Retail has been evolving fast during the last few years, bolstered by increased competition, tech advances and shifting customer trends - and the 2020 lockdowns put it all into hyperdrive. Forward-thinking retailers across almost every industry have adapted and responded quickly, many with their own innovation labs and venture arms. Like Walmart’s Store N°8.
Store N°8 is Walmart’s very own incubation arm, built with the mission to “shape the future of retail”. The idea is to harness Walmart’s vast corporate assets to build startups that can:
- Fuel the core business
- Increase operational efficiency
- Create next-level experiences that keep customers coming back
Each new venture brings the potential to increase revenues, differentiate Walmart from the competition and provide services that would otherwise have to be purchased from a third-party provider.
Walmart isn’t the only retailer making strides in the area of innovation. Competitors like Amazon, Target, and Lowe’s are also investing heavily in taking their customer experiences, digital capabilities and services to the next level. With popular exploration areas that include robotics, extended reality (XR), AI and fintech, the future of retail is sure to bring many exciting, new customer experiences in the years to come.
Let’s take a closer look at how Store N°8 is helping Walmart fuel innovation from within through its accelerated incubation model. But first, here’s a little background information on Walmart.
Headquartered in Arkansas, USA and founded in 1962, Walmart is one of the world’s leading retailers, with a vast chain of superstores, discount department stores and grocery stores. Operations are divided into four main divisions:
- Walmart U.S.- with 4.743 retail units
- Walmart International - with 5.184 retail units
- Sam's Club - with 599 retail units
- Walmart U.S. eCommerce - which focuses on shopping online
With a 2020 revenue of $559 B, Walmart is the world’s largest retailer. They’re also one of the world’s largest private employers with over 2,3 million associates, 1,6 m of which are located in the U.S. alone.
Having dominated retail in the brick and mortar terms for years now, Walmart is currently making huge strides to advance its digital transformation. Its goal? To re-invent and elevate the shopping experience for its customers.
To accomplish this, Walmart has set up two separate initiatives:
- Walmart Global Tech - working on human-led, tech-empowered innovations.
- Store N°8 - a corporate incubator with the freedom to test, learn, and iterate new ideas.
Meet Store N°8
Lead by SVP of Next Generation Retail, Scott Eckert, Store N°8. is Walmart’s very own incubation arm, built with the mission to “shape the future of retail”. To accomplish this goal, they use an “accelerated incubation” model facilitated by Walmart’s considerable knowledge, assets and resources. The approach involves testing and validating disruptive ideas, pivoting quickly and embedding the insights learned into Walmarts DNA quickly.
Store N°8. is part of a greater innovation strategy taking place within Walmart. While other initiatives focus on short term gains and profitability, Store N°8 looks further into the future, developing the technologies that will dominate the industry in the years to come. As explained by former Principal of Store No. 8, Lori Flees:
“There’s so much innovation happening in (Walmart’s) supply chain, in-store operations and in eCommerce. Their focus is over the next one to two years but we’re looking beyond that to three to five years out. If you don’t fund that kind of innovation early you’re left behind.”
Many of the initiatives at Store N°8 explore areas like:
- Conversational commerce
- Frictionless checkout
- Perpetual inventory
- Shopping automation
- Health and wellness
All with the goal of enhancing the customer journey both in stores or online. Some of Store N°8’s most notable ventures include:
- Aspectiva - Uses product reviews to help customers make informed decisions.
- InHome - A secure, unlimited and fee-free grocery delivery service.
- Intelligent Retail Lab (IRL) - Tests AI services and experiences inside Walmart.
How Store N°8 works
As described on the incubator website, Store No. 8 develops promising new ventures from scratch using:
Walmart can test new ideas quickly by combining a startup’s speed, freedom, and flexibility with its own considerable corporate assets. This enables them to scrap the initiatives that fail and improve the ones that work until they’re ready to scale.
Although Store No. 8 operates as an independent LLC, the ventures it incubates are owned by Walmart. Performance is measured by the “operational and strategic returns” each venture can bring to Walmart. In other words, the focus is on how effectively the initiative helps enhance Walmart’s customer experiences, not on profitability.
What makes Store N°8 successful?
These are just a few of the factors that contribute to the success of Store N°8:
Corporate assets galore
The Store N°8 website describes Walmart as “retail’s largest stage”, where successful ventures are allowed to “go live”. With locations, partners, employees and customers all over the world and years of industry experience, the description is quite accurate. The environment is perfect for testing new ventures, getting customer feedback and scaling them when the time is right.
Accelerated Incubation model
The team at Store N°8 knows the value of speed when it comes to innovation and building new ventures. By leveraging Walmart’s size and innovative ecosystem, they’re able to test new concepts fast and make the necessary iterations to ensure their success.
Freedom to make quick decisions
As previously mentioned, Store No. 8 operates as an independent entity from its parent company Walmart. This enables them to make quick decisions, free of everyday corporate regulations, bureaucracy and delays.
A focus on innovation, not profits
The ventures incubated at Store No. 8 are measured by their potential to fuel the core business, streamline operations and heighten the overall customer journey. It’s building the solutions that will ensure Walmart’s position as a retail leader for the next 10 years and beyond. By focusing on these larger goals, instead of short-term profits, Store No. 8 is able to develop ideas with truly disruptive potential.
What’s next for Store N°8?
It’s been almost four years since Store N°8 launched back in 2017, and it’s still going strong on its mission to incubate startups with the potential to change commerce as we know it today.
Plans for the future include a foray deeper into the world of digital healthcare, as announced in a recent blog post titled “Building a Healthier Tomorrow”. Dr. Pravene Nath has joined the Store N°8 team to help accomplish this goal. He’ll be leading a new stealth portfolio company to help Walmart customers “save money so that they can live better – and healthier”. In his own words:
“I am excited to build a portfolio company with new capabilities within Store No. 8 to further support this effort, working closely with our Walmart colleagues. To move at the speed of a startup, with the backing of a company with locations within 10 miles of 90% of people living in America, creates incredible opportunities to affect the health of our communities.”
As an emergency physician with almost twenty years of experience in the digitisation of healthcare, Dr. Nath is sure to energise the new portfolio with his ideas and industry know-how.
Another area of interest for Store N°8 is computer vision technology, which is already in use throughout Walmart. In a recent interview, Principal of Store N°8, Scott Eckert discussed plans to combine the technology with XR and AI to create new solutions in areas like facial recognition and inventory visibility.
With exciting projects like these in the works, there’s no denying Store N°8’s potential to actually shape the future of retail, and we can’t wait to see what they come up with next.
Are you looking for new and effective ways to future-proof your business and create new revenue streams? We can help you build a corporate venturing arm that fuels innovation from within by delivering a steady pipeline of profitable new ventures.