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Wal-Mart’s Social Media Push

At WWD's Digital Forum, Anand Rajaraman said @WalmartLabs wants to figure out how social media and mobile affect shopping.

Let’s face it: social networking has become too big for big business to ignore.

This story first appeared in the October 20, 2011 issue of WWD.  Subscribe Today.

“We are living in this world of data and the data is increasing at an exponential rate,” said Anand Rajaraman, senior vice president, Wal-Mart global e-commerce and head of @WalmartLabs. Rajaraman co-founded Kosmix, which Wal-Mart Stores Inc. acquired in April.

“All this data is not being created in corporate databases, most of it is being created in social networks — 200 million tweets a day and 1 billion Facebook shares a day,” he added. “A lot of it is out in the open, people sharing information about themselves on Facebook and Twitter. This gives you tons and tons of data.”

People are obviously spending more and more time on social media to generate that much data. The reason, said Rajaraman, is that “friends matter. Why is this important from a commerce point of view? Stores are downtown because that’s where the people are. If people are going to be spending their time on social media, that’s where the shopping is going to happen.”

Rajaraman said @WalmartLabs wants to figure out how social media and mobile affect shopping. “You can see the beginning of virtual commerce on Facebook,” he said. When it comes to shopping, there are two very different motivators. “Social media is about interest. A search is about intent.

“Past purchases are a weak predicator of future purchases,” Rajaraman said. “Future purchase intent is driven by interest.”

One reason for Wal-Mart’s interest in Kosmix is its Social Genome platform, which builds profiles of users, topics, products, places and events. The platform runs three distinct products: Tweetbeat, a social filter for live tweets; RightHealth, a database of health-related information, and Kosmix.com, which lets users explore information related to a topic with the addition of videos, photos and news links.

“We do analysis of what people are saying on Facebook and Twitter,” Rajaraman said. Social Genome will bring greater understanding about consumers and product, allowing Wal-Mart to take search, personalization, and recommendations to the next level, he said.

Wal-Mart is launching a gift recommender for holiday developed by @Walmart Labs. Called Shoppycat, it will be available on walmart.com. The way it works is that a friend recommends a book, for example, on Facebook and buys it as a gift for a second friend.

Another strategy @WalmartLabs is working on is the store of the community. It’s a concept Wal-Mart has been working on in the nonvirtual world for years, with varying degrees of success. For example, the retailer has tried to tailor products to local clientele, stocking up on Spanish foods and ingredients in Hispanic neighborhoods.