By Lauren Sherman. Source: Business of Fashion.
Since Jet.com co-founder Marc Lore joined Walmart as its chief executive of e-commerce after it was acquired by the big-box behemoth in September 2016 for about $3.3 billion, he has wasted no time working to shape Walmart and Jet’s combined presence into a real competitor to Amazon, which dominates e-commerce sales in the US and in many countries abroad.
So far under Lore’s watch, Walmart has acquired multiple apparel and accessories retailers, including Modcloth, Shoebuy and is reportedly eyeing Bonobos.
In March 2017, Lore announced that Walmart would launch Store No 8, a Silicon Valley-based tech incubator with the intention of creating businesses that “bring radical innovations to the physical, digital and virtual retail experience,” which can mean anything from efficiency-driven drone delivery to actually useful applications of virtual reality.
The startups within the incubator will be wholly owned by Walmart with access to the company’s resources, but executed with an entrepreneurial spirit.
Perhaps that’s why Store No 8 executives Seth Beal and Kate Finnegan chose Rent the Runway’s Jennifer Fleiss to lead its first effort, a stealth operation called Code 8, which will develop “high personalised, one-to-one shopping experiences.”
The big mission is to make shopping magical and enjoyable for consumers. There isn’t as much magic in online shopping today.
Fleiss, whose team will be based in New York, officially exited Rent the Runway in March as it readies for an initial public offering. (She co-founded the clothing-rental startup, which most recently raised $60 million in a Series E funding round in December 2016, with chief executive Jenn Hyman at Harvard Business School in 2009.)
“I have missed the earlier stages of starting a business for a couple of years now,” Fleiss told BoF in an exclusive interview. She has been working on Code 8 since the end of March, hiring a team of engineers and executives tasked with examining the pain points that exist in modern shopping and addressing them through technologies such as machine learning and natural language processing. “The big mission is to make shopping magical and enjoyable for consumers,” she explained. “There isn’t as much magic in online shopping today.”
What types of products that “big mission” will result in is not clear. While it won’t disclose the amount of funding Code 8 or subsequent businesses within the incubator will receive, Walmart has given Fleiss what seems like carte blanche to iterate and experiment. “I think there will be pieces that we will showcase within the next year or two, but they’re letting us innovate, pursue new ideas and tech without the constraint of short term performance,” she said. “There’s a longer term view that’s being applied here.”
“The mandate is to look at things that are nascent, but have potential to be operationally viable in three, four, five years,” said Finnegan, who met Fleiss when she was running her own startup, the now-defunct shopping tool Hukkster. “Solutions or experiences that the customer didn’t realise they needed but can’t live without once they experience them.”
As for Walmart, “We are here to provide a sounding board, needs and expertise,” said Beal, who noted that he, Finnegan and Lore all sit on the Code 8 board. “Jenny gets to drive.”