LAS VEGAS — Wal-Mart is creating a Silicon Valley-based retail startup incubator designed to nurture and accelerate to market cutting-edge technologies including virtual reality, drone delivery and personalized shopping.
Marc Lore, the president and CEO of Wal-Mart’s U.S. e-commerce unit, announced the incubator — dubbed Store No. 8 in honor of an early Wal-Mart location home to some of founder Sam Walton’s most ambitious experiments — during a keynote appearance here at the Shoptalk 2017 conference. Lore stated the incubator will help build “startups that have a responsibility to change the course of retail,” not just in the immediate future but five and 10 years down the road.
“The focus is not just on today,” Lore said. “Think bigger.”
Lore disclosed few other details about Store No. 8, but said it would announce the first business and CEO accepted into the program in the near future.
Startup incubators are becoming increasingly commonplace across the retail landscape. Wal-Mart rival Target in 2016 partnered with incubator Techstars for its Techstars Retail program, with a sequel now in the works. In February, Target also began accepting applications and nominations for a new accelerator dedicated to wellness-focused retail businesses. And earlier this month, the Retail Industry Leaders Association and professional services company Accenture teamed up to launch the (R)Tech Center for Innovation, an initiative that aims to bridge the gap between retailers and startups as well as provide guidance for how retailers can drive technology innovation.
The introduction of Store No. 8 underlines the cultural shift continuing to sweep across Wal-Mart in the months since the world’s largest retailer acquired the Lore-led e-commerce startup Jet for $3.3 billion in an effort to resuscitate its flagging e-commerce efforts. In the wake of the Jet deal, Wal-Mart has snapped up online shoe retailer ShoeBuy, outdoor apparel retailer Moosejaw and women’s apparel site Modcloth, emphasizing digital innovation and product differentiation in an attempt to capture the much-coveted millennial consumer demographic.
“What’s amazing to me is that everything Wal-Mart and [CEO] Doug McMillon said when they were contemplating buying [Jet] — about how they were going to allow Marc and team to have an influence over the broader strategy of the company — they’ve done,” Scott Friend, managing director at Bain Capital Ventures and an early Jet investor, told Retail Dive during a Shoptalk briefing. “That’s so unusual based on what I’ve seen in [mergers and acquisitions] in general, and retail M&A in particular. If any acquisition in this market has a fighting chance of being truly transformational for a big, legacy retailer, this one does. Marc and his team are so good, and if you give them a bigger playing field and more resources, I don’t think there’s anything the guy can’t do.”