The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
The retail chain will deliver specialty food items called Goodies.
A box of surprise food items called Goodies delivered to consumers’ doorsteps once a month for $7 a pop represents the latest e-retail creation from @WalmartLabs, unveiled today. The chain’s research division was formed after its purchase of social and mobile technology company Kosmix in 2011.
Consumers sign up for the service not on Walmart.com but at Goodies.Co. After consumers sign up, their names are placed in line to receive an invitation to join the Goodies community.
Once a consumer receives her invite and signs up, she will receive her first Goodies Co. box within a few weeks and a different assortment of goodies monthly. Each month has its own theme. October, for example, focused on Halloween treats and included such items as Shelia G’s brownie brittle and Dang-branded Toasted Coconut chips. To fit with Thanksgiving, this month’s package theme is Easy Entertaining and includes gourmet foods such as wine biscuits, pumpkin soufflé mix, dark chocolate-infused Quinoa bars, and white cheddar popcorn. Consumers can cancel their subscription at any time with no penalty.
The $7 price tag, which includes taxes and shipping, typically contains an assortment of items that combined would retail for at least twice as much, says Ravi Raj, vice president of products for @WalmartLabs, which has about 400 employees who focus on social, mobile and retail projects for Wal-Mart Stores Inc. If consumers like the products, they can go on to Goodies.co and buy full-sized versions, Raj says. Most of the goods, which range from healthy and organic to artisan and ethnic foods, are not sold in Wal-Mart stores, Raj adds. The delectables arrive in a gift box with a colorful information card that describes each item in detail.
Wal-Mart, No. 4 in the Internet Retailer Top 500 Guide is placing a strong emphasis on social and sharing with Goodies, which has been in private testing for the past few months with more than 3,000 subscribers. Consumers are encouraged to head to Goodies.co once they receive their package and leave a review of the box and its contents, post a picture or rate the box. The subscriber earns loyalty points for each of those actions that they can redeem for a free box of Goodies.
“We were looking at the social shopping space for a new business model because we feel there is a lot of room to innovate in that space,” Raj says. “Food is really fun and naturally social—people blog about it and share recipes and reviews. Great value combined with a community of food lovers and the sheer surprise of what a box might hold makes Goodies Co. a compelling offering.”
To help determine each month’s assortment, Wal-Mart employees can sample the contenders weekly in a special tasting lab and leave reviews, Raj says. He says Goodies.co at some point will likely take suggestions from consumers to help it decide what to include.
Sucharita Mulpuru-Kodali, vice president and principal analyst at Forrester Research Inc., thinks the goal of the program in part may be to give smaller marketers some opportunities to have cheaper ways to launch new products. "I think it's essentially a break-even sampling program," she says.
Susan Etlinger, an analyst at research advisory firm Altimeter Group, says Wal-Mart may be trying to gain insight on customer preferences and also trying to see if social sharing actually leads to sales. The program could show Wal-Mart the kinds of products that are most widely shared and the social platforms that have the broadest impact on sales, she says.
"After several years of fairly crude attempts at social commerce, the goal now is to better understand how social platforms contribute to the commerce experience; not only in hard dollars but in insights that can improve productivity and the customer experience," Etlinger says.
Goodies Co. is the latest project from @WalmartLabs. In the last year, the unit unveiled Polaris, a search engine for Walmart.com that displays higher in search results items that are selling well, generating buzz on social networks or attracting good reviews. The research team also created Shopycat, a Facebook application that culls the posts and Likes of a consumer’s friends on the social network to present gift recommendations from Walmart.com and other e-retailers.