Wal-Mart (WMT) is creating a startup incubator charged with developing cutting-edge retail technologies as part of a wider drive to modernize its supermarkets and challenge Amazon (AMZN) in the e-commerce sector.

The Store No. 8 incubator in Silicon Valley will foster collaborations between startupsventure capitalists and academics, encouraging the design of robotics, virtual & augmented reality, machine learning and artificial intelligence technology for use in the company’s stores.

According to Wal-Mart, these startups will work independently to encourage them to innovate without feeling the pressure of being part of the world’s largest retailer. This approach should also ensure that the company’s profits are not affected during the development phase, Seth Beal, senior vice-president of incubation and strategic partnerships, said in an interview with Reuters.

To coincide with this announcement, Wal-Mart filed a patent to use drones within its stores. The patent application states that these airborne devices will be used to identify and pick out items, before transporting them to a specified delivery area. Sensors and 3D map technology will be used to ensure that the drones do not run off course and endanger staff.

Marc Lore’s E-commerce Drive Gains Momentum

These latest plans have been spearheaded by Marc Lore, founder of Jet.com, the online store that Wal-Mart bought last year for $3 billion. Under his new job title of chief executive officer of e-commerce operations, Lore has been busy expanding Wal-Mart, which is traditionally known for its dominant position in physical retail, into a digital commerce powerhouse capable of competing with the likes of Amazon. (See also: Is Wal-Mart (WMT) a Threat to Amazon in e-Commerce Space?

Lore told Recode to expect more acquisitions in the future. “We’re behind,” he said. “We need to catch up.” Over the past two months, Wal-Mart bought online stores ModCloth, Shoebuy and Moosejaw to diversify its e-commerce offerings. So far this aggressive approach appears to be working, with digital sales rising nearly 30% during the holidays. (See also: Two Wal-Mart Numbers are Working Against Each Other.)