Wal-Mart!

Wal-Mart seems to primarily use the data that they glean to serve their own purposes of maximizing profit, which is to say that they’re concerned about themselves foremost, and any beneficial experience for the customer is almost just a serendipitous byproduct. Of course, if they’re aware of which items are bought together in a basket, or which items are in high demand during a hurricane, they can keep the right amount of inventory and better meet the needs of their customers. Naturally, it’s more advantageous to be informed about your customers than not. However, especially from the tone of the article, I don’t get the sense that they’re doing all this for the betterment of customers’ experiences. This is confirmed by Wal-Mart’s general lack of transparency about the information that they have on their customers, which probably accounts for why certain groups object to their actions. However, even if Wal-Mart is primarily using all their data for their own good, it is a justifiable and intelligent use of their resources.

Wal-Mart’s knowledge does indeed provide them with a competitive advantage. Because they serve more customers, they have more depth and breadth of knowledge into their customer base than any competitor. In fact, some people probably criticize the extent of Wal-Mart’s customer database just because Wal-Mart has so much data, even though many stores utilize the same methods to gather data on their customers. Moreover, it definitely makes sense that retailers in general would want to be smart about using this information to better anticipate their customers’ needs. Since Wal-Mart and other stores had already been collecting data just by way of checkout transactions, it was simply a matter of analyzing it, interpreting it, and putting it to practical use. Going straight to the source – detailed histories of customer behaviors – is no doubt a more accurate and precise method of assessing inventory needs than relying on records of inventory counts. With specific customer data, they have a more robust pool of data to pull from, including demographic preferences, which items are commonly bought in a basket, etc. This way, they can glean more rounded insights into not only what customers are buying, but also why they are buying them. In turn, they are more likely to market products in a way that is directly relevant to customers’ needs.

Personally, I don’t believe the privacy issue is too much of a problem because it wouldn’t be in Wal-Mart’s best interest to abuse their use of the data. They would be too fearful of the repercussions if they were ever found to be exploiting their knowledge of intimate customer data like Social Security numbers, and in any case, that’s not the purpose of their database. It appears more so that Wal-Mart observes buying habits from a macro level and breaks down customer behaviors only in terms of market trends like region, season, basket items, etc. – all reasonable information for them to assess, and in line with common market research methods.

Wal-Mart is perhaps being unduly singled out merely because they are a large company, an easy target. No, they probably don’t need our Social Security numbers or our court dates (and they should perhaps consider somehow getting rid of that information in their mainframes, both because it’s irrelevant for forecasting and to promote good press), but it is completely valid for them to want to know as much as they can about customer buying habits. And the more information they gather over time, the more reliable all of it will be, and the more accurate their inventories will be. I think we can rest assured that there won’t come a day when Wal-Mart or any other retailer can anticipate our every move, Big Brother-like, solely with their fancy-schmancy technology. In the end, customers will always be weird, fickle, and unpredictable. Of course a large company with millions of discrete unpredictable customers to serve will want to somehow make sense of it all. Even if it’s focusing on how to maximize their own profits by strategically balancing the prices of items in a basket, it also means that customers can always depend on Wal-Mart to have what they need. In a one-stop shopping world, that’s a lot.