Skip navigation

Wal-Mart Lends an Ear to the Online Conversation

Michael Duke, Wal-Mart's chief executive officer, recounted last week how much he enjoys dropping into the company's stores unannounced, visiting with both employees and shoppers.

But with close to 5,000 locations in the U.S. and Canada alone, and millions of shoppers making transactions every week, it is increasingly difficult for the company's top brass to get up close and personal with their store-level operations.

That doesn't mean the company can't listen in on what its shoppers are saying, however. Customer conversations about products, pricing, store conditions and other matters are increasingly accessible via the proliferation of social media and other Web-based tools.

Hence the agreement by Wal-Mart to acquire Kosmix, the social-media analysis firm, as reported in last week's SN. Kosmix has created what it calls a “social genome,” or a platform that organizes the content generated on social media sites according to users, topics, products, places and events, as described in a blog post by the company's co-founder.

“The first generation of ecommerce was about bringing the store to the Web,” wrote Anand Rajaraman in the blog post. “The next generation will be about building integrated experiences that leverage the store, the Web and mobile, with social identity being the glue that binds the experience.”

That jibes with the way Duke described Wal-Mart's view of ecommerce in a presentation in New York last week. The company doesn't see Web-based retailing as being distinctly separate from store-based retailing.

“We see mobile technology, social networking communication [and] e-commerce as just a part of commerce,” Duke said. “It's not different channels — it's just the way customers will shop in the future.”

With the acquisition of Kosmix, Wal-Mart will seek to leverage this “social genome” platform to create @WalmartLabs, a new division at the global retail giant charged with integrating social and mobile platforms with the company's retail business.

The new division won't necessarily be an ecommerce platform in and of itself, but instead a rich trove of data — customer conversations, interests and shopping patterns — and a source of tools that could yield valuable marketing and merchandising insights, and act upon them.

In the Wall Street Journal last week, Stephen Quinn, Wal-Mart's chief marketing officer, was quoted saying Wal-Mart is already seeking ways to customize online circulars for individual shoppers.

Wal-Mart's launch last month of Walmart To Go, an online venture offering ordering and delivery of grocery products in the San Jose, Calif., market, likewise can be seen as a learning tool. How will Wal-Mart's core shoppers use this service? Will it draw in new customers that hadn't shopped its stores? What products will they buy online?

Inquiring minds at Wal-Mart want to know, and very soon they will know the answer to all those questions, and more.

TAGS: Walmart