Walmart makes shocking store closure decision

Walmart paid $3.3 billion in 2016 to buy Jet.com, a fledgling digital retailer that had spent a lot of money, but not generated much in the way of sales.

It was a curious move at the time, and many Walmart executives were against the move, but CEO Doug McMillon understood how far his chain had fallen behind Amazon. The purchase was not about owning and operating Jet.com as Walmart shut the company down about three years later.

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Instead, you could argue that Walmart (WMT) - Get Free Report paid all that money in order to hire serial entrepreneur Marc Lore. The genius behind Diapers.com, which Amazon purchased from him, Lore understood the digital future in a way that Walmart executives simply did not. 

McMillon acknowledged that the acquisition would be leveraged to speed up Walmart's digital evolution.

“We’re looking for ways to lower prices, broaden our assortment and offer the simplest, easiest shopping experience because that’s what our customers want,” he said. “We believe the acquisition of Jet accelerates our progress across these priorities. 

He shared that the deal would help Walmart.com grow faster and that it would inject "another jolt of entrepreneurial spirit being injected into Walmart.”

That's essentially what happened. Lore pulled Walmart into massive infrastructure and digital investments. He also created a special store deigned to test out those innovations before rolling them out more broadly.

Walmart had an innovation store 

Lore, who served as CEO of Walmart's e-commerce business, launched Store No. 8, a special location designed to be an incubator of new technology. And, while you may not think of Walmart as an innovative chain, it has actually been a pioneer in same-day delivery and buy-online-pickup-in-store (BOPIS) which are huge innovations. 

When Store No. 8 opened in 2017, Lore shared that it would help build "startups that have a responsibility to change the course of retail,” not just in the immediate future but five and 10 years down the road, RetailDive reported.

The store has a website, where it explains its purpose.

"We focus beyond the horizon to identify transformative opportunities. We are fearlessly curious and work to boldly reimagine what’s possible. We build together with our Walmart associates as well as external partners. We lead with humanity and act with integrity because people are at the center of all we do," the company shared.

That's a noble goal that in its seven years of existence has led to meaningful changes in Walmart's stores in including its text and voice shopping options. It has also sent hundreds of employees moving from the innovation hub into regular locations.

Walmart has decided to to close that location and Scott Eckert, an executive vice president who led the unit will leave the company, according to an internal memo. 

Walmart closing its innovation hub

Walmart has decided to close Store No. 8 and split its previous tasks between the rest of the chain. There does not appear to be a specific person in charge of innovation at the chain which was famously resistant to digitally-driven changes before Lore arrived.

Lore, and the the top executives he brought with them have largely moved on from Walmart. Store No. 8 took a people-driven approach to creating new technology.

"Innovation begins with people. It’s not only our technology that shapes the future of commerce, but it’s also the brilliant people who build it," the store shares on its website.

Over the summer, Store No. 8 and Outlier Ventures, a leading global Web3 investor and accelerator, launched the Store No. 8  dCommerce Base Camp accelerator program.

"This dedicated accelerator program will help a select cohort of startups focused on building in Web3 to deliver solutions that improve the global retail and commerce experience. The chosen teams will focus on building across areas that include decentralized infrastructure, data and growth solutions, immersive experiences and the metaverse, and the intersection of AI and blockchain technology," Walmart shared.

Walmart did not respond to a request for comment from TheStreet.