Source: Walmart
What Will Walmart Gain From Its Web3 Incubator Program?
Walmart’s Store No. 8 has announced the impending launch of a new tech incubator program focused on funding Web3-related initiatives. It is now accepting applications for the first cohort of its dCommerce Base Camp Accelerator program, which it is launching in conjunction with Web3 investor/accelerator Outlier Ventures, according to a press release.
The 12-week accelerator program, which will begin in mid-August, will fund and provide mentorship and subject matter expertise to chosen startups working in areas such as “decentralized infrastructure, data and growth solutions, immersive experiences and the metaverse, and the intersection of AI and blockchain technology.”
The website to apply for the program touts Web3 technologies or “dCommerce” as “the future of retail.” It points to Walmart’s “large customer base and strategic reach” as a perfect platform for developing revolutionary retail technologies.
Store No. 8, the tech incubation arm of the everyday low-priced retailer, is one of the fixtures introduced by Marc Lore during his tenure as CEO of U.S. e-commerce at Walmart. Walmart has had its share of technological successes and failures since Mr. Lore introduced (and in the form of Jet.com, brought with him) a slew of initiatives to boost and modernize Walmart’s tech positioning.
Walmart’s e-grocery capabilities made it popular throughout the novel coronavirus pandemic. Axios reported the findings of a Chicory study early in 2022, which said that one-third of customers chose Walmart for online grocery shopping, compared to 20 percent preferring Amazon.com and 10 percent picking Instacart and Target.
When Walmart wound down Jet.com in 2020, CEO Doug McMillon pointed to the initial acquisition as “jump-starting” the retailer’s progress on important offerings like curbside pickup and home delivery.
On the other hand, were initiatives like Jetblack. The AI-driven, text message-based personal shopping service from Store No. 8 was shuttered for good in February 2020. Walmart was reportedly losing $15,000 per member on the service when it was wound down.
Walmart this year also jettisoned the last of its Marc Lore-era brand acquisitions, Bonobos, selling the retailer (which it acquired in 2017) to WHP Global in a deal valued at $75 million. Walmart earlier sold off Millennial-focused brands Moosejaw and ModCloth.
Discussion Questions
DISCUSSION QUESTIONS: Do you think the dCommerce accelerator will lead to Web3 innovations that benefit Walmart down the line? Is Walmart ahead of its retail peers when it comes to focusing on tech-forward initiatives?
Poll
Loading …BrainTrust
I think the real point here is that Walmart keeps probing and exploring how tech-forward initiatives will push and shape the evolution of retail. And while this process may sound expensive, it also sounds like it is paying dividends. I for one am very grateful that Walmart is providing Amazon with some much needed competition on the tech/digital side of the business, because more and more it feels like Amazon is falling behind the curve on the physical side of retail.
There’s always new insights and innovations that come from these types of investments. Of course, failures will occur, but if the framework of the lab is designed correctly, which is to start SMALL, find quick wins and fail FAST, and then quickly pivot and learn from those mistakes, then typically, Walmart will see more positive outcomes vs losses. Store No. 8 is pretty progressive with its initiatives, and I’d say it’s 60-70% ahead of other retailers.
What struck me was the comment that dCommerce is the future of retail. Consider what it delivers:
-Effective content marketing through personalized content
-Well-optimized product content, images, and other assets
-Creates efficient marketing strategies, promotional campaigns, and social media engagement by providing accurate data/content in time
-Perfect data Analytics
-Seamless customer service
-Effective supply chain management
How will any retailer, other than the biggest, with the most resources be able to compete?
Gene,
I’m perhaps overly fond of using the example of my Great Great-Grandfather who operated a general store in rural Northern Georgia. He basically got paid once a year [when local farmers took their crops to market].
For the majority of the balance of the year, his customers (quite literally) lived on credit. He had to have perfect customer knowledge since his family’s survival depended to a greater or lesser degree on making enough right “bets” on people, their expertise, their work ethic, local market conditions, and even the weather. He knew exactly who his customers were, exactly what they wanted, and exactly when they needed it, and obviously provided exceptional customer service. That was all over a century and a half ago and he did it without electricity.
My point is that technology can achieve wonders at retail but … at least today … it also needs to be guided by folks who understand the human side of retailing. If that’s right, Walmart’s dCommerce accelerator ought to be a great success.
It can be difficult for larger retailers to innovate and be at the cutting edge of every new idea. Internal functions often see constrains and problems and are consumed by day-to-day work rather than making time for blue-sky thinking. Initiatives like BaseCamp essentially bring in external thinking and allow Walmart to identify early-stage ideas that may transform or aid its business. Some things won’t take off, others might. The patchwork of success and failure is necessary to move forward.
Walmart can afford this incubator work. But that doesn’t mean it’s the best way forward to the future. We need to hope that the vast majority of Walmart focus is NOT on tech, but on the far more complex challenge of keeping their store environment fresh and effective.
I think we need to know more about the vetting or gatekeeping function before we can answer this question. For example, are these concepts which have received previous rounds of funding or just ideas that sound interesting? In my experience accelerators and/or incubators are really only as good or bad as their new product evaluation processes. And, the whole point of accelerators is to give new ideas enough support to determine whether or not they are commercially viable. One more thing to remember is that an accelerator only needs one, two, or three mega-successes to justify their budgets. Not every new idea is good and not every good idea is commercially viable, so the cost of innovation is always calculated in the sum total of successes minus the cost of failures. As to whether Walmart is ahead of its retail peers, the answer clearly is a qualified yes. To paraphrase Bill Gates, retailing is likely to change less in one year than people think and more in ten years than they can imagine. The view of the future is always best from the front of the line.
.. the ten years is certainly beyond our imagination.
Web3 Incubator Program is seeking startups focusing on the metaverse, decentralized infrastructure, data and growth solutions, the intersection of AI and blockchain technology. Selected startups will have the opportunity to learn from mentors about creating their product roadmap, building community, understanding the token economy, pitching, fundraising, and governance. Accelerator is an effective way for Walmart to sample new and emerging technology and see the new technology in action, this eventually should help Walmart down the line.
The company does have a long-term view, early mover advantage and working towards joining the list of companies such as Amazon, Google and Apple, that are know for having entrepreneurial approach woven in their corporate culture.
This sounds like a variation on the theme of Corporate VC investments. An interesting idea that will benefit WM depending on how effectively it is run and which firms get chosen to participate. Good luck to them!
Walmart has done really well in the last five years or so, with significant adoption of technology that has digitally enabled its retail operations. When it comes to technology, in no way Walmart is inferior to Amazon. The fact that Walmart has closed or sold off a couple of its businesses is something that might happen to any retailer. It comes with the challenges of running a Walmart-sized retail operation. Consequently, some initiatives are bound to succeed while others may no longer align with the company’s long-term goals.
Walmart’s Store No. 8 incubator program will undoubtedly benefit society in the long term, along with the money that will be invested in fostering the startup ecosystem. Walmart may eventually integrate technologies developed in the incubator program, so they have nothing to lose here. The key in these programs is to look at things in hindsight because assessing any progress at this stage would be too short-sighted.
I commend Walmart’s efforts on continuing to break new ground in pushing to find new technologies to push the category forward. These kinds of innovations can have a lasting impact on the retail category. I think the accelerator is a great way for a large retailer like Walmart to fund and trial emerging technologies.