Walmart's Store No. 8 has created its third portfolio company with the acquisition of virtual reality platform and content studio Spatialand, the retail giant said in an email to Retail Dive. The company caught Walmart's eye at Store No. 8's Innov8: V-commerce summit over the summer, according to a company blog post.
Terms aren't being disclosed, a Walmart spokesperson told Retail Dive, although it's likely a smaller play than the company's acquisition of Modcloth, Bonobos and other startups. Spatialand itself seems to have gone dark: Its website on Tuesday offered up only a banner with a trademark and the tagline "powering immersive destinations."
The new venture will operate in stealth, led by Spatialand CEO and co-founder Kim Cooper and Store No. 8 Chief Product Officer Jeremy Welt, according to Katie Finnegan, Principal of Store No 8. "The team will develop and explore new products and uses of VR through immersive retail environments that can be incorporated by all facets of Walmart, online and offline," Finnegan said in a blog post.
This acquisition, unlike the majority of Walmart's most recent takeovers, is unlikely to move the needle on sales very much, at least not for several years. But that's not really the point, Finnegan suggested on Tuesday. "[It's too early to share more about what the team will be working on next … we're excited to get to work and share more in the future," she said. "[W]e will continue to evolve this technology and develop new product exploration through immersive retail environments."
Cooper is a two-time Emmy nominee, leading creative executive in design and entertainment and a pioneer of VR / AR / MR techniques in storytelling and technology, according to Finnegan. Under her leadership, Spatialand's VR platform created content destinations in projects with Oculus, Intel, Reebok and Linkin Park. She worked on films like Iron Man, Rogue One: A Star Wars Story and Prometheus, as well as on video game franchises like Destiny and Metal Gear Solid.
Welt, meanwhile, has spent the last three years "bringing virtual reality and the next generation of content into the mainstream," Finnegan said. He helped launch YouTube's first-ever commercial deal and worked on the Walt Disney Company's acquisition of Maker Studios. He's now a consultant working with companies like Splash and Mindshow in addition to Walmart.
But Walmart could be falling into a trap that, according to Forrester retail analyst Brendan Witcher, too many retailers are these days. "Retailers get too distracted and they chase the next shiny object, like virtual reality," he told Retail Dive in an interview. "They fail to understand that consumers are not that complex — they have basic needs. Target came out with this announcement last year, that they would stop working on robots and return to their core. That was the smartest thing they did. Retailers have to remember that at the core they still have to be good retailers."
Data outdoes flashy tech, Witcher insists, at least when it's used to meet customers' needs, and retailers tend to fundamentally misunderstand Amazon's key differentiator, which is creating an ecosystem designed to work for its customers.
"I don't have lunch with Jeff Bezos every week, but it wouldn't surprise anyone if he came in every Monday morning and the first thing he does is look at Prime's numbers," he said. Witcher does believe that Walmart has also finally taken steps to change its culture — but not necessarily through Store No. 8.
"They're finally doing what they needed to do. They brought Marc Lore in, and that's driving culture change," he said. "You have companies built around customer culture — Sephora, Starbucks — these are companies, we would agree, that are successful, and it's not by accident."