Brick-and-mortar stores seeking out tech startups
There is no question that the internet has changed how customers shop. However, it has also affected the companies trying to cater to their needs, and an online presence is more important than ever before.
Home Depot started following the model of other retail giants by partnering with technology startups. In an effort to keep pace with online competition – eBay and Amazon – more stores are seeking out smaller companies to help them expand their online services. The creations of "technology labs" are becoming more popular.
In 2011, Walmart created @Walmart Labs, a Silicon Valley tech shop made up of nearly a dozen startup acquisitions. Home Depot, Nordstrom Inc. and Neiman Marcus Group Inc. are expanding their e-commerce operations by investing in sites that offer limited-time "flash sales."
"Gone are the days where we're building 50 to 200 stores a year," Hal Lawton, a senior vice president at Home Depot, told the Wall Street Journal. "We're shifting that capital to technology that can help us advance our business at a much faster pace."
Last week Home Depot announced that it had acquired Black Locus Tuesday, a company that uses algorithms to help retailers sell their wares on the Web. Renamed the Home Depot Innovation Lab, officials said the move will help the business keep its online prices competitive in a market where the numbers can change quickly.
The Wall Street Journal added that Target and Kohl's have both started placing top executives in tech havens like Silicon Valley and Austin, in an effort to meet everyone from entrepreneurs to venture capitalists or bankers.
Examples like this are further proof why heads of smaller technology companies should have a firm grasp on their financials. That way, if a business opportunity comes along, it will be much easier to create a comprehensive acquisition strategy. With more businesses wanting a strong online presence, a technology acquisition could be an ideal option for small and large organizations alike.