Traditional Stores Opening Silicon Valley Labs In Attempt to Compete Online
It’s taken many years and lots of proclamations from the Internet industry that it has taken over shopping (which it hasn’t by any stretch of the imagination but it’s great PR hype, isn’t it?) but the world of traditional brick and mortar retailers is giving in just a little.
How? They are setting up labs in the Silicon Valley area to be closer to the innovation so they don’t get left behind. The Associated Press reports
Software engineers wearing jeans and flip flops test the latest smartphone apps. Walls and windows double as whiteboards where ideas are jotted down. And a mini basketball net is in the center of it all.
At first glance, this workplace resembles any Silicon Valley startup. There’s just one exception: Target’s trademark red bulls-eye at the entrance.
Target, Kohl’s and home-shopping network QVC are among a half dozen retailers opening technology test labs in the San Francisco area to do things like improve their websites and create mobile shopping apps. They’re setting up shop in modern spaces and competing for top Silicon Valley talent to replicate the creativity, culture and nimbleness of online startups.
Wal-Mart was one of the earliest big box adopters of the Silicon Valley lab and they have gone in in a very big way. The biggest success thus far was the re-working of the their site search which now has a more intent driven result set.
Wal-Mart’s mobile app also has been a big focus at Wal-MartLabs, which has 1,200 workers and all the trappings of a Silicon Valley startup including treadmill desks and ping pong tables. For instance, Wal-MartLabs developed technology that enables Wal-Mart’s mobile app to help guide shoppers to products. It also developed technology that enables the mobile app to track customers’ spending based on a predetermined budget.
Wal-Mart, which is based in Bentonville, Ark., says having a presence in Silicon Valley has been invaluable in part because it offers the company early access to technology entrepreneurs. For example, two years ago, Wal-MartLabs met the founders of a startup called Grabble as they were in Silicon Valley pitching their technology that enables customers to get receipts for their purchases by email. Wal-Mart has since bought the startup, hired the founders, and next year, shoppers will be able to get the so-called e-receipts.
So do you need to be working in Silicon Valley to have this kind of result? Maybe or maybe not. Being where much of the Internet tech talent resides certainly can’t hurt and the retailers that are doing are likely to have the capital to pull off such large efforts.
All in all, it’s an interesting ‘tip of the hat’ to the Internet space that has certainly turned traditional retail on its ear. What do you think?