Inside WalmartLabs: How the Former Kosmix Team Plans to Help the World’s Largest Retailer Get Social and Mobile

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pioneer in that space. Perhaps the one place where they didn’t innovate as fast as other companies was e-commerce where they clearly were not the leaders. But it would be wrong to say they do not innovate.

X: What was your company culture like at Kosmix, and how do you think you will fit within Walmart? What place will you have?

AR: My belief is that one of the best environments for innovation is graduate school. So that is the culture we have at Walmart Labs—it’s freewheeling and somewhat informal, with people yelling at each other, coming up with ideas all the time, having hallway discussions.

Within Walmart, it’s not like we will be the only people coming up with ideas. Walmart has 2.2 million associates, and there are many bright, talented, and committed people that I have had the pleasure of meeting, and they all have many ideas. But we can at least be a way to channel those ideas and bring some of them to reality. We are a place where if somebody has a great idea, they can come tell us.

X: Are there things you feel you can do to improve the way Walmart functions as a business?

AR: We talked about [using the social genome and semantic analysis for] building traffic at Walmart.com. Another kind of project we are doing will explain to you some of the scope of WalmartLabs. If you take any specific Walmart store, it lives in a community, and each one is different, and therefore the assortment of products at that store should reflect the needs of that community. So far, it has been a lot of guesswork to make the assortment reflect the community. But one of the things we can do is use semantic analysis to analyze the area around the store and find out what people’s interests are, and use that to influence the store. Image the impact of that across 9,000 stories with a billion visitors every month.

One of the [other] possibilities is to figure out if there is a new venue for e-commerce outside of Walmart.com. At the end of the day, retail is all about location. People put stores in downtown areas for a good reason. Where are people online these days? They are on Facebook. So stay tuned.

X: I wrote about Shopkick recently—they have a technology for detecting whether customers are inside a bricks-and-mortar store and delivering digital reward points to their smartphones. Can you imagine bringing that kind of mobile interactivity into Walmart?

AR: Absolutely. When somebody walks into a store with their mobile, how can we inform them about things that are relevant to them? We have a Walmart mobile app already, and you could imagine simply connecting that with their Facebook account or their Twitter handle and effectively checking them into the store. It could be anything.

At a high level, we are asking what are the best and most innovative ways of connecting customers with products. Can we improve product search using social signals? Can we improve product recommendations? It’s been just two months [since the acquisition] and it takes longer than two months to launch something new. But we are making rapid progress, and I’m sure we’ll be talking very soon about some of the new things that we are working on. We’ll have something interesting for the holidays.

X: This may be my own chauvinism, but I don’t think of people who shop at Walmart as the most technology-savvy consumers. Are they really an interesting test audience for the social and mobile technologies you’re talking about?

AR: I had the same thought at first. But if you look at smartphone ownership, Walmart trends roughly with the U.S. population. The same fraction of Walmart shoppers have smartphones as the U.S. population in general. Also, roughly the same number of Walmart shoppers have Facebook accounts as in the U.S. population. So in some sense, it’s the ideal test audience. If owning a smartphone or having a Facebook account were limited to early adopters in Silicon Valley, then Walmart shoppers would not be the right demographic—but these things are mainstream now.

Wade Roush is Chief Correspondent and Editor At Large at Xconomy. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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