The Wal-Mart story is very unique. Sure, many other retailers capture consumer data to gain a better understanding of their shoppers, but Wal-Mart has the most data by far. Wal-Mart has the most shoppers, the widest range of shoppers in terms of income and socio-economic level, and a top-notch system to capture these shoppers’ information.
Given the enormous amount of data that Wal-Mart captures, do you think they have been successful at converting it into an experience that serves as a competitive advantage for them?
I believe that Wal-Mart has done an excellent job at using their data. Before anyone else, Wal-Mart understood that all this data represented a competitive advantage: the ability to predict customer buying behavior. From this data, Wal-Mart created a buying experience that gives customers exactly what they need, when the need it. For example, through data mining Wal-Mart figured out that Pop-Tart sales soared right ahead of a forecasted hurricane. Of course, Wal-Mart inferred that consumers wanted to have Pop-Tarts for whatever reasons during a hurricane and over stocked their stores with Pop-Tarts. Yes, Wal-Mart was trying to profit, but they also converted this data into a more meaningful buyer experience for its consumer by stocking the store with the exact items it knew they wanted. They didn’t run out, and thus the consumer was a happier shopper.
What makes Wal-Mart so powerful it their ability to predict exactly what certain customers expect and need in specific situations. In recent article on Wal-Mart’s data gathering, the author points to another good example of how WM is creating a meaningful buyer experience. In certain countries and markets Wal-Mart’s data indicates that shoppers have a particularly hard time at the end of the month. Wal-Mart helps these low income shoppers get through hard economic times by offering different pack sizes by time of month because of their paycheck cycles. For example, there are some global markets where Wal-Mart offers individual diapers because large packs are not affordable during certain times of the month. This proves Wal-Mart’s attention to detail and success at creating a buyer experience gives them a competitive advantage.
What do you think about the privacy issues associated with all of that data and the amount of personally identifiable data they are able to capture. Does it bother you? Do you trust them with it?
The fact that Wal-Mart has so much data is a bit frightening. Wal-Mart consumers want to assume that Wal-Mart will only use our data in good health, but there is no way to be sure. Although the article points out that Wal-Mart no longer sells their data to outside companies such as ACNielsen who in turn sold it to retailers, they did at some point (that data is lost), and there is no way to know they won’t do it again. Most consumers never even blink an eye when giving the cashier their credit card. However, with one swipe, Wal-Mart is capturing private data that can lead to information such as access what they paid for their house, and their mortgage. The privacy issues bother me, especially because consumers have no idea that their data is being stored and are never asked for consent. I recently read about Wal-Mart’s use of RFID tags. These tags are used for maintain inventories that reflect customer demand better. However, people are concerned that the RFID could scan customers without their knowledge. Some states have new licenses that have RFID tags, which might allow retailers to scan their license without knowing and obtain private information. It bothers me a little, however, I feel like people can find just as much information online or more. Today, it’s impossible to hide personal information. There are people out there who are much more skilled at finding our information than most consumers are at hiding their information. Because Wal-Mart has so much at stake, I trust that they have invested the best technology and do everything possible to protect the data of their customers. If they didn’t, they would be getting into a lot of lawsuits that could severely damage their reputation.
What impact do you think they are having on their suppliers - making them better and more efficient or driving them too hard and reducing their profitability.
In relation to RFID, Wal-Mart is encouraging its suppliers to take part in the change. It first required suppliers to invest millions of dollars to comply with Wal-Mart's drive to have every carton and palette it receives carry a RFID tag. From the beginning, I think Wal-Mart was driving their suppliers a little hard to use RFID tags. Many suppliers hadn’t budgeted for this expensive new technology and could not immediately see the benefits. However, in the end I believe that the RFID technology will benefit the suppliers and make them more efficient. Wal-Mart’s suppliers will have a lot more data on the movement of their products. Suppliers will know when goods have arrived and be able to tell what is on hand, on sales floor and back room. I believe that this enables suppliers better demand signals for forecasting. I think that suppliers are waiting to see if there is in fact a return on the investment and then will make their decisions. In the end, suppliers are most likely benefiting in the long run more than it is costing them to implement the new technologies required by Wal-Mart.
Given the enormous amount of data that Wal-Mart captures, do you think they have been successful at converting it into an experience that serves as a competitive advantage for them?
I believe that Wal-Mart has done an excellent job at using their data. Before anyone else, Wal-Mart understood that all this data represented a competitive advantage: the ability to predict customer buying behavior. From this data, Wal-Mart created a buying experience that gives customers exactly what they need, when the need it. For example, through data mining Wal-Mart figured out that Pop-Tart sales soared right ahead of a forecasted hurricane. Of course, Wal-Mart inferred that consumers wanted to have Pop-Tarts for whatever reasons during a hurricane and over stocked their stores with Pop-Tarts. Yes, Wal-Mart was trying to profit, but they also converted this data into a more meaningful buyer experience for its consumer by stocking the store with the exact items it knew they wanted. They didn’t run out, and thus the consumer was a happier shopper.
What makes Wal-Mart so powerful it their ability to predict exactly what certain customers expect and need in specific situations. In recent article on Wal-Mart’s data gathering, the author points to another good example of how WM is creating a meaningful buyer experience. In certain countries and markets Wal-Mart’s data indicates that shoppers have a particularly hard time at the end of the month. Wal-Mart helps these low income shoppers get through hard economic times by offering different pack sizes by time of month because of their paycheck cycles. For example, there are some global markets where Wal-Mart offers individual diapers because large packs are not affordable during certain times of the month. This proves Wal-Mart’s attention to detail and success at creating a buyer experience gives them a competitive advantage.
What do you think about the privacy issues associated with all of that data and the amount of personally identifiable data they are able to capture. Does it bother you? Do you trust them with it?
The fact that Wal-Mart has so much data is a bit frightening. Wal-Mart consumers want to assume that Wal-Mart will only use our data in good health, but there is no way to be sure. Although the article points out that Wal-Mart no longer sells their data to outside companies such as ACNielsen who in turn sold it to retailers, they did at some point (that data is lost), and there is no way to know they won’t do it again. Most consumers never even blink an eye when giving the cashier their credit card. However, with one swipe, Wal-Mart is capturing private data that can lead to information such as access what they paid for their house, and their mortgage. The privacy issues bother me, especially because consumers have no idea that their data is being stored and are never asked for consent. I recently read about Wal-Mart’s use of RFID tags. These tags are used for maintain inventories that reflect customer demand better. However, people are concerned that the RFID could scan customers without their knowledge. Some states have new licenses that have RFID tags, which might allow retailers to scan their license without knowing and obtain private information. It bothers me a little, however, I feel like people can find just as much information online or more. Today, it’s impossible to hide personal information. There are people out there who are much more skilled at finding our information than most consumers are at hiding their information. Because Wal-Mart has so much at stake, I trust that they have invested the best technology and do everything possible to protect the data of their customers. If they didn’t, they would be getting into a lot of lawsuits that could severely damage their reputation.
What impact do you think they are having on their suppliers - making them better and more efficient or driving them too hard and reducing their profitability.
In relation to RFID, Wal-Mart is encouraging its suppliers to take part in the change. It first required suppliers to invest millions of dollars to comply with Wal-Mart's drive to have every carton and palette it receives carry a RFID tag. From the beginning, I think Wal-Mart was driving their suppliers a little hard to use RFID tags. Many suppliers hadn’t budgeted for this expensive new technology and could not immediately see the benefits. However, in the end I believe that the RFID technology will benefit the suppliers and make them more efficient. Wal-Mart’s suppliers will have a lot more data on the movement of their products. Suppliers will know when goods have arrived and be able to tell what is on hand, on sales floor and back room. I believe that this enables suppliers better demand signals for forecasting. I think that suppliers are waiting to see if there is in fact a return on the investment and then will make their decisions. In the end, suppliers are most likely benefiting in the long run more than it is costing them to implement the new technologies required by Wal-Mart.
