Wal-Mart focuses on technology part for online players

Wal-Mart run a new unit of the company called @WalmartLabs near Silicon Valley which is crunching mountains of data from social networks and riding a wave of smart phone adoption in hopes of capturing more sales for Wal-Mart online.

@WalmartLabs is aggressively hiring software developers and has started what could turn into a string of global e-commerce acquisitions on behalf of the retailer overseen by former Evercore investment banker Brian Roberts.

"The company is putting a lot of resources behind the e-commerce push and wants it to grow quickly," said Roberts. "To look back 10 or 15 years from now and say you were there when the direction of the whole company changed - that's exciting."

Wal-Mart generates more than $400 billion (255 billion pounds) in annual revenue. Yet it is the sixth-largest Internet retailer, behind Amazon.com Inc, Staples Inc, Apple Inc, Dell Inc and Office Depot Inc, according to industry publication Internet Retailer.

Wal-Mart does not disclose online sales, but this part of the company's business likely accounts for less than 1 percent of total sales - or around $4 billion a year, according to Ed Weller, an independent investment and retail analyst. The retailer's online sales are probably growing at a similar rate to e-commerce in general, Weller said.

One of the biggest opportunities comes from combining Wal-Mart's data on purchase history with data from social networks like Facebook and micro-blogging site Twitter.

Transaction history tells Wal-Mart what customers have bought in the past. Social data has the potential to tell the retailer what consumers may buy in the future - information that could be even more valuable.

Through tweets and Facebook updates, marketers have the potential ability to glean details of consumers' interests. Knowing what people like and want can help retailers stock more items that will sell better.

According to a recent report in Internet Retailer, "More than half of consumers grant online retailers permission to use their Facebook data, according to a new study from social commerce applications supplier Sociable Labs."

Before the rise of social networking, most of the Internet data that interested retailers was from purchases and other transactions by customers. This was owned by corporations that would not share it.

Facebook updates and tweets are, by definition, more public, which makes the information more accessible for analysis.

Ref: http://www.chicagotribune.com/business/sns-rt-us-walmart-ecommercetre7bk1ez-20111221,0,4956704.story

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