If not for its deep-pocketed parent, Store No. 8 might go unnoticed or get lumped together with the hundreds or thousands of other tech incubators. But Store No. 8 is backed by Wal-Mart Stores Inc., so the stand-alone entity based in Silicon Valley is sure to get a lot of attention.
Some of that attention will be deserved if Store No. 8 accomplishes half of what it says it will. Store No. 8 is designed to incubate, invest in and partner with entrepreneurs, early-stage start-ups, venture capitalists and academics to innovate in areas such as robotics, virtual and augmented reality, machine learning and artificial intelligence. These start-ups within Store No. 8 will be “ring-fenced from the broader [Wal-Mart] organization, so they have the room to grow and develop,” the retailer said.
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Store No. 8, described as an innovation hub formed by the world’s largest retailer, was revealed by Marc Lore, president and chief executive officer of Wal-Mart global e-commerce, on Monday at Shoptalk’s conference in Las Vegas.
The Store No. 8 web site can sound lofty. For example, “We have created an innovation ecosystem where new ideas can thrive outside the existing definitions of retail. We have a unique vantage point that allows us a view into the heart of America to connect with what people want. The ideas we develop here are our big bets that have potential to change the world.”
It’s easy to see how Store No. 8 fits into Wal-Mart’s strategy. Executing at scale is one of the retailer’s strong suits. Wal-Mart, which has been amassing a portfolio of upscale e-commerce sites facilitated by its $3.3 billion Jet.com acquisition in August, also wants to learn how to optimize the customer experience in stores and online.
The retailer has a road map for its online business that is helping guide the innovations it will bring to market at scale for the next 18 months. Store No. 8 has a much longer outlook. It’s not looking into innovations and incubation opportunities for technologies that will be deployed next quarter or next year. Rather, Store No. 8 has a three- to seven-year horizon, which will allow it to explore technology that’s nascent today, but “may fundamentally change the way we do e-commerce,” the company said.
Wal-Mart noted that it’s difficult to run an operation of its size and scale, remain focused on all of the necessary elements of execution while at the same time be on the lookout for and invest in and incubate in a meaningful way the next generation of technologies.
Store No. 8 is being led by veteran retail entrepreneurs G. Seth Beal and Katie Finnegan, who are building a team “with the expertise to bring radical innovations to the physical, digital and virtual retail experiences, acting as a force driving commerce forward at a time when emerging technologies influence all aspects of consumers’ lives,” the company said.
Beal is senior vice president, incubation and strategic partnerships for Wal-Mart U.S. e-commerce, which includes his role as principal for Store No. 8. Finnegan held merchandising positions at J. Crew and worked at Jet.com.
Other technology that could come out of Store No. 8 includes innovations in last-mile delivery, including drones and autonomous vehicles, and intense personalization.