Editor’s note: Cameron Smith is the owner of Cameron Smith & Associates, an executive recruitment firm that has worked to lure Wal-Mart suppliers to Bentonville since 1992. His guest commentary appears courtesy of The City Wire’s Supply Side series.

In the supplier community that circles its wagons around the Walmart corporate headquarters in Bentonville, change is constant.

Ten years ago companies like Heinz, Pepsi, and Kellogg’s had teams on the ground in Northwest Arkansas to support their biggest retail client. But it was rare and quite progressive if they had their own IT support crew here versus relying on corporate-based technology resources.

BIG DATA GOES DIGITAL
Back then, sophisticated point-of-sale systems like Walmart’s Retail Link, together with the supplier’s own logistics systems, made sure that every item made it onto the shelves at Walmart at just the right time consumers needed them. Those systems were the key to managing Big Data in the retail space.

That was before Facebook. That was before the iPhone.

Today the traditional shopping model (or “path to purchase” as the CPG and retail experts call it) has been completely turned on its head now digital has taken center stage as the new shopping buddy of choice.

WALMART LABS
As a backdrop to this trend, Walmart itself recognized that in order to aggressively compete with its Public Enemy #1, Amazon, it had to think differently.

In 2011, it purchased a prominent startup in Silicon Valley named Kosmix that was fueled by the same thought leadership that created the Amazon smart shopping algorithms that knew you would like a business book by former General Electric CEO Jack Welch if you had just purchased Season 3 of Mad Men.

Kosmix also created a unique model of being able to take any physical location (be it a residence or business) and derive what people were “liking” on Facebook and tweeting about all around that particular site.

Given the thousands of locations that Walmart has around the country, this model was a natural fit to understand and take action on what the digital chatter was around each store and if there were hot items that should be on the shelves way ahead of when a buyer might have put them there.

Now that the social and mobile teams are rolled up into Walmart Labs, in order to stay innovative the new Walmart venture has continued to purchase random startups all over the country to fuel innovation on how digital can not only be its own ecommerce channel as a complement to brick-and-mortar locations, but also a DRIVER to in-store traffic.

STARTUP MINDSET
Fast forward to the beginning of 2013, on the heels of a 2012, when smartphone ownership shot past 50% nationwide. The suppliers who make the everyday items in a family’s cupboard are waking up to the fact that a Super Bowl ad, a few rollbacks throughout the year, a quarterly coupon in Sunday morning papers, and slick in-store displays are just not enough anymore to guarantee consumer attention and loyalty.

Social, Local, and Mobile (SoLoMo) efforts are creeping into the Marketing budgets of aggressive CPG companies at astounding rates. As in the case with Walmart during the “Labs” inception, these companies are working with their agency partners, hiring outside talent, or contracting with specialists to form a network of incubators, venture capitalists, and technologists from multiple disciplines as they search for digital approaches to assist their brands in breaking through the emerging mobile floodgate.

THINKING LIKE A STARTUP
The “Startup Mindset” will become the currency for doing business with Walmart and Sam’s Club moving forward. Recent press from companies such as Unilever, Mondelez, and P&G working directly with startup talent supports this mantra articulated by Steve Jobs (“think different”) himself:
• Curiosity – Startups attract people who are curious by nature. These individuals wonder why things are the way they are and constantly think about how to make things better.

• Focus on Possibilities – Startups capitalize on opportunities that others miss. Entrepreneurs bring imagination and a fresh perspective that allows them to see possibilities where others might see only a problem.

• Disregard for Status Quo – Entrepreneurs resist the status quo. Curiosity and imagination fuel their momentum and keep them moving forward.

• Conquer Fear – Entrepreneurs are risk-takers, able to overcome fear and focus on the task at hand. By being able to communicate a vision, they lead others to set aside their own fears and join in a new venture.

• Speed – A quick and hungry startup can challenge much larger, more established companies. In a David and Goliath matchup, the smart little guy with a sense of urgency can stand up to a giant.

Thinking like a startup keeps ideas fresh … and in the hyper-competitive world of retail, Walmart will continually challenge its flagship suppliers to embrace change and learn how to reach its wide consumer base differently … even if we as parents have to start paying much closer attention to what our kids are doing to interact with their favorite brands online or on a mobile device!

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The City Wire Staff