competing constituencies that may see online sales as a threat rather than the future.

But the story is highly instructive about how a 21st century Walmart is trying to remake itself.

BTW...Wired has an interview with Walmart.com president/CEO Joel Anderson in which he says not only does Walmart accept the notion of showrooming, but it "embraces" it.

“You’ve got to go where the customer wants you to go," he says. "We live in the age of the customer."

The story goes on:

"This doesn’t mean Anderson would be happy if you bought from Amazon or eBay instead. And that’s always an option. But Anderson and Walmart have recognized the reality that no one leaves their smartphones in the car when they come in to shop. Since that’s the case, Walmart has decided not to fight the phone, but to leverage it as one more way to make a sale.

"The key to Walmart’s strategy is to give you reasons to use Walmart’s app while you’re in a physical store. Walmart’s stores are 'geo-fenced,' which means the location-aware app enters 'store mode' when you walk through the door. Once in store mode, you have access to an interactive version of the weekly on-sale circular for that store. You can see what’s new in the store. You can scan bar codes with the phone’s camera for prices and keep a running list of everything you’re buying so you’ll know the total cost when you get to the register.

"If you find these features handy, and get into the habit of using the app in the store, Walmart has effectively lured you into two stores at once. In a slick touch, the Walmart app interface lets you 'flip' between the two stores - physical and digital - with a single tap. If the item you’re looking for at the store is out of stock, you can 'flip' over and order from Walmart.com while you’re still in the store. Either way, it’s a sale for Walmart."

This doesn't sound like your father's Walmart.

I've been saying here since the word "showrooming" was first coined that retailers had to stop whining about it, but rather had to find a way to embrace it and make it work for them ... or be sure that their customers' smart phones were the least interesting things to look at in the store, not the most interesting.

This seems to be what Walmart is aiming for.