The mash-up of retailing and technology commanded the spotlight at the National Retail Federation’s Big Show in New York City earlier this month, giving attendees additional evidence, if any were needed, that in the future the intersection of those disciplines will have a decisive impact on how people shop for, purchase and receive consumer products. Operators from across the spectrum of traditional brick-and-mortar stores were eager to engage in dialogue about the manifold implications of that development and consider ways to maintain the vitality of their existing business while adjusting to customers’ increasing insistence on access to omnichannel options.

It’s a difficult, but necessary, balancing act, one that requires commitment, agility and the willingness to rethink established business practices. Walmart is one of the retailers that has accepted the challenge. Under the leadership of president and CEO Doug McMillon, who spoke about the changing face of the industry during one of the general sessions at the Big Show (see story on page 1), the company has acted quickly to enhance its technology-based capabilities and recast its value proposition for the 21st century. Galvanized by the acquisition of Jet.com in 2016, Walmart has strengthened its presence in e-commerce and developed synergies between its in-store and digital offerings.

While those moves have done a lot in a short time to bolster the retailer’s position vis-a-vis Amazon and other e-commerce companies, Walmart also has its eye on technology’s long-term impact on retailing. In an effort to secure a place on the cutting edge, the company last March launched a tech incubator. Named Store No. 8 after a location in northwest Arkansas where Walmart founder Sam Walton put new retail concepts to the test, the San Bruno, Calif.-based entity is designed to nurture startup businesses that have the potential to transform retailing.

Lori Flees, Walmart’s senior vice president of corporate strategy, who five months ago was asked to oversee Store No. 8, shared insights about the operation during a session at the Big Show. “There is so much innovation going on at Walmart — in our current supply chain, store operations and e-commerce — where the focus is the next one to two years. What we’re trying to do at Store No. 8 is look beyond that to the three- to five-year range. If you don’t fund that kind of innovation early, then you are behind and wind up having to get it from other places and have to shape it to work for your business as well as others.”

The Store No. 8 model involves identifying entrepreneurs with ideas that promise to shake up the retail business and, by becoming their sole financial backer, enable them to benefit from Walmart’s unmatched scale and resources. Thus far, deals have been struck with Jenny Fleiss, best known as cofounder of Rent the Runway, and Google veteran Bart Stein.

“Store No. 8 has been set up as a separate entity with a separate budget and the ability to hire CEOs who create viable business plans,” noted Flees, who indicated that deals with additional entrepreneurs will be announced soon. “It’s very similar to the way an incubator would invest in companies, but the ones we work with are 100% funded and owned by Walmart. Whatever we are creating, we know that ultimately we want to integrate it in our core business and our proposition to the customer.”

With the rapid emergence of technologies, including artificial intelligence, voice-activated shopping, and augmented and virtual reality, that have the potential to rewrite the rules of retailing, it’s evident that with Store No. 8 Walmart is making a smart investment. Although their efforts may take different forms, it’s an example other major retailers should follow.