Walmart Revs Up its RaaS Engine

One emerging area of the broader SaaS universe that we continue to track is retail-as-a-service (Raas). Led by  companies such as Standard, the sector aims to democratize and productize advanced retail functions like cashierless checkout. Amazon is keen on RaaS as we’ve examined (more on that in a bit).

The latest news from the RaaS world is that the king of physical retail, Walmart, has joined the competitive fray. It’s spinning out many of its semi-recent retail innovations to enable third parties to raise their retail game. This includes eCommerce and physical retail functions.. and areas where the two intersect.

For example, Walmart’s RaaS offering will help small and medium-sized retailers offer advanced functions like curbside pickup. That includes displaying pickup eligibility, available times, and order fulfillment logistics. The latter includes things like employee-facing alerts about fulfilling new orders and customer ETA.

The cherry on top of the offering is the ability to syndicate online products across Walmart’s marketplace. This part of the deal aligns with an ongoing trend where Walmart is trying to beef up its Marketplace to compete with the scale of Amazon product catalog. It recently partnered with Shopify to do just that.

Will Retail-as-a-Service Transform Local Shopping?

Raising the Retail Game

As for how Walmart will roll all of this out, it will sell it directly through its GoToMarket division, but its primary channel will be in partnership with Adobe. Specifically, the new offering will be baked into Adobe’s commerce software suite — available to Adobe Commerce and Magento Open Source users.

Given the nature of this integration, the deal serves Adobe in that it boosts its value proposition to new and existing Commerce Platform users. Meanwhile, Walmart clearly benefits in accelerating its market penetration by immediately reaching thousands of small and mid-sized retailers on Adobe’s platform.

This approach could also be more effective than selling directly. That’s simply because Walmart is inherently conflicted in selling enablement software to retailers. Besides conflict, any potential buyers — particularly smaller retailers — could be hesitant to support Walmart. Adobe obscures that to a degree.

But more than all of the above, this is about revenue diversification. The thought is that investments in technologies to raise its own retail game can now be monetized in SaaS fashion. Walmart has ample value to offer here, as it has accelerated its tech investments in the recent past… partly to catch up to Amazon.

Amazon’s Next Trojan Horse, Part II: Touchless Payments

Connect the Dots

Speaking of Amazon, it’s likewise keen on RaaS, as noted. This includes its “just walk out” cashierless technology that was incubated in Amazon Go stores before spinning out as the centerpiece of its RaaS play. It also has its Amazon One palm scanner, and other veritcal experimentation such as smart salons.

Connecting all the dots, Walmart’s direct points of competition with Amazon continue to ratchet up. Besides this new RaaS play, Walmart’s eCommerce growth ambitions mentioned above are a direct shot at Amazon. But it has a ways to go as its estimated 100,000 sellers is dwarfed by Amazon’s 6.3 million.

The Adobe-integrated RaaS play is a step in the right direction. We’ll watch closely to see how it plays out in Walmart’s broader efforts to out-digitize Amazon. Meanwhile, Adobe Commerce users in the U.S. will be able to integrate Walmart’s RaaS offerings early in 2022, with pricing info available at that time.

Stay ahead of the curve and get the latest on Local straight to your inbox.

By submitting this form, you agree to receive communications from Localogy. You can unsubscribe at any time.

Related Resources

Snap Accelerates the Rise of Shoppability

Snap’s latest move is “catalog-powered” lenses. These build on its signature AR lens format with a purpose-built format for shopping. Will this accelerate the ongoing “shoppability” trend?

Amazon Carries the RaaS Torch Into Fashion

After piloting Just Walk Out at Amazon Go, airport-based convenience chains, salons, grocery and even Starbucks, Amazon has now tipped its hand for the next move: clothing stores. We examine the strategic implications.