What Wal-Mart Didn't Say About Its POS Move

Wal-Mart's newest mobile acquisition may be a lot more than the world's largest retailer is admitting. On November 10, the chain announced that it acquired Grabble, a tiny Australian mobile POS startup that can deliver receipts to customers' phones. Wal-Mart also did a good job of scrubbing the Internet of information about what Grabble actually makes: hardware that attaches to POS systems to capture purchases and other customer data in real time, so that information can be used without having to change existing back-end POS software. Mobile receipts are just one obvious application.

It never really made much sense that Wal-Mart would go all the way to Australia for a mobile-receipts startup—that's hardly a new idea. But a box that plugs into a POS, so it's easy to experiment on a store-by-store basis with everything from mobile receipts and coupons to plug-and-play CRM, inventory and analytics systems, sounds like it's worth the trip. And that could explain why Wal-Mart worked so hard to make most details about Grabble disappear.

Wal-Mart didn't officially announce that it acquired the startup, which was reportedly conceived last year in a garage in Wollengong, Australia, and launched in January. The chain's E-Commerce R&D group, Walmart Labs, removed videos demonstrating the technology from YouTube and asked the founders (who are moving to California) not to talk. When news of the Grabble acquisition broke last week, all anyone could say was that the company was developing "point-of-sale systems for mobile phones" that delivered mobile receipts.

Compare that with a pre-acquisition description that Wal-Mart's Internet-scrubbers missed from a LinkedIn company profile: "At the core of Grabble is a hardware device (the 'Grabble box') that can be connected to any point-of-sale system without custom integration. This device captures the items that are purchased and ties them to the customer at the checkout. We use this incredibly valuable data to provide stores with turnkey analytics and loyalty programs for their customers, as well as offering highly targeted deals and promotions to consumers."

No wonder Wal-Mart wanted people talking about mobile receipts. If the "Grabble box" works as described, it could radically simplify POS experiments for Wal-Mart. Instead of modifying back-end transaction software to add new POS features, the box could pipe transaction data off to a different system. That way the retailer could test mobile receipts and coupons in a single store, or a single checkout lane in each of several stores, or only during certain hours of the day.

And all the new transaction magic would be going on in parallel with the existing POS software.And all the new transaction magic would be going on in parallel with the existing (and untouched) POS software. Mobile coupons, expanded loyalty card offers and even promotions flashed on digital signage at checkout time could conceivably be added to a checkout lane in minutes and removed as quickly.

That's a lot more nimble than anyone expects Wal-Mart to be. It has been easy to discount things like the iPhone shopping app that Wal-Mart released last week. It's nice that the app can use barcodes or voice recognition to add items to a shopping list. A year ago that would have been impressive. But a month after the arrival of the latest iPhone—complete with its voice-activated know-it-all, Siri—the Wal-Mart app just seems me-too.

But the ability to do plug-and-play POS experiments falls into a completely different category. By tapping into the POS transaction stream for individual POS units, Wal-Mart should be able to test new checkout concepts very quickly and without touching critical systems. That could mean a lot more low-risk attempts at throwing something new at Wal-Mart customers at the checkout—quick to set up, quick to throw away if things don't work out.

The Grabble hardware might also enable some store-management experimenting. Which end of the line of checkout lanes are customers most likely to hit, and with which types of products? Do those front-and-back express lanes attract customers with different types of items? Never mind filtering huge quantities of transactions from the existing systems—just slap in a few Grabble boxes to sample what's moving through key lanes. A day or two later the boxes could be shifted to different lanes—or a different store.

That ability to sample POS data in real time, and experiment with checkout on the spot, is about as far from me-too as Wal-Mart could get.

Will Wal-Mart actually leverage what the Grabble garage-experimenters were working on? Wal-Mart isn't saying—but that in itself says a lot. There's a reason the Walmart Labs E-Commerce R&D group is half a continent away from Bentonville. Bringing startups in-house and turning their products into things the chain can get into place quickly, cheaply and with maximum impact isn't how a behemoth operates. And when it comes to what Grabble can do, someone at Walmart Labs understands very clearly that this isn't something the chain wants to broadcast at this point, especially to its competition.

Oops.

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