Wal-Mart Purchases Social Media Firm Kosmix
June 21st, 2011 by
It appears that behemoth retailer Wal-Mart intends to push further into the world of social media after buying the SM firm Kosmix for an undisclosed sum of money (although its rumored to be $300 million) as of Monday, June 20th. Wal-Mart has announced that the Kosmix team will be heading up a new project called @WalMartLabs that will create businesses around shopping online or with your smartphone. You can read more in detail about the changes here.
In regards to the purchase, Wal- Mart chief executive Mike Duke issued a statement in which he mentioned his priority for the year was to turn around same-store sales at the U.S. discount chain.
What do these changes mean for Wal-Mart, competing brands, and the consumer?
Wal-Mart clearly intends to follow the path of social commerce in order to evolve. Consumers are more frequently communicating through social media sites such as Twitter and Facebook, and it’s believed that these conversations are true to the ones people have in real life. If texting, Facebooking and Tweeting have become the consumer’s preferred language, then it makes sense that retailers have to learn to speak it in a way that genuinely engages the consumer, or risk being left behind.
Kosmix investor and Lightspeed Venture Partners Managing Director Ravi Mhatre makes the point eloquently in his comment on social media’s influence on retail. “If I’m in Best Buy with my smartphone, Amazon can know I scanned the barcode for a DVD player. If I’m Amazon, I can serve an ad for the same product at 30% off,” Mhatre said. “I’m going to hit one button on my phone and save money, while Best Buy is handling all the inventory in a physical store.”
What do you think we can expect next from Wal-Mart? What would make you pay more attention to them in a social media context?
