Walmart Labs: Are They Making Walmart More Innovative?

WALMART LABS
The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out. Smart thinker was Dee Hock. Are you aware of Walmart Labs?
WALMART LABS
Is WALMART LABS having an impact?
Have you read anything on them recently? Through the innovative fusion of retail, social and mobile, @WalmartLabs (a division of Wal-Mart) is redefining Commerce for the largest retailer worldwide. The group is comprised of technologists and e-commerce business types, all with the goal to help customers save money and live better. And, oh, by the way, wants to make Walmart more innovative.
Check out our thoughts on building innovation.
More examples: Amazon and Managing Innovation … the Jeff Bezos Vision
And of course, the group’s effort is targeting better competition with Amazon in the e-commerce market sector. You could also say the lab’s mission was to make the company more nimble and more creative … i.e. fix the innovator’s dilemma within the company.
This strategy is a clear signal of Walmart’s serious intent to compete in digital e-commerce–and blunt the looming threat of Amazon. Having marginalized Barnes & Noble and Best Buy, Jeff Bezos has his eyes on a bigger target. Amazon has been moving aggressively to sell Walmart staples such as diapers, soap, pet food, and cereal, even letting customers subscribe for items they want to receive regularly.
Walmart is the world’s biggest grocer, and a central part of its strategy is that the millions of folks who visit its stores weekly to buy food will purchase a lot of other stuff. That’s a key reason Walmart’s 2011 revenue of $419 billion dwarfed Amazon’s 2011 sales of $48 billion.
In e-commerce, however, Walmart is a distant challenger. The company has never broken out its Internet revenue, though, in 2011, the analyst Internet Retailer-estimated it to be $4.9 billion. In October, Walmart projected that global e-commerce would be $9 billion in the year ahead. Meanwhile, Amazon has been on a tear, with sales rocketing toward $100 billion annually in 2015, and eating into Walmart’s sales of books, music, DVDs, electronics, and even toys.
It would be an oversimplification to attribute Walmart’s digital revival solely to a hungry competitor. The better answer is that they need to improve in the digital world because that’s where its customers are headed. Soon everyone’s phone will be smart enough for easy shopping. With Internet-enabled tablets selling for well under $200, lower-income families, which are Walmart’s bread and butter are already turning into online customers.
So how is Walmart Labs doing in improving Walmart’s place in the digital world, you ask?
After struggling for quite some time, it appears they are beginning to build some momentum.  They are churning out ideas fast and furious.  Some will work, and some will not … but they are exploring, experimenting, and adapting to the new world.
One of the first projects originating from the labs was Shopycat, a gift-recommendation app that Walmart.com launched on Facebook before the 2011 holidays. Shopycat scans your friends’ profiles to identify interesting gift ideas from their stream of likes, comments, and status updates.  Shopycat then seeks out an appropriate gift from Wal-Mart’s product database. For the 2012 holidays, the team built Shopycat into a section of Walmart.com called Walmart Gifts; customers will log in with their Facebook or Twitter account to get personalized recommendations.
Another of their more interesting ideas is Get On The Shelf.  Walmart held a competition and invited all comers to post their product ideas for consideration.  The winners get the privilege of having Walmart shelf space dedicated to their products.  They have always been an excellent company at collaborating with their suppliers. This idea just expands that collaboration a bit. I believe this an excellent idea for several reasons:
  • They are following their customers lead, as more and more customers are becoming part of the digital world

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  • It is an excellent way to crowdsource. If companies aren’t motivated by the prize to get dedicated Walmart shelf space, they never will be.
  • They are organized to be small so they can execute idea implementation like a startup.
  • They are experimenting and testing many new ideas without worrying about failures.
“If you don’t go, where you don’t go; you won’t know, what you don’t know.”
  
 In other words, Walmart needs to look for innovation in the places they never look.
 
The more I have repeated that bit of insight, the more profound it has become.  We are all creatures of habit. So are larger organizations like Walmart.  Doing things the way we’ve always done them is comfortable, familiar and easy.  It’s human nature to choose these “easy ways.”
How about you? Do you drive to work the same way every day?  Probably!  Do you read the same publications—or the same type of publications?  Sure!  How about TV and the Internet?  Watching the same group of shows or using the same set of websites is also a common habit.  When you do this, what do you get?  You get a lot of familiar and comfortable feel.
But true innovation like what Walmart Labs is all about will not make them comfortable.  It will make them uncomfortable.  And yet, it is in that discomfort that the new ways, the new ideas, and the new feelings come to light.
When you drive to work via a different route, you see different places and sights.  If you go to the newsstand and peruse the magazines that you never otherwise look at, you will see things you simply would never think about otherwise. That is what Walmart is doing and in the long term, they will be better for it.
Regardless of how one might feel about Walmart as a company, we are very encouraged to see a company of this size taking on the challenges of competing in a more nimble fashion.  If they are able to consistently execute on solid ideas within the Labs context, they will be a model of business adaptation and change.
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Mike Schoultz is the founder of Digital Spark Marketing, a digital marketing and customer service agency. With 40 years of business experience, he blogs on topics that relate to improving the performance of a business. Find him on G+Twitter, and LinkedIn.  
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More reading on creativity and innovation from Digital Spark Marketing’s Library:
Learn How to Think What No One Else Thinks
Generating Ideas by Convergent Thinking
The Secrets to Building an Innovative Culture
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