The retail conglomerate known as Wal-Mart continues to grow and is showing no signs of stopping. With 3,600 stores located across America with approximately 100 million customers that visit the store every week, Wal-Mart is capturing our every move to better understand customer behavior (or so they call it). With roughly 460 terabytes of data being collected and $4 billion dollars (in 1991 alone) spent on technologies to track customer purchasing behavior, Wal-Mart is reaching higher levels of (world) domination. But, is this a good thing? I don’t like to think so.
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 amount of access that Wal-Mart has to customers’ private information is overwhelming, or more appropriately, invasive. The data enhancement program that Wal-Mart utilizes is another omnipresent way of collecting additional personal information, such as monitoring mortgage amounts or examining credit history, is an insidious way of looking at consumer buying patters (and behavioral patterns) without public knowledge. Wal-Mart’s use of technology to essentially spy on customers only reflects Orwell’s 1984 idea of “Big Brother.” What I really want to know is what are they doing with all of our information? They can’t possibly be using all of it… can they?
Although Wal-Mart has tight security policies over the information that they gather from customers (meaning that they do not share it with the public), the fact that customers do not know their information is being collected is obtrusive. It would not bother me if Wal-Mart alerted their customers that their information was being aggregated, but the secretive ways of how they attempt to better “understand” customers is bothersome. There are other, less intrusive ways to collect customer data. I am also not sure I completely trust them, as information is still being shared with suppliers, thus more personal information is handed over to companies individuals may not know about. Finally, is anyone else disturbed by the fact that Wal-Mart is more concerned about pre-hurricane sales items and which ones have a higher success rate to be sold?!
What aren't they doing with technology that they could; that is, are they using all of the technology that is available to them to capture insights and create great experiences for their customers and, if not, what could they do?
Wal-Mart seems to be using a lot of technology to gather customer insights, but I am unsure about their decision as to what they are doing with them, despite rearranging products throughout the layout of the store. The use of checkouts, bar codes and electronic data interchange (and now the idea of radio frequency identification devices to keep track of all of their products) are all great tools to better understand buying behavior patterns. Yet these tactics seem to be ubiquitous; as in, everyone (or almost everyone) is using them.
More importantly for Wal-Mart, there does not seem to be much of a difference in enhancing their user experience: to me, it’s just another retail giant. Wal-Mart also does not offer loyalty programs nor do they promotions based on previously purchased items (whereas other retail stores, such as Sears, do). It seems as though Wal-Mart is trying to take “the road less traveled” approach in making their strategic planning process more unique than the mass market, yet other companies seem to be doing just as well as Wal-Mart is with traditional ways of collecting data. Sorry Wal-Mart, the only unique portion of your information gathering process is the fact that you do not share your information!
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? Again, try to keep this in the context of technology.
Wal-Mart shares its customer information with some suppliers to see how well its products are selling on the market, to keep track of their inventory and have an efficient supply chain that quickly transmits information to and from suppliers. The method of relaying information in real time, however, puts pressure on suppliers to perform with perfection (i.e. there is no room for error). Moreover, because of Wal-Mart’s dictatorship over supply chains, suppliers have little room to refuse direction and comply (because of the profit they are making). This can ultimately lead to more restriction on business.
One benefit of Wal-Mart’s strong hold on suppliers is that it is easier and more efficient to correct “exceptions,” such as a truck’s failure to deliver or receive a product or distribute a product to a specific store location. However, Wal-Mart exceeds more micro management over their suppliers, which means that operations are cleaner and tighter, resulting in a (hopefully) more reliant system and better experience for the end customers (even at the risk of suppliers’ preference.
