AP Photo/Jeff Chiu, File
San Francisco - Wal-Mart Stores is creating a technology-startup incubator in Silicon Valley to identify changes that will reshape the retail experience, including virtual reality, autonomous vehicle and drone delivery and personalised shopping.

The incubator will be called Store No 8, a reference to a Wal-Mart location where the company experimented with new store layouts. Marc Lore, chief executive of Wal-Mart’s e-commerce operations, announced the incubator on Monday at the ShopTalk conference in Las Vegas.

The world’s biggest retailer has been overhauling its online team to better challenge Amazon.com with greater selection and lower prices. Lore founded Jet.com, which Wal-Mart purchased in September for about $3.3 billion (R41.8 billion) in pursuit of Amazon in the e-commerce race.

Lore said Wal-Mart has an advantage over “pure play” e-commerce companies because of its large network of stores that attract shoppers for such items as fresh food.

Read also: Wal-Mart wants to welcome you

“Every day, I become more and more convinced about the omni channel advantage,” Lore said, referring to a sales strategy that combines online and in-store shopping.

Store No 8 is the latest example of Lore’s influence on Wal-Mart. In January, Lore announced management changes and a new incubation and strategic-partnerships division. Lore gave more details about the division, including its name and areas of focus, at the conference on Monday.

The incubator will partner with start-ups, venture capitalists and academics to promote innovation in robotics, virtual and augmented reality, machine learning and artificial intelligence.