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Wal-Mart Subscribes to Next-Gen Retailing Ideas

Last November, when Wal-Mart (NYSE: WMT  ) launched its subscription commerce service Goodies, it was seen not so much as a revolutionary endeavor but an evolutionary one, built on the path blazed by those who went before.

Reminiscent of the old beer-a-month clubs -- or the even older "Buy 10 CDs for a penny and agree to buy 14 more at regular prices over the next year" services -- subscription commerce has really taken off in the past few years as curated sales and "social shopping" have grown in popularity.

From cosmetics (Birchbox) and razors (Dollar Shave Club) to dog treats (BarkBox) and fishing (Mystery Tackle Box), there's a subscription service for just about any interest you have. Wal-Mart even ventured into the waters earlier with its Shopycat social gifting service built on top of Facebook that suggests gifts for friends based on their usage of the site. Posts are translated into keywords that are turned into gift ideas, at both Wal-Mart and elsewhere. 

While Goodies may have been Wal-Mart's response to test the waters for a food-based subscription service -- not a bad idea considering its position as the world's biggest retailer -- and as a means of challenging, which offers a "Subscribe and Save" shopping service of its own (and earlier had also launched two Facebook apps), it likely really wanted to cull the data it generated from the customers to plug into its Social Genome project.

Ever since buying a bunch of tech startups and pouring them into its R&D division's WalmartLabs, Wal-Mart has been experimenting with concepts in a bid to glean customer insights. In a bit of NSA-like information gathering, its Social Genome project, which it acquired when it bought Kosmix, is described as "the social world -- all the millions and billions of tweets, Facebook messages, blog postings, YouTube videos, and more -- a living organism itself, constantly pulsating and evolving." It wants to tap into and catalog your life, and generate the info into a better shopping experience.

Whereas Target recently launched its Subscription Services feature in direct response to Amazon's continued foray into retailing, Wal-Mart is happy to see what information it can cull from its experiments. In fact, while Shopycat has been a success and lives on, Goodies has already closed its doors, not even a year into the trial.

I don't think it's correct to say the subscription service was a failure; Wal-Mart likely gleaned a lot of customer data from the effort that it will be putting to use in other areas. As the website notice announcing its demise suggests, it's taking what it learned from the project and will "bring a bit of that Goodies magic to the world of Walmart shopping."

Wal-Mart may give the appearance of being only a stodgy retailer, but in reality it is a high-tech company from which we can expect to see, if not cutting-edge advances, leading trends in sales that ought to improve its bottom line down the line.

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5/26/2016 4:01 PM
WMT $70.85 Up +0.37 +0.52%
Wal-Mart Stores CAPS Rating: ***