December 12, 2017 • 21 mins
Retail has been undergoing a rapid, extreme time of change that hasn't happened since online shopping came on the scene 20 years ago. Companies like Wal-Mart, the biggest retailer in the world, are trying to get ahead of the next trends in how people will buy stuff. They're making a big bet on virtual reality and augmented reality, and this week Jenny Kaplan and Lindsey Rupp take you behind the scenes to use Wal-Mart as a case study for how you might buy a tent or even a dress in the future.
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Speaker 1 (00:05):
It's that time of year again, time to go holiday shopping.
Retailers prepare for this season all year long. The masses
descend looking for gifts and selling out money to stores
that are often a lot emptier the rest of the year.
But more and more people aren't actually going to stores
to shop. Instead, they're buying online. It saves time and
(00:26):
you don't have to deal with the crowds. The shift
shows how technology has transformed the retail industry. Twenty years ago,
e commerce was in its infancy. Amazon sold its first
ever book in July. So twenty years from now, as
technology continues to evolve, the way we shop is probably
gonna look a lot different. The world's largest retailer, Walmart,
(00:50):
is betting a big part of that future is a
virtual and augmented reality. I'm Jenny Kaplan and I'm Lindsay
up today on Material World. We're talking about just that,
virtual reality, augmented reality, and retail. How the new tech
(01:13):
fields are going to impact the way consumers make purchases.
We're looking at this using Walmart as a case study.
A couple of months ago, I went to an event
in the Hollywood Hills in Los Angeles where Walmart's tech incubator,
(01:35):
called Store Number eight, brought together a bunch of virtual
reality startups and retail brands to show how the technological
change could manifest. There were virtual stores, three D images,
gamified shopping experiences, and virtual camping and fishing sites. They
want to be the forced driving commerce forward, which is
(01:58):
what Walmart said when they are to this incubator called
Store Number eight. And of course that means nothing and
it means everything at the same time. You know, it's
just one of these vague technology industry mission statements. That's
Matt Boyle, he covers Walmart for Bloomberg. But what's really
interesting is that they do say that what they are
(02:18):
doing is they're making big bets on where shopping is going.
And that's something Walmart. It's clearly important to Walmart. They
need to know where shopping is going because for many
years they've been We're shopping has been you know, they
still have millions of shoppers whill only pay in cash,
and you know who insist on driving up to one
of their four thousand, seven hundred stores and they're beat
(02:40):
up pick up and sitting in this cavernous parking lot
um they need they really need to go where shoppers
are moving. And you might not think that Walmart would
be at the cutting edge of this versus Amazon or
eBay or someone, but you know, you have to give
them credit. They're getting their act together. They have some
new stealth projects going on in l A and double
in Hoboken, so they clearly have a lot cooking, I
(03:04):
would say, and at a time when there's not a
lot of you know, there's just a lot of doom
and gloom in retail um. You know, you kind of
have to at least point at Walmart and say, you know,
the big granddaddy of of retail um, you know, at
least is acting a little bit more like a youngster,
you know, doing some exciting stuff at a time uh,
(03:25):
you know, when it's just the sort of steady drumbeat
of of bad news. I mean, we'll learn more after
the holiday season wraps up and we sort of see
how the shakeout of winners and losers go. This is
a sign that Walmart is, you know, getting more serious.
And whether it's a I a r VR, I think
(03:49):
it all comes down to what all these things do
is is there is data. It's centered around data, and
Walmart CEO recently said to investors he was asked to
gray the company on their use of data, and you'd think, oh,
Walmart is awesome with data. They've got all these data
flowing in from all their shoppers and you know, um
and historically they've done so much with retailed data and
(04:11):
they know exactly how many cans of soup they're selling
at any given moment. But the CEO of Walmart said, no, actually,
we're not good at all with data. Where he gave
the company a grade of two out of ten, clearly
showing that's he's lighting a fire under somebody's you know.
But by saying that, um meaning you know, we need
to get better at how we use data. And a
lot of these applications you know, of AI and especially
(04:34):
machine you know, they're all based on the better data
you have, the more you're able to um do with it,
the more you're able to take the shopper forward, whether
or not they're willing to go there yet is another question.
How many out of end of ten people, you know,
how many are doing voice activated shopping right now on
their Alexa or their their Google Home device. You know,
maybe one out of ten, or maybe they're just kicking
(04:56):
your nd and we're here in New York in the
center of you know everything. H um, so yeah, I
mean it's again just it's it's a sound bet by Walmart.
They want to be seen as more cutting edge and
they've got a little bit more leeway and a little
bit more credibility since they bought Jet to do that.
(05:18):
Shoppers may not be into this kind of stuff now,
but Store number eight goals to figure out what they'll
be into in the future, to get a better sense
of what they're doing and why. Here's Katie Finnigan principle
of Store number There are quite a few technologies and
and some more on the near term horizon and some
on the longer term horizon that we think, you know,
have the potential to transform retail. Artificial intelligence I think
(05:42):
is underlying probably anything and everything we're doing, and there's
different ways to use it. I mean, it has a
big play in virtual reality as well, with voice and
recommendations and things like that. With in a hands free world. Um,
we were interested in robotics and what that can do
for fulfillment and other other pieces of the sort of
non customer facing experience and and maybe honestly customer facing
(06:05):
as well. Autonomous vehicles and drones are also very interesting
is what that can do to the supply chain. So
so really the spectrum is pretty broad. I think for us,
it's about coming up with our different strategies as to Okay,
we all agree that these have the potential to truly
transform the business and move the needle. But for us
(06:25):
now it's a conversation around prioritization as well as strategy. Right,
some of these things, we might realize it's gonna have
a huge impact, but it might not make sense for
us to build it. It might make sense for us
to buy it, and it might make sense for us
to partner, And so that build by partner decision is
actually a key part of the strategy, along with actually
setting up a company and infrastructure to to go after
(06:48):
these technologies. You kind of have to do all of
those decisions collectively before you you really you really pull
the trigger. The opportunity caused Store number eight to start
digging into VR and eventually led to the swanky party
I attended. No one had been incentivizing the core talent
to really think about what what we're calling the commerce
(07:09):
looks like and so the thought was, let's do an
open call and really just incentivize uh, this this community
to to all think about what their technology, what their
subject matter expertise, what the assets they've created can do
in the world of commerce. And we got over two
hundred applications in and about thirty of them were international,
(07:30):
So we felt that we really were able to cast
a pretty wide net in an effective way. And then
the idea about the event was, you know, I think
virtual reality is one of those technologies that it's pretty
impossible to just explain verbally and you've got to see
it to really understand it and and understand I think
the impact it potentially could have. And so when we
(07:51):
had effectively five winners plus the two we built seven
very different but all unique experiences, we thought the best
way to bringing all the thought leaders in the space
together was to host host, you know, a next generation
event that we called Innovate, to get all the thought
leaders there and excited about VR and have them actually
try it in real time. At the event, I got
(08:14):
to meet the people behind many of the winning exhibitions.
One of those is Keith Martin. He's the Vice principle
of Business Development and marketing at a company called Fusion.
They've developed the ability to use phone to take three
D images of different products. So we focus on smartphones,
iOS and Android to be able to capture three D content.
(08:37):
So what that means is either you moving around the
object or the object itself moving And what we're doing
is we're taking multiple angles as you move around something,
as well as we're using all of the smart things
that within modern phones accelerometer, the gyro, et cetera, in
order to be able to get a geometric understanding of
(08:58):
what you're capturing too. So because we capture in three D,
we're then able to do kind of the magic, the
superpowers as we call it with those images. So, for example,
with used car imaging, which is a focus for us
as a business, we are able You're able to walk
around the car once and get a full three sixty
(09:19):
of the car. And because it's captured in three D,
we can then, for example, change the backgrounds to make
it more alluring as a as a product image. And
from that, because it's captured in three D, we can
then do other things with it. So we can have
that cut that person out, segment them as the technical
(09:39):
term from the background and have them as an asset
for VR or a R commerce. We can bring through
data tagging of let's say the item from whatever database
source the partner has, we can change the backgrounds of
the capture, et cetera. We have as part of our
we have a long term goal as a business of
(10:00):
visual understanding and that's about you pointing your phone camera
or whatever crazy glasses will have in a couple of
years time an object and we will have a higher
accuracy of understanding that object than a two D image
can allow you. So there are future facing applications of
this of being able to buy or sell an item
(10:21):
within a few seconds just by the visual recognition of
a camera. But because of essentially the building up the
data set for the three D machine learning, we have
a consumer app which allows people to capture content and
what we what we see through that is people coming
to us as as a business and asking if they
(10:42):
can use this format on basically from a commercial point
of view and from that as an from a from
a business perspective, we are focused on essentially creating a
specific product around retail e commerce. So for car image,
walking around a car as a three sixty it's a
(11:03):
funny kind of movement that you have as you walk
around a car, just atally with your footsteps, and so
we have a specific capture app for that, which is
uses Compete division to essentially make it a super smooth,
buttery smooth as a very British way of looking at
it of moving around an object. The big question here
is how the technology that was on exhibition at Store
(11:24):
number eight event gets pushed forward. Where does it go
from here. Walmart's Katie Finnigan predicts it will be readily
available in the not so distant future. You know, I
do think it's probably five years out from when you're
going to have a headset in your home and do
this at your own leisure. Most experiences, or at least
high high quality experiences, are wired in, and so there's
(11:46):
a lot of wires and there's all these sensors that
are around you that you have to set up. And
it's clunky, right, it's not something that's that's user friendly
for at home use. I do think that that's changing,
and and that's where I think that that adoption at
home will happen in five years and but yes, it
will take some time in the hardware development Meanwhile, the
technology can come in handy for an enhanced in store experience,
(12:09):
and it might not just be limited to virtual reality
headsets and three D photos. I think you definitely have
an opportunity to have a set up in a store
or some sort of controlled physical environment. This has a
huge opportunity with what we're calling contextual shopping, so places
where you actually will be better off experiencing that item
(12:31):
in the context of the real world environment where you'll
use the item. And so you know, camping is is
the example you know, I use because obviously we've spent
some time thinking about that. Where looking at a tent
on a website is usually pretty engaging and immersive. There's
videos and other footage like that. Having a tent in
a store potentially you might be able to see the
(12:53):
tent set up, but there's probably only one or two
of the best sellers set up, not the full the
full spectrum. Where take that to the next level and
what that step change looks like is is actually being
in Yosemite where which is where you're going to go
for your summer vacation, and actually seeing that exact tent
on the campsite and being able to in virtual reality,
un zip it, get in the tent and lay down
(13:15):
and look up and look left and right and say,
you know, they say, this is a two person tent,
but it seems too tight for me, and being able
to swipe, and then all of a sudden you're magically
in the context of a four person tent and you
can experience that in in sort of real time, and
so it allows you to have that level of detail
and insight with obviously not the complexity of of the
(13:39):
actual physical process to get there. The camping activation was
one of two experiences developed by Walmart that were on
display at the event. Once you put the headset on,
you could cook recipes using cooking gear that's carried by Walmart,
or sit in a tent and see a shadow puppet show.
The other Walmart designed experience was focused on fishing and
(14:01):
allowed the user to test out different fishing poles to
gauge what it felt like to cast and reel in
virtual fish. There are so many applications for this. Even
at the event, there were those two outdoorsy experiences, several
fashion focused exhibitions, and a babyproofing game. Part of the
challenge for Walmart and other companies getting into this will
(14:22):
be determining where this technology can be useful and where
it can't. How do you start getting this to market
and just start learning And that's really the next phase
for us, because you know, we can think all day
long that this is the coolest way to buy a
tent in the world, but until we actually start selling
tents that way and customers validate that it's true, um,
(14:43):
I think it's just a hypothesis and a thesis, And
so our goal is to create an environment where we
can start testing those and then figure out, you know,
from a financial perspective, where we invest our time, energy
and money and probably where we don't. And that's always
going to be driven by um, you know, true customer
response and not sort of our our gut, our gut
(15:05):
instinct or gut reaction. Walmart hasn't made its virtual reality
experiments into consumer products yet, but it's in the works.
Then the challenge will be getting consumers on board. It
isn't going to be easy. Many of Walmart shoppers aren't
on the forefront of technology. They just want to go
to Walmart the old fashioned way and pick up a
(15:25):
gallon of milk and pay for it in cash. But
Walmart isn't just Walmart anymore. It's bought Jet, Bonobos, Modcloth,
and other companies that cater to younger consumers more likely
to be into new ways of shopping. Here's Bloomberg's Matt
Boyle again, there are retailers that will have these more
(15:46):
virtual dressing rooms and seeing what the fashions might look like.
A Target and Ike and others now can do the
same thing for furniture, where you can actually see what
the furniture or home to core would look like in
your home. For some of us, I was like, oh
my god, that's that's amazing. For others, you know, for
the tech community, they'd be like, oh, finally we're finally
getting around to this simple application. So in terms of
(16:09):
how soon we're going to see all of this, you know,
who knows. But what is interesting is that a lot
of these VR companies that Walmart was championing as part
of this store number eight initiative, you notice a lot
of them are in the apparel sector, and that's a
category that Walmart has historically not done very well. And
nobody associates Walmart with fashion, and several years ago they
(16:33):
they you know, made a big step backwards. But they
said forget about even trying to be fashion, for they
had tried and failed several times. They closed their office
in New York and said, the hell with it. We're
just going to sell socks and underwear because that's what
people who know us for. But now, you know, they
built up a pretty big, plus size business, and so
they think that if any of these VR applications not
(16:55):
even hit it big, but just sort of make you know,
buying apparel at Walmart a little bit easier or a
little bit cheaper, or just a little bit more cooler,
then that's a huge lift to a business that needs
a lift um right now, because it's one of the businesses,
along with home decor, that Walmart e commerce is trying
to build up. And you've seen it of course with bnobos,
(17:16):
the acquisition of bnobos Modcloth and the recent partnership with
Lord and Taylor, um, which you know struck a lot
of people. Is surprising, you know, why would these two
companies ever get together? Um? But this is all a
part of Walmart's effort to be more relevant, to be
where the shoppers going to get deeper into categories, you know,
beyond food, where they clearly are number one, but they
(17:38):
need to have that same sort of expertise in other areas. UM.
So you know, we're not going to see it next year,
but you might start seeing it in selective stores. You know.
Walmart like everybody else, has concept stores or next generation
stores where they can test out stuff. UM. And it
may not look exactly like it looks today, of course,
but that's all part of the sort of experimentation you know,
(17:59):
culture or of of tech. It's not just virtual reality.
Walmart Store number eight's working on other kinds of tech
that the group says could also change the game. There
are quite a few technologies and some more on the
near term horizon and some on the longer term horizon
that we think, you know, have the potential to transform retail. UM.
(18:21):
Artificial intelligence I think is underlying probably anything and everything
we're doing, and there's different ways to use it. I mean,
it has a big play in virtual reality as well,
with voice and recommendations and things like that. With in
a hands free world. We were interested in robotics and
what that can do for fulfillment and other other pieces
of the sort of non customer facing experience and and
(18:43):
maybe honestly customer facing as well. UM Autonomous vehicles and
drones are also very interesting is what that can do
to the supply chain. UM So, so really the spectrum
is pretty broad. I think for us it's about coming
up with our different strategies as to Okay, we all
agree that these have the potential to truly transform the
(19:05):
business and move the needle. But for us now it's
a conversation around prioritization as well as strategy. Right, some
of these things, we might realize it's gonna have a
huge impact, but it might not make sense for us
to build it. It might make sense for us to
buy it, and it might make sense for us to partner,
And so that build by partner decision is actually a
key part of the strategy, along with actually setting up
(19:28):
a company and infrastructure to UM to go after these technologies.
You kind of have to do all of those decisions
collectively before you you really you really pull the trigger.
I think it's an interesting time to cover this space
because you know, you don't just have these dinosaurs all
dying off. You at least have one dinosaur who's saying,
(19:48):
you know, I'm going to try to reinvent myself here
and if I have to throw a swanky party in
the Hollywood Hills, you know um to do that, then
so be it. That's it for this episode of Material World.
(20:10):
Thanks for listening. For more episodes, find us on Apple Podcasts,
the Bloomberg Terminal, or wherever you listen to shows like this.
For more of our regular coverage, I'm on Twitter at
l c Rupp and Jenny's at Jenny m. Kaplan. Matt
Boyle is at biz Boil. Material World is produced by
Magnus Hendrickson and Liz Smith. Francesca Levy is the head
(20:32):
of Boomberg Podcasts. We'll be back in two weeks. Yeah,
(21:03):
let's hear it for virtual reality.
It's that time of year again, time to go holiday shopping.
Retailers prepare for this season all year long. The masses
descend looking for gifts and selling out money to stores
that are often a lot emptier the rest of the year.
But more and more people aren't actually going to stores
to shop. Instead, they're buying online. It saves time and
(00:26):
you don't have to deal with the crowds. The shift
shows how technology has transformed the retail industry. Twenty years ago,
e commerce was in its infancy. Amazon sold its first
ever book in July. So twenty years from now, as
technology continues to evolve, the way we shop is probably
gonna look a lot different. The world's largest retailer, Walmart,
(00:50):
is betting a big part of that future is a
virtual and augmented reality. I'm Jenny Kaplan and I'm Lindsay
up today on Material World. We're talking about just that,
virtual reality, augmented reality, and retail. How the new tech
(01:13):
fields are going to impact the way consumers make purchases.
We're looking at this using Walmart as a case study.
A couple of months ago, I went to an event
in the Hollywood Hills in Los Angeles where Walmart's tech incubator,
(01:35):
called Store Number eight, brought together a bunch of virtual
reality startups and retail brands to show how the technological
change could manifest. There were virtual stores, three D images,
gamified shopping experiences, and virtual camping and fishing sites. They
want to be the forced driving commerce forward, which is
(01:58):
what Walmart said when they are to this incubator called
Store Number eight. And of course that means nothing and
it means everything at the same time. You know, it's
just one of these vague technology industry mission statements. That's
Matt Boyle, he covers Walmart for Bloomberg. But what's really
interesting is that they do say that what they are
(02:18):
doing is they're making big bets on where shopping is going.
And that's something Walmart. It's clearly important to Walmart. They
need to know where shopping is going because for many
years they've been We're shopping has been you know, they
still have millions of shoppers whill only pay in cash,
and you know who insist on driving up to one
of their four thousand, seven hundred stores and they're beat
(02:40):
up pick up and sitting in this cavernous parking lot
um they need they really need to go where shoppers
are moving. And you might not think that Walmart would
be at the cutting edge of this versus Amazon or
eBay or someone, but you know, you have to give
them credit. They're getting their act together. They have some
new stealth projects going on in l A and double
in Hoboken, so they clearly have a lot cooking, I
(03:04):
would say, and at a time when there's not a
lot of you know, there's just a lot of doom
and gloom in retail um. You know, you kind of
have to at least point at Walmart and say, you know,
the big granddaddy of of retail um, you know, at
least is acting a little bit more like a youngster,
you know, doing some exciting stuff at a time uh,
(03:25):
you know, when it's just the sort of steady drumbeat
of of bad news. I mean, we'll learn more after
the holiday season wraps up and we sort of see
how the shakeout of winners and losers go. This is
a sign that Walmart is, you know, getting more serious.
And whether it's a I a r VR, I think
(03:49):
it all comes down to what all these things do
is is there is data. It's centered around data, and
Walmart CEO recently said to investors he was asked to
gray the company on their use of data, and you'd think, oh,
Walmart is awesome with data. They've got all these data
flowing in from all their shoppers and you know, um
and historically they've done so much with retailed data and
(04:11):
they know exactly how many cans of soup they're selling
at any given moment. But the CEO of Walmart said, no, actually,
we're not good at all with data. Where he gave
the company a grade of two out of ten, clearly
showing that's he's lighting a fire under somebody's you know.
But by saying that, um meaning you know, we need
to get better at how we use data. And a
lot of these applications you know, of AI and especially
(04:34):
machine you know, they're all based on the better data
you have, the more you're able to um do with it,
the more you're able to take the shopper forward, whether
or not they're willing to go there yet is another question.
How many out of end of ten people, you know,
how many are doing voice activated shopping right now on
their Alexa or their their Google Home device. You know,
maybe one out of ten, or maybe they're just kicking
(04:56):
your nd and we're here in New York in the
center of you know everything. H um, so yeah, I
mean it's again just it's it's a sound bet by Walmart.
They want to be seen as more cutting edge and
they've got a little bit more leeway and a little
bit more credibility since they bought Jet to do that.
(05:18):
Shoppers may not be into this kind of stuff now,
but Store number eight goals to figure out what they'll
be into in the future, to get a better sense
of what they're doing and why. Here's Katie Finnigan principle
of Store number There are quite a few technologies and
and some more on the near term horizon and some
on the longer term horizon that we think, you know,
have the potential to transform retail. Artificial intelligence I think
(05:42):
is underlying probably anything and everything we're doing, and there's
different ways to use it. I mean, it has a
big play in virtual reality as well, with voice and
recommendations and things like that. With in a hands free world. Um,
we were interested in robotics and what that can do
for fulfillment and other other pieces of the sort of
non customer facing experience and and maybe honestly customer facing
(06:05):
as well. Autonomous vehicles and drones are also very interesting
is what that can do to the supply chain. So
so really the spectrum is pretty broad. I think for us,
it's about coming up with our different strategies as to Okay,
we all agree that these have the potential to truly
transform the business and move the needle. But for us
(06:25):
now it's a conversation around prioritization as well as strategy. Right,
some of these things, we might realize it's gonna have
a huge impact, but it might not make sense for
us to build it. It might make sense for us
to buy it, and it might make sense for us
to partner, And so that build by partner decision is
actually a key part of the strategy, along with actually
setting up a company and infrastructure to to go after
(06:48):
these technologies. You kind of have to do all of
those decisions collectively before you you really you really pull
the trigger. The opportunity caused Store number eight to start
digging into VR and eventually led to the swanky party
I attended. No one had been incentivizing the core talent
to really think about what what we're calling the commerce
(07:09):
looks like and so the thought was, let's do an
open call and really just incentivize uh, this this community
to to all think about what their technology, what their
subject matter expertise, what the assets they've created can do
in the world of commerce. And we got over two
hundred applications in and about thirty of them were international,
(07:30):
So we felt that we really were able to cast
a pretty wide net in an effective way. And then
the idea about the event was, you know, I think
virtual reality is one of those technologies that it's pretty
impossible to just explain verbally and you've got to see
it to really understand it and and understand I think
the impact it potentially could have. And so when we
(07:51):
had effectively five winners plus the two we built seven
very different but all unique experiences, we thought the best
way to bringing all the thought leaders in the space
together was to host host, you know, a next generation
event that we called Innovate, to get all the thought
leaders there and excited about VR and have them actually
try it in real time. At the event, I got
(08:14):
to meet the people behind many of the winning exhibitions.
One of those is Keith Martin. He's the Vice principle
of Business Development and marketing at a company called Fusion.
They've developed the ability to use phone to take three
D images of different products. So we focus on smartphones,
iOS and Android to be able to capture three D content.
(08:37):
So what that means is either you moving around the
object or the object itself moving And what we're doing
is we're taking multiple angles as you move around something,
as well as we're using all of the smart things
that within modern phones accelerometer, the gyro, et cetera, in
order to be able to get a geometric understanding of
(08:58):
what you're capturing too. So because we capture in three D,
we're then able to do kind of the magic, the
superpowers as we call it with those images. So, for example,
with used car imaging, which is a focus for us
as a business, we are able You're able to walk
around the car once and get a full three sixty
(09:19):
of the car. And because it's captured in three D,
we can then, for example, change the backgrounds to make
it more alluring as a as a product image. And
from that, because it's captured in three D, we can
then do other things with it. So we can have
that cut that person out, segment them as the technical
(09:39):
term from the background and have them as an asset
for VR or a R commerce. We can bring through
data tagging of let's say the item from whatever database
source the partner has, we can change the backgrounds of
the capture, et cetera. We have as part of our
we have a long term goal as a business of
(10:00):
visual understanding and that's about you pointing your phone camera
or whatever crazy glasses will have in a couple of
years time an object and we will have a higher
accuracy of understanding that object than a two D image
can allow you. So there are future facing applications of
this of being able to buy or sell an item
(10:21):
within a few seconds just by the visual recognition of
a camera. But because of essentially the building up the
data set for the three D machine learning, we have
a consumer app which allows people to capture content and
what we what we see through that is people coming
to us as as a business and asking if they
(10:42):
can use this format on basically from a commercial point
of view and from that as an from a from
a business perspective, we are focused on essentially creating a
specific product around retail e commerce. So for car image,
walking around a car as a three sixty it's a
(11:03):
funny kind of movement that you have as you walk
around a car, just atally with your footsteps, and so
we have a specific capture app for that, which is
uses Compete division to essentially make it a super smooth,
buttery smooth as a very British way of looking at
it of moving around an object. The big question here
is how the technology that was on exhibition at Store
(11:24):
number eight event gets pushed forward. Where does it go
from here. Walmart's Katie Finnigan predicts it will be readily
available in the not so distant future. You know, I
do think it's probably five years out from when you're
going to have a headset in your home and do
this at your own leisure. Most experiences, or at least
high high quality experiences, are wired in, and so there's
(11:46):
a lot of wires and there's all these sensors that
are around you that you have to set up. And
it's clunky, right, it's not something that's that's user friendly
for at home use. I do think that that's changing,
and and that's where I think that that adoption at
home will happen in five years and but yes, it
will take some time in the hardware development Meanwhile, the
technology can come in handy for an enhanced in store experience,
(12:09):
and it might not just be limited to virtual reality
headsets and three D photos. I think you definitely have
an opportunity to have a set up in a store
or some sort of controlled physical environment. This has a
huge opportunity with what we're calling contextual shopping, so places
where you actually will be better off experiencing that item
(12:31):
in the context of the real world environment where you'll
use the item. And so you know, camping is is
the example you know, I use because obviously we've spent
some time thinking about that. Where looking at a tent
on a website is usually pretty engaging and immersive. There's
videos and other footage like that. Having a tent in
a store potentially you might be able to see the
(12:53):
tent set up, but there's probably only one or two
of the best sellers set up, not the full the
full spectrum. Where take that to the next level and
what that step change looks like is is actually being
in Yosemite where which is where you're going to go
for your summer vacation, and actually seeing that exact tent
on the campsite and being able to in virtual reality,
un zip it, get in the tent and lay down
(13:15):
and look up and look left and right and say,
you know, they say, this is a two person tent,
but it seems too tight for me, and being able
to swipe, and then all of a sudden you're magically
in the context of a four person tent and you
can experience that in in sort of real time, and
so it allows you to have that level of detail
and insight with obviously not the complexity of of the
(13:39):
actual physical process to get there. The camping activation was
one of two experiences developed by Walmart that were on
display at the event. Once you put the headset on,
you could cook recipes using cooking gear that's carried by Walmart,
or sit in a tent and see a shadow puppet show.
The other Walmart designed experience was focused on fishing and
(14:01):
allowed the user to test out different fishing poles to
gauge what it felt like to cast and reel in
virtual fish. There are so many applications for this. Even
at the event, there were those two outdoorsy experiences, several
fashion focused exhibitions, and a babyproofing game. Part of the
challenge for Walmart and other companies getting into this will
(14:22):
be determining where this technology can be useful and where
it can't. How do you start getting this to market
and just start learning And that's really the next phase
for us, because you know, we can think all day
long that this is the coolest way to buy a
tent in the world, but until we actually start selling
tents that way and customers validate that it's true, um,
(14:43):
I think it's just a hypothesis and a thesis, And
so our goal is to create an environment where we
can start testing those and then figure out, you know,
from a financial perspective, where we invest our time, energy
and money and probably where we don't. And that's always
going to be driven by um, you know, true customer
response and not sort of our our gut, our gut
(15:05):
instinct or gut reaction. Walmart hasn't made its virtual reality
experiments into consumer products yet, but it's in the works.
Then the challenge will be getting consumers on board. It
isn't going to be easy. Many of Walmart shoppers aren't
on the forefront of technology. They just want to go
to Walmart the old fashioned way and pick up a
(15:25):
gallon of milk and pay for it in cash. But
Walmart isn't just Walmart anymore. It's bought Jet, Bonobos, Modcloth,
and other companies that cater to younger consumers more likely
to be into new ways of shopping. Here's Bloomberg's Matt
Boyle again, there are retailers that will have these more
(15:46):
virtual dressing rooms and seeing what the fashions might look like.
A Target and Ike and others now can do the
same thing for furniture, where you can actually see what
the furniture or home to core would look like in
your home. For some of us, I was like, oh
my god, that's that's amazing. For others, you know, for
the tech community, they'd be like, oh, finally we're finally
getting around to this simple application. So in terms of
(16:09):
how soon we're going to see all of this, you know,
who knows. But what is interesting is that a lot
of these VR companies that Walmart was championing as part
of this store number eight initiative, you notice a lot
of them are in the apparel sector, and that's a
category that Walmart has historically not done very well. And
nobody associates Walmart with fashion, and several years ago they
(16:33):
they you know, made a big step backwards. But they
said forget about even trying to be fashion, for they
had tried and failed several times. They closed their office
in New York and said, the hell with it. We're
just going to sell socks and underwear because that's what
people who know us for. But now, you know, they
built up a pretty big, plus size business, and so
they think that if any of these VR applications not
(16:55):
even hit it big, but just sort of make you know,
buying apparel at Walmart a little bit easier or a
little bit cheaper, or just a little bit more cooler,
then that's a huge lift to a business that needs
a lift um right now, because it's one of the businesses,
along with home decor, that Walmart e commerce is trying
to build up. And you've seen it of course with bnobos,
(17:16):
the acquisition of bnobos Modcloth and the recent partnership with
Lord and Taylor, um, which you know struck a lot
of people. Is surprising, you know, why would these two
companies ever get together? Um? But this is all a
part of Walmart's effort to be more relevant, to be
where the shoppers going to get deeper into categories, you know,
beyond food, where they clearly are number one, but they
(17:38):
need to have that same sort of expertise in other areas. UM.
So you know, we're not going to see it next year,
but you might start seeing it in selective stores. You know.
Walmart like everybody else, has concept stores or next generation
stores where they can test out stuff. UM. And it
may not look exactly like it looks today, of course,
but that's all part of the sort of experimentation you know,
(17:59):
culture or of of tech. It's not just virtual reality.
Walmart Store number eight's working on other kinds of tech
that the group says could also change the game. There
are quite a few technologies and some more on the
near term horizon and some on the longer term horizon
that we think, you know, have the potential to transform retail. UM.
(18:21):
Artificial intelligence I think is underlying probably anything and everything
we're doing, and there's different ways to use it. I mean,
it has a big play in virtual reality as well,
with voice and recommendations and things like that. With in
a hands free world. We were interested in robotics and
what that can do for fulfillment and other other pieces
of the sort of non customer facing experience and and
(18:43):
maybe honestly customer facing as well. UM Autonomous vehicles and
drones are also very interesting is what that can do
to the supply chain. UM So, so really the spectrum
is pretty broad. I think for us it's about coming
up with our different strategies as to Okay, we all
agree that these have the potential to truly transform the
(19:05):
business and move the needle. But for us now it's
a conversation around prioritization as well as strategy. Right, some
of these things, we might realize it's gonna have a
huge impact, but it might not make sense for us
to build it. It might make sense for us to
buy it, and it might make sense for us to partner,
And so that build by partner decision is actually a
key part of the strategy, along with actually setting up
(19:28):
a company and infrastructure to UM to go after these technologies.
You kind of have to do all of those decisions
collectively before you you really you really pull the trigger.
I think it's an interesting time to cover this space
because you know, you don't just have these dinosaurs all
dying off. You at least have one dinosaur who's saying,
(19:48):
you know, I'm going to try to reinvent myself here
and if I have to throw a swanky party in
the Hollywood Hills, you know um to do that, then
so be it. That's it for this episode of Material World.
(20:10):
Thanks for listening. For more episodes, find us on Apple Podcasts,
the Bloomberg Terminal, or wherever you listen to shows like this.
For more of our regular coverage, I'm on Twitter at
l c Rupp and Jenny's at Jenny m. Kaplan. Matt
Boyle is at biz Boil. Material World is produced by
Magnus Hendrickson and Liz Smith. Francesca Levy is the head
(20:32):
of Boomberg Podcasts. We'll be back in two weeks. Yeah,
(21:03):
let's hear it for virtual reality.
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