- Walmart wants to sell more of its own technology and services to other retailers.
- It has struck a deal with Salesforce, so it can get in front of more potential customers.
- Walmart also wants to sell more of its customer insights, fulfillment services and digital advertising.
As times get tighter in retail, Walmart is chasing a new side hustle.
The retail giant, known for selling groceries, toothpaste, toys and more in its big-box stores, wants to sell more of its technology and services to other companies. On Thursday, it announced a deal with Salesforce to ramp up sales of its GoLocal delivery service, which drops off purchases at customers’ doors; and Store Assist, which helps employees more quickly and accurately pick and pack orders for curbside pickup and delivery.
Starting this spring, the services will be offered through Salesforce and listed in its app store for businesses.
Walmart’s latest push to commercialize its tech comes as the retail environment gets tougher. Inflation has forced shoppers to spend more on necessities, driving higher sales of Walmart’s groceries. But the company is also selling fewer higher-margin items like electronics, clothes and other discretionary merchandise.
Walmart Global Chief Technology Officer Suresh Kumar said the deal with Salesforce will help Walmart improve the experience for shoppers.
“By bringing in other retailers, we can understand what the customer needs are throughout the shopping journey and then be able to improve our products to be able to serve the customer no matter how, where or when they shop,” he said. “That ultimately is going to benefit us also because we will continue to keep improving our products.”
For instance, as Walmart’s GoLocal has more packages to deliver from more retailers, its drivers will have denser routes, he said. That brings down the cost of Walmart’s last-mile deliveries and allows a driver to drop off a customer’s packages from multiple retailers in a single stop.
Walmart has looked for new and more profitable ways to turn its millions of customers and more than 5,300 U.S. stores and warehouse clubs into more money. Those efforts include growing its advertising business, Walmart Connect; attracting more sellers to its third-party marketplace and selling them fulfillment services; and charging for Walmart Luminate, a customer insights tool for merchants and suppliers. It co-founded and backed a financial technology startup. It also launched Walmart+, a subscription service that is the retailer’s answer to Amazon Prime.
Walmart launched GoLocal in 2021 and has signed on customers, including Home Depot and Chico’s. It began selling Store Assist, technology that its own store employees use, in the summer.
With the moves, Walmart is taking a page from rival Amazon’s playbook. Over the past two years, Amazon has licensed its cashierless checkout technology, called “Just Walk Out,” and signed up airports, sports stadiums, arenas and a Missouri grocer to bring the technology to their stores. It’s also looked to sell its palm-scanning payment system and launched an analytics service where brands pay for data on how their products perform in Amazon’s physical stores.
Walmart has not disclosed details of the commercial agreements or estimated how large its commercialization business could become. Yet it is showing signs of growth. GoLocal has made more than 3 million deliveries so far, Walmart said. It surpassed 1 million deliveries in August.
Walmart’s newer businesses have become a regular part of the company’s earnings calls, too. In November, Walmart Chief Financial Officer John David Rainey said Walmart added more than 8,000 sellers to its third-party marketplace in the fiscal third quarter. Its digital advertising business increased over 30% in the quarter globally, led by 40% growth in Walmart Connect in the U.S. and ads on Flipkart, an e-commerce site in India that it majority owns.
Salesforce Chief Product Officer David Schmaier said retailers are hungry for solutions as they try to keep up with customers who have high expectations and who shift between shopping in store, ordering purchases to their homes and retrieving online purchases in the store or parking lot. According to Salesforce data, one in five online orders placed the weekend before Christmas were picked up at the store.
Walmart will stand out in its app store as a technology by retailers and for retailers, he added.
Still, even with all it’s offering to other companies, Walmart is being mindful about not giving away its secret sauce, said Kumar, the company’s technology chief. Some of its technologies won’t be for sale.
“We are actually very deliberate in terms of choosing the kinds of technologies that we want to offer to other businesses,” he said.
–CNBC’s Annie Palmer contributed to this story.
Source: Business - cnbc.com
