Walmart is not messing around when it comes to playing eCommerce catch-up. And, as it turns out, the $3 billion acquisition of Jet.com was not even close to the grand finale of that effort. Nope, the great eTail reset is well underway.
As of yesterday (March 20), Walmart announced the formation of Store No. 8 — an internal effort at building their own online retail startups in house. That follows last week’s announcement that it will be buying up hip women’s clothing eCommerce line ModCloth.
The goal is what it is for many retailers and eTailers — keeping up with the Joneses over at Amazon.
A venture arm is not an unheard of way to play, of course — lots of large firms have them, and this one now emerging at Walmart will pair nicely with its extant research lab (@walmartlabs), which is presently focused on building better eCommerce for the world’s largest retailer by sales.
But Store No. 8 is the first incubator or investment arm of its kind at Walmart. It is named for a store that was built in a bottling plant during Walmart’s early days that Sam Walton reportedly used as his retail strategies lab. The goal of the investment firm version is to create relationships with entrepreneurs — particularly those working in AI and other emerging tech.
“We knew we needed to keep investing in the future of retail,” Seth Beal, one of the principals of Store No. 8, said in a recent interview. “We’re making sure that we make the right short-term decisions but don’t neglect the long term.”
Beal will work alongside Katie Finnegan, who led Jet’s corporate development and has a background in fundraising and mergers.
“When the mothership is ready, we’re sort of ahead of the eight ball,” Ms. Finnegan said. “Our goal is to have whatever we work on integrated into the mothership.”
Store No. 8, going forward,will be tasked with finding the cutting edge of technology that could be useful to Walmart’s total retail goals. Instead of merely investing in firms that meet that description, Walmart is looking to use its power and size to actually build new startups.
Along with incubating new ventures, Ms. Finnegan said, Store No. 8 will be able to draw on Walmart’s resources to support any startups that it launches.
“We’re giving these portfolio companies the best chance for success,” she said.
How much money will Walmart be investing through the new venture? That remains unknown at this time.