What Walmart’s new ‘cloud factory’ means for the future of retail

Is Walmart a retailer that helps you “Save money. Live Better”? Or a global tech titan? It depends who you ask.

Your neighbor may view Walmart as their way to feed and dress their family. But Walmart CEO, Doug McMillon, considers the Fortune #1 retailer a “technology company” focused on creating tech-empowered shopping experiences that remove friction from the way customers interact with the store.

In the past, technology underpinned retail operations and helped retailers get better at what they’d always done. Now tech is at the very center of everything that happens along the customer journey, from browsing to buying to customer support – and every retailer is a tech company.

Just take a look at what Walmart is doing. Over the summer they announced a strategic partnership with Microsoft to accelerate digital innovation. Their goals? Reimagine retail. Build great customer experiences. And leverage their physical stores and their people to their advantage.

Today our partnership took the next big step, announcing a new Walmart tech hub in Austin.

This new hub, slated to open early next year, is a cloud factory that puts the Walmart customer right at the heart. It’s designed to accelerate digital innovation, transform how store associates work and deliver a shopping experience that’s more compelling, convenient and customer obsessed.

And for the first time, Walmart and Microsoft engineers will work side-by-side in a single facility – nicknamed 4.co for its location at Fourth & Colorado streets in Austin – to advance Walmart’s migration to the cloud. The team of about 70 engineers from both our companies will focus first on migrating Walmart’s thousands of internal business apps to Microsoft Azure as its preferred cloud provider.

The team will also build new “born in the cloud” apps such as tools for supplier relations, internal chatbots to make it easier to navigate employee benefits portals, and more. Our collaboration is part of a multi-year journey to modernize Walmart’s app portfolio, build more efficient business processes and decrease the heavy operational expense burden that comes with legacy systems.

What does this mean for the future of retail?

Walmart CIO, Clay Johnson, is fond of saying the company is “people-led and tech-empowered.” They are actively injecting technology all across the company and really pushing the envelope to speed up their digital transformation. For instance:

-         They’re turning data into dollars using AI, machine learning (ML) and Cognitive Services in Microsoft Azure

-         For associates whose job it is to look for that needle in the haystack, ML is helping them power through unstructured text quickly

-         Associates are also using chatbots to find a mentor or get questions answered without making a phone call and sitting on hold – freeing up time to help customers

-         And they’re increasing supply chain resiliency by improving their ability to recover from supplier disruption

Retailers are under incredible pressure crack the code of this new, tech-first, omnichannel environment where consumers are shopping anytime, anywhere and in different ways. Tech has become the beating heart of retail and the future of retail will be born in the cloud and built in people-led, tech-empowered world – much like what Walmart is creating at its Austin tech hub and deploying to its locations around the world.

Because today, every retailer really is a tech company.