How Walmart is going all out with mobile

Walmart expects 40 percent of its online traffic this holiday season to come from mobile, much of that from people shopping on their phones while they're inside one of its 4,000 stores.

Walmart mobile chief Gibu Thomas (right); Dan Schulman of American Express (middle).

TUSCON, Ariz.-- Here's the takeaway from a panel called, "Shopping Outside the Box: The Intersection of Data and Dollars," that took place at the Techonomy conference: For all retailers -- that means brick-and-mortar giants -- it's all about the data.

"Data is the weapon," said Dan Schulman, the Group President of Enterprise Growth at American Express.

And, increasingly, that data is coming from mobile devices. The challenges facing brick-and-mortar stores are only growing as online shopping moves from the desktop to smartphones. People look up prices online while they're inside a store. They make purchases from an online store unconnected to the store where they're roaming the aisles. The list goes on.

Walmart's app is customized for each store. Walmart

This is why Walmart -- a company known far more for its data mining and supply chain mastery than for its mobile apps -- is going all out with mobile. The idea is not to make it an either/or option; instead, Walmart's apps cater to people who are first and foremost shopping inside a Walmart store.

"Almost every facet of our lives has been transformed by a smartphone," said Gibu Thomas, the senior VP of mobile and digital for Walmart Global eCommerce. "But when you walk into a store -- and that's where over 90 percent of retail happens -- it's like this place that is stuck in time. The possibility of mobile bringing the Web to the store is incredibly disruptive."

The latest version of Walmart's iPhone app, which I talked about with Thomas after his panel, includes something called "in-store mode," which is available for the iPone and coming soon for to Android phones. That's the key feature aimed at keeping Walmart shoppers buying from Walmart, even when what they want isn't in the store and a rival outlet is just a few taps away in the palm of their hands.

If you opt in, Walmart will use your location to provide you with an app designed specifically for that store. Head to another Walmart and your app will work for that store. It has useful features: You can make a list by speaking into the phone. You can search a product by typing in a word or phrase -- tissues, say, or light bulbs -- and the app will show you what aisle to go to. It has an interactive map. It shows you promotions specific to that store. And Walmart is testing a feature called "Scan & Go" that would you scan can items as you shop, so you can go quickly through self-checkout.

Perhaps most importantly, the app lets you easily buy an item online that you don't find in the store. So if you're shopping for a pink bike, and the store you're in only has it in blue, you can tap on the app and instantly order the pink bike.

The result: Two weeks after Walmart launched "in-store mode" with its app, roughly 60 percent of its shoppers opted to use it. Moreover, about 12 percent of Walmart's sales that come through its app are coming from customers who are inside a store and using "in-store mode." It works in all of Walmart's 4,000 U.S. stores.

"We're trying to make a seamless experience," said Thomas.

One that, naturally, protects and contributes to the bottom line. Thomas said he expects 40 percent of Walmart's online traffic this holiday season to come via mobile devices, which is about three times what it was last year.

"Walmart is not sexy to talk about in Silicon Valley," said Thomas. "But we have 140 million weekly shoppers in the U.S. That is Internet scale in an offline world."

Updated at 8:15 a.m. PT to add that one feature in the app is still being tested.