Wal-Mart overpaid for Kosmix, but bet on commerce's future necessary

Summary:Wal-Mart's purchase of social and mobile e-commerce company Kosmix spurred a few questions, but the retailing giant had little choice. The future of retailing is at the intersection of social and mobile and Wal-Mart couldn't be left out.

Wal-Mart's purchase of social and mobile e-commerce company Kosmix spurred a few questions, but the retailing giant had little choice. The future of retailing is at the intersection of social and mobile and Wal-Mart couldn't be left out.

In that context, the reported $300 million price tag for Kosmix via Kara Swisher doesn't look so nutty. Why? Let's look where retail is going.

Simply put, every technology player has some spin on the future of retail. The bottom line for these players all boil down to a mash-up of brick, mortar, e-commerce, social and mobile.

Now it's very easy to file this stuff away into the vendor-speak category---until you layer in a few anecdotes. Real people are using these apps, QR codes and smartphones to improve their shopping experience.

For instance, I got a physical Friday. I'm hooked up to the heart monitor to get my resting rate checked. Generally speaking, I want my heart rate low enough so the nurses are looking for paddles. Instead, the nurse, who also sells real estate, is yapping nonstop about QR codes and how they will enable real estate sales. She's talking apps. She's talking smartphones. She's talking $500,000 plus homes. I blocked out most of this rambling---since it'll only get my heart rate up---and ended up with a rate of 50. If she weren't talking tech I could have gotten down to 45. The point: This nurse isn't some Silicon Valley bubble head.

At Lowe's recently, QR Codes were being checked on a faucet purchase. Go to any retailer and you'll see the same thing. Real people. Real money. Real apps.

Now let's fast forward to Wal-Mart. Wal-Mart has a decent e-store. It has in-store pickups. What Wal-Mart didn't have is a app, mobile and social strategy. Kosmix can bring that to the table. Add it up and it makes no sense for Wal-Mart to sweat a few bucks when it needs to stay relevant in an emerging commerce world.

Topics: Mobility, Enterprise Software, Hardware, Smartphones

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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