Wal-Mart's Wealth of Data

Wal-Mart uses the large amount of data they collect to more efficiently run their store and enable them to follow through with their promise to offer the lowest prices. Their data analysis allows them to predict customer behavior in order to offer products at desired times and the amount of staff necessary to properly facilitate their customers at certain hours. Such research allows them to operate with the minimal operating expenses so that they can continue to offer the lowest prices possible. This is one of the reasons I believe Wal-Mart converts the data they capture into an experience that serves as a competitive advantage. Not only does it benefit the store by lowering operating expenses, but it also benefits the customer by making it possible to offer the lowest prices.

Another way that Wal-Mart uses their data collection beneficially is to make specific and profit maximizing customer behavior predictions. For example, Wal-Mart’s massive data accumulation allowed them to predict how certain trends such as natural disasters affect buyer behavior. It is highly profitable and very insightful that Wal-Mart knew that strawberry pop-tarts would be in high demand before a hurricane whereas other retailers would only be predicting a surge in the purchase of common items like flashlights. Since it is common that certain products are bought in mass quantities when natural disasters occur, customers will go to the store they find to be the most well-stocked with the items they are seeking, and it is that retailer that will get the benefit of the profits. When hurricanes were in the forecast, trucks filled with top-selling pre-storm items were ready to stock the Wal-Mart stores in preparation to meet the customers’ needs. In this case, Wal-Mart was successful in gaining competitive advantage, greater profits, and a reputation for being well prepared which will enhance the brand image in people’s minds.

It is evident that Wal-Mart understands the industry of customer satisfaction, but they do not achieve that satisfaction through customer intimacy. Rather than gathering data on specific customers and focusing on individualized profiles, Wal-Mart sees the big picture in consumer wants and needs by using mass data to pinpoint trends and meet the needs of the masses. For this reason, I believe that the privacy issue attached to Wal-Mart’s data collection becomes a non-threatening issue. The fact that Wal-Mart does not use data collection specific to certain customer behaviors to target specific customers through loyalty programs or the like, gives Wal-Mart a viable reason for collecting data. The data they collect is only a part to a whole that finds trends in order to offer products particular to segments of the population that they serve at their stores or in certain areas.

Another reason that privacy is not breached is that Wal-Mart’s data is evaluated in mass and they could care less the name attached to the record, for the customer’s individual profile means nothing to Wal-Mart’s efforts other than to pinpoint demographics and trends of the typical shopper. Wal-Mart also takes serious pain in protecting the privacy of their database information which means that others who may manipulate sensitive data cannot easily gain access to the database. The data that Wal-Mart evaluates in the confines of its own secure walls has not been used negatively towards any customers, and I don’t fear that it will be because of the way the store uses data purely for the means of altering their business to meet the needs of the customer. For instance, I do not see any harm in the store knowing about records of purchase behavior if they are using it to know how to stock the shelves and schedule employees at the most optimum way, they way that will help them to save money and continue to offer low prices.

Since Wal-Mart truly does serve the masses, it is crucial that they know the needs, wants, and behaviors of the masses, and this data is treasure to the company, one that they will carefully protect. It is also more convenient for customers to know they are getting the lowest prices without feeling conned or manipulated by loyalty cards and the hassles they entail. For Wal-Mart, this is also a competitive advantage that will continue to bring in more customers who recognize their reputation for low prices.

The technology that Wal-Mart utilizes to know how to stock their shelves shows a growing understanding of just how technology can transform business supply chain. For instance, the speed at which items come from warehouse to store shelves is key in meeting the needs of the customers. When the product is on the shelf when the customer goes shopping for it, that is profit for the store and also the supplier as their product moves through the supply chain more effectively. Even though Wal-Mart has gained a reputation for becoming more dictatorial in their supplier relationships, it ends up being the best for everyone in the supply chain.