iStock.com/Michael Vi
Walmart has revealed plans to close Store No. 8, its internal startup incubator that launched in 2017 to help catch up to Amazon’s online business. The closure is seen as a way to reduce costs while enabling innovation to shift to local teams.
Store No. 8, launched just after the Jet.com acquisition, was designed to test innovations over three-to-five-year cycles via partnerships while also serving as a tool to recruit tech talent. The name refers to an early Walmart location in Arkansas where co-founder Sam Walton tried out new concepts.
Some ideas incubated inside Store No. 8 have been widely adopted, including online delivery into shoppers’ homes and shopping via text message, while others, such as the Jetblack text message-based personal shopping service, were scrapped.
Overall, the unit focused on the following areas: health and wellness; social commerce and the producer economy; sustainability and circular economy; customer experience and loyalty; the metaverse; and decentralized commerce.
Supported by Store No. 8-related investments in curbside pickup and delivery, online sales in the Walmart U.S. division reached $53.4 billion in 2023 from $15.7 billion in 2019, according to Statista.
In an internal memo detailing Store No. 8’s closure attained last week by the Wall Street Journal, however, Walmart CFO John David Rainey said the retailer had “graduated capabilities from this operating approach that are now fully embedded in our organization.”
He added that nearly 300 Store No. 8 workers have moved to other internal jobs. Rainey stated, “The responsibility to shape the future of retail is now shared by all segments.”
Walmart said in a media statement, “When we stood up Store No8, it was the right decision at that time. Since that time, we’ve stood up Global Technology, Product and Design organizations that work alongside the business to innovate with speed — and the responsibility to shape the future of retail is now shared across the company.”
Scott Eckert, who led the unit, will leave the company.
Walmart said in 2022 that it planned to expand its global tech team by more than 5,000 employees that year, and today it continues to aggressively invest in tech, including announcing this month a GenAI-related partnership with Microsoft. However, Walmart last year closed three tech hubs in Austin, Texas, Carlsbad, California, and Portland, Oregon, and recently indicated it planned to focus on reducing expenses amid cautious consumer spending.