Wal-Mart Stores Inc. wants to sharpen its digital game through acquisition.
This story first appeared in the July 30, 2014 issue of WWD. Subscribe Today.
The retailer, which has become one of the most voracious dealmakers in tech, said Tuesday that it would buy social marketplace Luvocracy through its @WalmartLabs research and development arm.
The deal marks the unit’s 14th acquisition and another signal that the world’s largest retailer plans to use all the tools at its disposal to boost its market share. Already about 245 million customers visit Wal-Mart’s 10,900 stores and its 10 Web sites each week.
The Luvocracy purchase and the expertise it brings on board could be particularly useful for Wal-Mart as it tries to help that army of shoppers navigate its vast product offerings. Luvocracy specializes in connecting users with like-minded shoppers and helping them sift through a large number of products and find what they want.
“Luvocracy was one of the first companies to enable the entire social shopping experience — from discovery to commerce — to occur within the four walls of its app,” said Ben Galbraith, vice president of global products for @WalmartLabs.
A spokesperson for Wal-Mart said Luvocracy’s technology won’t be integrated into walmart.com, but the team behind the startup will “enable us to innovate in design, product and discovery shopping.”
Luvocracy was founded in 2011 by Nathan Stoll and Roger Barnett and raised $11 million in funding last year from Kleiner Perkins Caufield & Byers, Google Ventures, Marissa Mayer and others. The online shopping community’s 16 employees will join Wal-Mart’s team.
Pinterest has dominated the social discovery category since it came onto the scene in 2009 — it has over $762 million in funding under its belt — but social commerce is still up for grabs. Earlier this month, Facebook said it was homing in on its commerce efforts, testing a “buy” button.
Although experts are skeptical whether the social network will ever build a meaningful retail business, Facebook is just one of the many tech companies looking to build a toehold in Wal-Mart’s back yard. Wal-Mart, in turn, has been extremely busy in tech. Just last month, the company bought Stylr, a fashion app that helps users search for apparel in nearby stores. Like Luvocracy, that deal brought on key talent and seems aimed at perfecting tools to help consumers find what they want.
All these deals come against a background of some serious changes at Wal-Mart.
Doug McMillon took the helm as president and chief executive officer this year and last week named Greg Foran ceo of the U.S. division.
Tackling the online space is key to the company’s future. In addition to focusing on e-commerce and mobile strategies, Wal-Mart’s purchase of startups like Luvocracy signals that the retailer wants to transform into a formidable online powerhouse. Using the technologies it’s acquired — from predictive intelligence platform Inkiru to e-receipts solution Grabble — it looks like Wal-Mart’s readying for more of a battle with the likes of Amazon and eBay.
Wal-Mart’s global e-commerce department — comprised of walmart.com and @WalmartLabs — has about 2,500 employees that work out of headquarters in San Bruno and Sunnyvale, Calif.
“There are some teams with hard-core engineers who focus on how we can scale up our search engine to handle all of the queries to our Web site. They’re obsessed with understanding the customer and the industry,” Galbraith said in an interview earlier this year, calling @WalmartLabs an “Internet company within a retail company.”