Retail Customer Experience Set to Change

In a deal seen as potentially game-changing for major retailers, Walmart, the world’s biggest retailer, has acquired Kosmix, a social media monitoring and analysis company. Reports put the price tag of Wednesday’s purchase at $300 million. The real price, though, could be that paid by other do-all retailers like Kmart and Target, who may be forced to play catch up.

"WalMart is going to leapfrog into social and mobile commerce," said Ravi Mhatre, Kosmix investor and Lightspeed Venture Partners Managing Director, in an interview with the Wall Street Journal. "All of these traditional retailers are going to need to evolve or die. I think social media and mobile are going to completely change the game."

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Specifically, Kosmix is a company devoted to establishing a platform called the Social Genome. The social media monitoring platform wades through the inundated social media market and attempts to parse its meaning.

"The Social Genome builds rich profiles of users, topics, products, places and events," Kosmix wrote on its blog regarding the deal with Walmart. "The Social Genome enables us to take search, personalization and recommendations to the next level."

The blog gives the example of a Tweet reading, "Loved Angelina Jolie in Salt." The Social Genome breaks the Tweet into three components – the user who wrote the tweet, actress Angelina Jolie and the movie Salt. It then files that information into each of those three profiles. Compounded many times over, across many social media channels, trends will start to develop regarding those three components in their profiles.

Currently, the Social Genome platform powers three sites that Kosmix operates – TweetBeat, which filters social media information for live events, Kosmix.com, which lets you search by topic for social media information, and RightHealth, a medical information site. Together, the three sites drew 17.5 million unique visitors in March.

According to Walmart’s press release about the purchase, the company plans to integrate the Social Genome platform with its @WalmartLabs team, which will work to integrate the in-store and online shopping experiences.

"Social networking and mobile applications are increasingly becoming a part of our customers' day-to-day lives globally, influencing how they think about shopping, both online and in retail stores," said Eduardo Castro-Wright, Walmart’s vice-chairman, in a statement.

One likely result of this integration, for example, is that an in-store customer would be able to scan a product’s barcode with a smartphone and instantly be given individually-tailored information about that product and related products.

Mhatre used the example of a customer in the market for a product available at both Best Buy and Amazon.com.

"If I’m in Best Buy with my smartphone, Amazon can know I scanned the barcode for a DVD player. If I’m Amazon, I can serve an ad for the same product at 30 percent off," Mhatre told the Wall Street Journal. "I’m going to hit one button on my phone and save money, while Best Buy is handling all the inventory in a physical store."

Walmart’s acquisition is an attempt to not lose business in this fashion. In the process, though, it may change the customer experience at large retailers everywhere.