In another sign that Walmart is serious about its commitment to both innovation and becoming a fashion leader, the world’s largest retailer has wooed Rent The Runway co-founder Jennifer Fleiss to lead its “Code Eight” startup. She will focus on developing “highly personalized, one-to-one shopping experiences,” according to a statement. Her hiring follows the March 2017 launch of the Walmart tech incubator Store No. 8, named for an early Walmart location where founder Sam Walton would test out new ideas.
The Retail TouchPoints team discusses whether someone from the scrappy, fast-moving startup world will change the culture at Walmart or whether it will change her, and what Fleiss’ move means in terms of changing roles in retail overall.
Debbie Hauss, Editor-in-Chief: What remains to be seen with Walmart’s recent flurry of unique and innovative smaller retail businesses is how Walmart is going to manage these businesses. If Walmart executive management is wise, they will largely leave the smaller, agile businesses alone to maintain their established brand images. The fear is that Walmart will try to gobble up these businesses and make them part of the Walmart persona. That would be deadly to Moosejaw and Bonobos if that acquisition goes through. But by jump starting an Innovation Incubator, maybe the organization is seeing the light when it comes to the reasons why smaller, unique brands could be an asset to a larger, more traditional organization. But once again, the incubator will only succeed if Walmart allows it to. So, to be successful Fleiss may have to stay strong and stand her ground when it comes to challenging the traditional thinking within the Walmart organization.
Adam Blair, Executive Editor: A little over a year ago I interviewed venture capital expert Zach Ware, who discussed the dangers retailers face in trying to “buy” innovation: “Simply buying a company and bolting the brand to your own doesn’t work anymore. There’s innovation at play at the startup company that you want to allow to thrive, and if you suck them into your existing machines, you’ll kill it.” Ware also noted that company founders stick around only 12 to 18 months after an acquisition, on average. Walmart’s recent moves to woo innovators — not just grudgingly accept them as part of the purchase price — strikes me as a good attempt to get away from the sad tradition of stifling innovation. It’s also a recognition that technology alone doesn’t equal innovation: it’s technology PLUS people PLUS ideas PLUS resources. The question is, will Walmart be patient enough to wait…