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Walmart Launches Goodies Co. Social-Powered Subscription Service

Despite Losing Founders, @WalmartLabs Maintains Rapid Rollout Pace

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Walmart's Silicon Valley social- and e-commerce-innovation hub may have lost two high-profile leaders this summer, but it continues to crank out projects as it prepares full-scale rollout of a food-subscription service and a broader application of its Shopycat gift-recommendation engine.

The @WalmartLabs unit today is broadly launching Goodies Co., a $7-a-month box of gourmet, organic, ethnic and specialty snacks hand-selected by its own employees after a beta test with 3,000 users that started in June. Subscribers who are active enough in rating, reviewing and touting the products can get Goodies boxes for free. Later this month, @WalmartLabs plans a wider rollout of last year's experimental Shopycat gift-recommendation Facebook app, to be promoted on Walmart.com as "Walmart Gifts." Facebook users who download the app can use it to mine data on friends' likes and posts to generate gift recommendations from Walmart.com or elsewhere.

Those moves follow the launch this summer of Classrooms by Walmart, which has enlisted 100,000 teachers to post their school-supply and donation wish lists on Walmart.com and lets parents make the purchases for delivery to their homes or to local stores in one click. Also this summer, @WalmartLabs rolled out Polaris, a new search technology for Walmart.com that , like Shopycat, is based on the "Social Genome" technology acquired in 2011 as part of Walmart's $300 million acquisition of social-media startup Kosmix. Polaris ranks search results in part based on such things as reviews from Walmart.com, likes on Facebook and pins on Pinterest.

Though the Social Genome remains, Kosmix's founders and former @WalmartLabs leaders Venky Harinarayan and Anand Rajaraman left in June to take time off before to-be-announced future endeavors. "We've not seen any impact, but we certainly miss them," said Ravi Raj, @WalmartLabs VP-products. "We've been pretty busy with our launches, swamped with our product development. We believe the founders seeded the company with talented people who went on to hire more talented people."

Goodies Co., the latest @WalmartLabs offering, provides six gourmet products per month in themed boxes. The $7 monthly fee includes taxes, shipping and handling. The October "Trick or Treat" box included Dang Toasted Coconut Chips, a Nutella & Go snack pack, Smartfood Selects cinnamon sugar chips, Juicefruits snacks, Myesa non-dairy cocoa drink and Brownie Brittle snack crisps. The retail value of the food alone is around $15 per box, Mr. Raj said.

Subscribers also will be enrolled in a rewards program that allows them to earn points for reviews, likes and posting pictures. "If you're active in the site, participating in the community features, the box will eventually be free for you," Mr. Raj said. Indeed, Goodies comes close to applying the internet's favorite price -- free -- to something as tangible as food. That raises the question of whether it's a loss leader to develop a platform Walmart can use someday for other purposes. On that score, Mr. Raj had no future plans to announce.

"Certainly the value is tremendous," he said. "But our focus right now is just on the customer experience. If we continue to delight you each month with new products, we think you will be loyal." The social aspect of the customer reviews for products "could be hugely valuable in the ecosystem," Mr. Raj said. For one thing, Goodies plans to lean heavily on social-media marketing to spread the word, he said, though it will also do some digital and search advertising.

Ultimately, he expects brands whose products are carried in the box may provide coupons or other offers. And he believes the social feedback received on items in the boxes will help inform assortment decisions at Walmart.com and Walmart. "The reviews are great feedback" for suppliers, Mr. Raj said. "They get free market research by participating."

Then again, at this point suppliers are providing the food for free. "At the moment," Mr. Raj said, Walmart isn't charging for including products in Goodies boxes, either. But Walmart has enough suppliers lined up to provide free stuff for Goodies boxes that it can afford to be selective, as the foodies on the @WalmartLabs team in San Bruno, Calif., taste and vote on everything offered up before items make it to the box.

It's "an opportunity and an ROI I feel is priceless," said Heather Howell, CEO of Rooibee Red Tea of Louisville, Ky.,a ready-to-drink Rooibus tea included in the September Goodies box. Her brand netted about 150 new Facebook fans out of the 3,000 users in the beta test , she said, and the Goodies box and website gave her a chance to tell a more in-depth story than other advertising vehicles. "It gave us a focus group of sorts," she said, adding she was very pleased with the feedback and already has started to incorporate some of the Goodies' customer suggestions.

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