Walmart will integrate its technology offerings with Adobe's commerce platform to offer its digital and technology solutions to retailers across the industry, according to a Wednesday announcement.
Retailers in the space will have access to Walmart's cloud-based pickup, delivery and fulfillment services. Customers will be able to access the Walmart-Adobe omnichannel retail tech in early 2022, per an Adobe blog post.
"The clear trend emerging from 2020 is that corporations need to digitally transform their core value proposition and the technology behind this transformation cannot be bought, it must be built," John-David Lovelock, distinguished research vice president at Gartner, said of the partnership via email.
It's clear Walmart wants to operate as a tech organization. Former CTO Jeremy King said so at South by Southwest in 2019. The company also tapped Silicon Valley tech leadership with the hire of CTO and chief development officer Suresh Kumar, and it even launched an incubator for tech innovation, such as data analytics and machine learning.
The retailer has stayed ahead of the trend to digitize corporate value propositions, and now they're taking it to the next level, according to Lovelock.
"Walmart’s operations were improved by their custom built proprietary technology — the first value capture," Lovelock said in an email to CIO Dive. "Now, Walmart is launching a new line of business leveraging that existing investment — the second value capture."
Solutions developed specifically by Walmart could benefit the retail industry. The product substitution AI, for example, requires massive amounts of data to determine how customers perceived substitute products, according to Lovelock. Most technology providers and retailers wouldn't have enough data to train an algorithm like that but Fortune No. 1 company Walmart does.
Walmart touted its tech wins in an earnings call earlier this year. The company ran all of its e-commerce business in the cloud and implemented a machine learning model to optimize markdowns that saved the business $30 million, according to Kumar on the February call.
As vendors craft specialty technologies for niche industries, Walmart takes the reverse approach; it's applying retail-specific knowledge to tech development.
"This announcement mimics Google’s strategy to keep technology open-minded, and allow brands working with Walmart to make their own decisions on how to enable digital commerce and fulfillment," Chelsea Gross, director analyst at Gartner, told CIO Dive via email.
With competition from Amazon and other international e-commerce marketplaces, Walmart joins an alliance with other vendors and brands to ensure that it's businesses grow in a digital-first world, according to Gross.
Strategically, Walmart has placed less priority on traditional retail and a greater focus on digital experiences, according to Retail Dive. The retailer aims to become a one-stop shop to compete with other e-commerce businesses.
"Partnerships will continue across retailers, brands, and vendors: what remains to be seen is whether these digital capabilities in association with this partnership will drive bottom line results for brands," Gross said.