Like other leading technology-using businesses, Walmart is starting to look like a vendor in its integration of the latest technologies to serve its customers. That's what led it to buy two Silicon Valley cloud startups this week.
Tasty Labs and OneOps will be integrated into @WalmartLabs, which develops social, mobile, and retail e-commerce technologies for the company.
Dan Toporek, a spokesman for @WalmartLabs, told me that the retailer's scale rules out using off-the-shelf technologies. The company developed its own search function for @WalmartLabs, and it developed a mobile app for use inside its stores. Floor plans show the way to products, and the app can push messages out to customers as they shop.
A Wamart worker stocks produce.
OneOps provides platform-as-a-service capabilities, specifically automating and accelerating cloud management, application deployment, and monitoring datacenter applications. "OneOps technology will be key for our global platform, because it allows for easier deployment of code," Toporek said. "It's to make sure that Walmart has the scale it needs to operate around the world."
Tasty Labs specializes in developing online mobile and social applications for customer and user experience enhancement. Its co-founders have a distinguished Silicon Valley history. Joshua Schachter created the del.icio.us social bookmarking service, later acquired by Yahoo and renamed Delicious. Nick Nguyen is a veteran of Yahoo and Mozilla, and Paul Rademacher created HousingMaps. The @WalmartLabs blog explains:
While working on animated features like Shrek 2 at DreamWorks, Paul Rademacher created a little side project named HousingMaps, that combined Craigslist and Google Maps to plot rentals on a map. HousingMaps was a pioneer of the Ajax revolution and spawned the mash-up category that Douglas Crockford has called the most exciting development in modern web development. Both he and Nick are joining as full-time associates.
We've become fascinated in recent weeks with the way nontechnology companies are starting to morph into technology providers, usually for their internal use and to serve their customers but occasionally striking out as side businesses. This week, I wrote about how MGM Resorts is becoming an Internet service provider to make WiFi available to guests at its Las Vegas resorts, and how GE is using the Internet of Things to make its industrial equipment more reliable. My colleague Alison Diana summarized the work of several nontech companies going into the technology business, including the granddaddy of them all, Saber Airline Solutions, which was begun in partnership with American Airlines in 1953.
What are the special challenges that come up when technology users become technology providers? Let us know.
Walmart is in a unique situation in that they have so much data that they have to develop or acquire technology that helps them to operate more efficiently. I think it is a problem that other organizations will at some point realize that they have as they gain more data about almost everything in business.
Walmart has been a leader in technology when it comes to product and inventory tracking, but they could go a lot farther. I'm not sure if they are holding back because of privacy concerns or not, but they have the potential to become much more sophisticated in their operations.
There is so much more that bricks and mortar retail could do with technology in 3D to make them competitive with online shopping...an integration of both.
Take IKEA, where I shop quite a bit (and often just go to eat at the frugal cafeteria). Although their prices are cheap, I have to factor in many, many decisions especially if it involves large furnishings.
Basics: will it fit in my car? (KIA Spectra...I almost lopped a finger joint off, trying to load one of their book case modules into my small trunk...particleboard is not as light as you'd imagine!) But also, I like to use my cellphone in the store to take pictures of the product and the price tag. Yes, I know they have a mobile app, but often I want to take my own picture because it seems "realler" and have more camera angles and then I can come home and imagine whether it would fit or not.
So, you can do all kinds of in store simulating things to make the purchase more enticing. And of course, you always want to save the customer all the head-scratching (should I rent a pickup truck and carry it myself, or use the $99 service, or, ...).
These are questions that a computer should make much easier!
Hi Mr. Roques, You know very well big e-Commerce is becoming. Walmart in my view is positioning itself in a big way to be the leader in that space.
"The retail chain has been steadily adding social elements to Walmart.com. For example, earlier this month it added a web site feature that shows Walmart.com shoppers which products are trending on social networks. Walmart.com in 2012 averaged more than 2.1 million unique monthly visitors from social networks and those consumers generated nearly $75.7 million in sales over the course of the year, according to Internet Retailer estimates in the 2013 Social Media 300 Guide. The retailer has acquired about a half-dozen technology startups since founding @WalmartLabs in 2011 and is on track to reach $9 billion in global e-commerce sales this year, it says".
I like the Walmart's strategy of acquiring cloud start-ups and I view it more a strategy to acquire talented work-force than the actual technology. Start-ups are cheaper to acquire and also their work-force is enthusiastic and willing to gel into other organizations' cultures more easily.
The reliance that organizations like Walmarts have to place on cloud service-providers and other technology companies comes at a cost, at a risk of discontinuance of service and compromising on service quality that their vendors can provide at an acceptable price. Having in-house technology and staff means that you dont have to rely on vendors and can improve the quality of service as you want.
Does Walmart need anything else?! ... Well, they can surely get a few extra billions but more specifically, what are they looking to improve? Driving in more customer... Getting them to increase their revenue/customer...?
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