Keeping up with the competition: Retailers take on Silicon Valley

By Anne D'innocenzio

Associated Press

Published: Friday, Nov. 15 2013 6:23 a.m. MST

The company says it's so pleased with its results at Wal-MartLabs that it plans to open another tech office in nearby Sunnyvale in January. It also has smaller tech hubs elsewhere. "We are not a retailer in Silicon Valley," says Neil Ashe, CEO of Wal-Mart's global e-commerce operations. "We are building an Internet technology company inside the largest retailer."

Teen retailer American Eagle opened its tech center in San Francisco in July. The 10,000-square-foot location is filled with movable desks to encourage spontaneous brainstorming sessions among its 20 workers. The goal: to get to know more about American Eagle's customers.

Among its projects is an effort to consolidate the personal data of American Eagle customers, including their shopping history, from the company's email campaigns and loyalty programs. The retailer wants to gain information that would help it better target its marketing around a customer's buying habits.

Executives at American Eagle, which is based in Pittsburgh, say that's just the beginning of the types of technology that could come out of its Silicon Valley center. Joe Megibow, a senior vice president and director of American Eagle's tech center, says he envisions a future when customers can go into the store and have the clerk pull up information on a tablet, such as the shopper's email address and buying history.

Target's focus at its 5,000 square foot office in the historic Folgers Coffee Co. building is more futuristic. The lab, which opened with 20 workers in May, is looking at how wearable gadgets like smart watches — computerized watches that communicate with smartphones — can be used in its stores.

Additionally, Target, which is based in Minneapolis, is experimenting with a mobile app feature that would allow customers to call up information like whether certain cereal is gluten-free by taking a photo of the box with their cellphone camera.

None of the projects at Target's lab have made it to shoppers yet, but David Newman, director of the center, says the goal is to test "the unexplored and underexplored."

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Follow Anne D'Innocenzio at www.Twitter.com/adinnocenzio

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