Digital A-List 2012

Ad Age Digital A-List: Walmart

Even a Behemoth Can Build a Responsive and Adaptable System, Though it Helps to Have a Cool Lab Full of Engineers in Silicon Valley

By Published on .

Integrating the speed and agility of social media and e-commerce into the lumbering hulk of the largest retailer on Earth is a monumental challenge. But Walmart Stores has made impressively quick moves toward remaking itself as a bricks-and-clicks powerhouse during the past nine months.

In April, Walmart purchased Twitter app developer Kosmix for $300 million and instantly refashioned it as Walmart Labs, its social and e-commerce research-and-development unit in Mountain View, Calif. Within months, Walmart Labs had added advertising network OneRiot and mobile app developer Small Society -- acquisitions aimed at grabbing talent -- and had managed to assemble a formidable presence in Silicon Valley.

A local Walmart aims to build social communities for 3,500 stores.
A local Walmart aims to build social communities for 3,500 stores.

Meanwhile, Walmart has overhauled its e-commerce unit in the San Francisco Bay Area and changed its connection to the mother ship.

Joel Anderson, based at corporate headquarters in Bentonville, Ark., took over as president of Walmart .com in the U.S.

With the unit reporting to Bentonville, store managers now get credit for online sales from their area, giving them new incentives to promote Walmart .com.

Former CBS Interactive CEO Neil Ashe was appointed president of Walmart 's global e-commerce unit in January; within about a month, it had bought a majority stake in Chinese e-tailer Yihaodian.

Amid all the revamps, Walmart has pumped out digital-marketing initiatives at a frenetic pace. They include the company's first iPad app, as well as an overhauled iPhone app that incorporates Siri, home barcode-scanning and automatic generation of shopping lists that integrate digital coupons.

The unit also launched its Shopycat app, which analyzes Facebook friends' "likes" and comments to develop gift suggestions; and "Get on the Shelf," a digital "American Idol" for prospective Walmart vendors to get their items in front of buyers.

The latter idea -- which came from an engineer at Walmart Labs -- illustrates how the giant's foray into Silicon Valley is reconfiguring not just its marketing but its business processes and culture, according to Anand Rajaraman, the company's senior VP-global e-commerce and the head of Walmart Labs.

"It's the idea that you can do some experiments and take some risks," Mr. Rajaraman said. "It's OK if some of these experiments fail, but you build on the successes."

If anything, Walmart Labs is looking to pick up the pace. Now with about 200 employees in the Valley, the unit continues to hire and scout for "interesting companies with interesting talent," Mr. Rajaraman said. Competing with Google, LinkedIn, Facebook and Zynga for hires, "we win more than our fair share of battles, because what we're doing is a very unique thing -- developing the next generation of shopping," he said.

Walmart is also ramping up digital efforts in Bentonville, including the ambitious My Local Walmart on Facebook. Launched in October, the program aims to create distinct social communities for more than 3,500 stores.

"When we asked what people wanted from Walmart on Facebook, they asked for information about their local stores -- from Rollbacks to how to find new products," said Wanda Young, senior director-digital strategy.

Signs have popped up at Walmart checkouts urging shoppers to like their local stores and join the social communities. Ms. Young said she hopes to see store managers get involved as the voices of their locations.

"This really goes back to the roots of what Walmart is about," Ms. Young said. "Sam Walton would go into stores and talk to customers and listen, and then go in and talk to associates and listen."

Comments on Walmart 's Facebook wall helped spur the decision to bring back layaway over the holidays, Mr.. Young said.

The feedback also increasingly informs other merchandising decisions.

"My team spends a lot of time working with our merchandising organization to share when we've done product posts, what was the commentary, the sentiment and how did it perform," Ms. Young said.

"We've actually had instances when feedback on a product led to a packaging change on-shelf because the manufacturer recognized that there was confusion, she said. "It's a day-in, day-out part of the marketing conversation."

Correction: A previous edition of the story listed the title of Joel Anderson, president of Walmart .com, incorrectly as CEO.
Most Popular