Does Walmart have a future as a tech company?

REUTERS/Rick Wilking/File Photo
REUTERS/Rick Wilking/File Photo
Image: Reuters/Rick Wilking
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Walmart, the world’s largest retailer, is making some of the same technology it created to power its business available to small- and medium-sized retailers.

The company announced today it will begin selling the “technologies and capabilities” it developed to create a seamless shopping experience across its digital and physical channels. A spokesperson for the company said retailers will, for example, have access to the same software and systems Walmart uses to show shoppers which stores and pickup times are available for online orders, and those which allow shoppers to choose different options like curbside versus in-store pickup.

The spokesperson said retailers will also be able to use the software Walmart developed for its in-store employees, who need to pick all the products for online orders, validate whether items are in stock and manage substitutions, know approximately how long before a customer arrives for pickup, and get notified when they do.

Walmart is partnering on the effort with Adobe, a tech provider, and will integrate Adobe’s commerce platform with Walmart Marketplace, where approved third-party sellers are able to list goods for sale. The Walmart spokesperson said businesses on Adobe’s commerce platform will be able to easily list on Walmart Marketplace (provided they meet the requirements) and get access to Walmart’s fulfillment network to offer two-day shipping across the US.

The company will make its tech available in the coming months, the spokesperson said. It will release pricing and other details closer to launch.

Technology as a new revenue stream for Walmart

The move is a way for Walmart to generate income from tools it originally built for its own use in its bid to transform its business for the digital era and keep pace with Amazon. Online and offline shopping continue to blend, and Walmart believes providing technology that enables businesses to navigate the shift will unlock a new source of revenue, according to the spokesperson. And while Walmart isn’t the only company providing this sort of software, it feels it has a unique opportunity due to its scale and expertise.

Walmart wouldn’t be the first retailer to cash in on technology it designed for itself. Amazon Web Services, the cloud-computing platform built by Andy Jassy, Amazon’s new CEO, similarly began as an internal project. Amazon realized the infrastructure it had engineered could be useful to others, and in 2006, opened it up to other businesses with the launch of AWS. Today Amazon says “hundreds of thousands of businesses” use it.

Retail services are a bit different from computing, but the new venture could help Walmart pad its profits and derive more benefit from the heavy investments it made to reshape its business as e-commerce has grown. Among the capabilities it has developed in recent years are a cloud-powered checkout system, technologies like mobile checkin that make it easier and quicker for shoppers to buy online and pickup in stores, app-based checkout for customers shopping in physical locations, and artificial intelligence that allows Walmart to choose better substitutions when a product in an online order is sold out. (Customers get to approve the suggested substitution—and of course whether they do or not feeds back into Walmart’s algorithms so it can make smarter decisions in the future.)

While Walmart’s focus for now is on this initial batch of services, according to the spokesperson, it will evaluate opportunities to offer others in the future.