‘Walmart’s closing its tech incubation hub – and that might be a good sign’

After the travails that retail has been through to adapt to seismic changes that, in industry terms, have sometimes been as powerful as the asteroid that wiped out the dinosaurs, it at first seems odd that Walmart looks to be scaling back its experimentation.

That might be the conclusion some draw from Walmart’s decision to close Store No. 8, named after the branch of the chain in which founder Sam Walton often tried out new ideas.

After all, Store No. 8 described its mission as fostering start-ups “to help leapfrog where the customer and market will go, well into the future”.

Its website maintained: “These self-contained companies benefit from the best of both worlds – they operate at the speed of a start-up along with access to tremendous enterprise scale – with a goal to enrich the lives of Walmart customers and associates.”

Store No. 8 has played a part in some of Walmart’s most high-profile tech-enabled initiatives, such as the InHome delivery service and “conversational commerce”.

Not everything has worked, including an original iteration of the latter, but Walmart seemed happy to ‘fail fast’ in such cases as long as it was learning.

AI-powered ambition

In many ways that was the point. Walmart recognised it needed to better understand the possibilities of new technology and the ways of thinking that have often characterised start-ups.

That’s why, in 2016, it splashed out $3.3bn to buy Jet.com and the expertise of its founder Marc Lore.

Jet staff were among those to help launch Store No. 8, though Jet.com itself was wound down four years ago.

Walmart said the closure of Store No. 8, first reported by The Wall Street Journal – doesn’t mean it’s scaling back its innovation ambitions. The retailer said: “Store No. 8 was an important early step forward into tech-powered customer solutions, which led to innovations that have transformed how customers shop at Walmart.

“When we stood up Store No. 8, it was the right decision at that time. Since that time, we’ve stood up global technology, product and design organisations that work alongside the business to innovate with speed – and the responsibility to shape the future of retail is now shared across the company.”

That final point is surely the most salient. Even in the few years since the Jet.com deal and the creation of Store No. 8, technology has developed apace.

“Maybe the closure of an innovation hub will be a good thing, a sign of the retail industry’s confidence that it now has expertise and capabilities absent in the past”

It’s at the heart of life as never before – consumers, as well as companies, are experimenting with services such as ChatGPT. It’s no longer the preserve of a single team, group of people, or department. In fact, it’s a bad thing for the responsibility for technological innovation to be sequestered away from the core business, rather than permeating through it.

Earlier this month, at the CES tech trade show in Las Vegas, Walmart chief executive Doug McMillon outlined its ambitions and some of the initiatives underway, from generative AI-powered search to AI and computer vision technology that allows Sam’s Club customers to get out of the store faster without the need for the receipt verification that often holds them up.

Interestingly, Walmart is also focusing on tech for staff. Its Gen-AI MyAssistant tool allows colleagues to devote less time to tedious tasks and “spend more time on the things that matter” – a productivity gift as retailers seek to keep a lid on costs while also keeping prices down for customers.

Maybe the closure of an innovation hub will prove to be a good thing, a sign of the retail industry’s confidence that it now has the expertise and capabilities that were absent in the past.

Walmart’s future use of technology will be fascinating to follow, to see the extent to which retailers might harness its power and truly integrate its talent – that’s the challenge the retail giant has set itself.