Is “too big to fail” in retailing becoming “too big is failing”?


For the past few years, we have written about the ways in which consumers have gained control over their shopping experience, and one of the results of that control is the beginning of the end of the big-box era  (see, “The Consumer in Control Goes Shopping”


Walmart, for one, appears to realize that, if it wants to remain a retailing power in this new environment, it will need to improve the shopping experience for its customers, both online and in the stores.


The company has built a new search engine from scratch in order to better help customers find what they are looking for. Walmart is managing its own search in-house, in a similar manner to online competitors and eBay, but in opposition to its conventional brick-and-mortar peers that mostly outsource their search technology. Walmart’s new semantic-search engine technology, named Polaris, includes something it once called the “Social Genome” – a way of enabling discovery using algorithms that rank results via social signals from around the web. Walmart claims the new search engine will increase by 10 to 15 percent the likelihood that customers will complete their purchase.
Walmart has also begun testing an iPhone-based self-checkout system in one of its Arkansas stores, making it the second major retailer (aside from Apple) to try such a system.

Over the past few years Walmart has purchased small technology companies such as Kosmix, OneRiot and Small Society and combined them to create WalMart Labs, which the company is using for digital innovation.  Walmart’s low prices will still be a draw for many consumers, but in an era where consumers also value simplicity and experience, it won’t be enough.  We expect Walmart to continue to aggressively address the digital side of the retailing experience, and for others big-box retailers to follow suit.

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