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The entry of Amazon, the largest online eCommerce site, into the brick-and-mortar business might have scared off many, but it didn’t scare Walmart, and for good reason. Despite instantly adding over 300 Whole Foods stores nationwide, Amazon still has a long way to go before they can pose any form of threat to Walmart.
The retail enterprise has a long history of adapting to change, and their latest actions show that they are ready for the next retail revolution.
1. Acquisitions That Increase Potential Audience
According to a recent Bloomberg report, Walmart’s online sales grew by 69% in the first quarter of 2017, bringing their overall revenue to a whopping $117.5 billion. Much of the growth is being
attributed to the 2016 acquisition of low price eCommerce powerhouse, Jet.com, for $3 billion cash and $300 million in shares, but there is more to Walmart’s success than a single acquisition.
In 2016, Walmart realized that the quickest way to bring in innovation and improve their eCommerce capabilities was through strategic acquisitions that improved their overall digital presence and eCommerce capabilities. After buying Jet.com, Walmart embarked on a series of acquisitions that included Men’sclothing brand, Bonobos for $310 million, and outdoor retailer, Moosejaw, for $51 million cash and more. Thanks to the acquisitions and increased technology and eCommerce innovative solutions, Walmart now offers over 35 million items on their website. While that may not seem like a lot, it is 4 times more products than they had just last year, showing that their growth is only just beginning.
The recent acquisitions did more than increase their product line – they opened up Walmart to a new range of potential buyers thanks to the expanded brands available and the online convenience. It was reported that 42% of regular Walmart customers shopped on Amazon Prime – a number Walmart is surely hoping to change with the improvement of their online capabilities.
2. Breeding Innovation in Incubators
In addition to purchasing companies with innovations ready to be integrated into their existing ecosystem, Walmart realized that a great way to improve their existing operations would be by creating centers dedicated to Walmart-focused innovation in the form of labs and incubators. In 2011 Walmart purchased social media platform and search engine company, Kosmix, for $300 million, and used them as the foundation for Walmart Labs, which is, according to their website, “an idea incubator for the world’s largest global retailer”. Today, Walmart Labs serves as the tech team for Walmart, routinely unveiling innovative solutions aimed at improving the operations and the customer experience at Walmart and Walmart brand stores.
In addition to Walmart Labs, Walmart recently launched the startup incubator Store No 8, called so as a nod to Sam Walton, whose experimental store number 8 is credited with propelling Walmart to where it is today, in an effort to increase collaboration with startups and increase the rate of innovation within the Walmart company. According to Marc Lore, Former CEO of Jet.com and current President and CEO of Walmart’s eCommerce division, Store No 8 will serve as a VC for startups: “We’ll be bringing in entrepreneurs and giving them capital… and give them the opportunity to change the course of retail five or 10 years out”.
3. Test Driving Innovation First
With over 260 million customers per week visiting almost 12,000 stores throughout 28 countries, and over 1 million employees in the U.S. alone, Walmart has an almost captive audience with 
which to test innovation, learn what works and what doesn’t and implement the highest converting and most enhancing solutions.
Two test centers were recently opened in Tomball, Texas and Lake Nona, Florida testing out new innovations and solutions for customers. The goal of the testing centers is gain a better understanding of the real-life implications of technology and functionality improvements in the Walmart stores, with the purpose of improving their customer experience as well as revenue generation. One of the innovations Walmart is exploring in the test centers is their latest Scan & Go technology which will be a direct competitor to the Amazon Go stores and integrate smartphone apps and handheld scanners to improve the shopping experience and enhance the payment process. Other innovations include next generation call buttons throughout the store, appointment setting and ordering technology through smart devices, integrated pickup solutions and more.
Lessons from Walmart
While it may be hard to replicate the worldwide success of the retail giant, companies looking to retain their competitive edge in the ever changing world can learn a lot from the agility and acceptance to change that Walmart exhibits.
The recent emphasis on innovation and the steps Walmart is taking to ensure they remain at the forefront of their industry is what will propel them forward in the upcoming years and ensure that they remain market leaders – much to the dismay of Amazon and other companies who hoped they could displace the enterprise.
