Given the enormous amount of data that Walmart captures, do you think they have been successful at converting into an experience that serves as a competitive advantage for them?
There is no doubt that Walmart knows how to manage their inventory based around customer habits. Whether it is sending sending trucks of strawberry Pop-tarts and six packs to hurricane threatened areas, or knowing to put the milk next to the bananas, Walmart has been able to use their enormous wealth of data to their advantage. However, I do not necessarily feel that these aren't things that other companies can't or aren't already doing just as well. Consider Target and Amazon, if you can't tell from my previous posts, these are two of my favorite companies. Target with sales revenue of “just” 65 billion dollars is tiny when you compare that to Walmart's 400 billion dollars in revenue. With all this extra sales data, Walmart probably does have some competitive advantage. They get to see a huge slice of the market in great detail. However, I don't feel that this advantage is particularly significant. All stored employ POS systems that capture every sale and the items in the cart. While Walmart has more of this data than other companies, other companies have other sources, Target has a proprietary credit card that is quite popular and will likely grow in popularity with the recently added discount (5% discount for purchases at Target with their credit card). Cards like this, and other types of loyalty cards provide a greater wealth of data and help to make up for any disadvantage caused by having less data. What we have is a quality vs quantity situation. Walmart may be the big player, but the rest can still keep up.
- 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?
I am very concerned about privacy issues. The amount of data readily available for purchase is stunning. Someone could very easily find enough information through various sources to fraudulently open a credit or steal an identity. Again though, this isn't a situation that Walmart is in alone. All companies that we buy from are collecting data about us, and as a general statement, I don't really trust any of them with this information. The problem here is, what can you do? If you want to cash your payroll check at Walmart and the cashier asks for your SS and driver's license number are you going to say no? Moreover, and I hate to stereotype, but for many Walmart shoppers, this is their only option to cash that check because they may not have a bank account. What we really need is comprehensive legislation that states what information can be collected, for what purpose collected information can be used, how (or if) the information can be distributed, and how long the information can be kept.
- 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.
Walmart's sheer size has a huge impact on suppliers. Many large like P&G companies make huge percentages of their sales to Walmart. So when Walmart says “jump” even a huge company like P&G says “how high,” and when Walmart says that they want RFID chips on individual units and they want the manufacturers to take that in their margins, all ust bow down to the sheer size of Walmart. One hand, Walmart is putting the market forward in a good way. It is hard to argue, if you ignore the possible privacy complaints that RFID chips will not revolutionize the way we shop and the way companies keep track of inventory. However, Walmart needs to keep in mind that it is sometimes to use a carrot instead of a stick when it comes to enticing suppliers to comply, because eventually on your suppliers can only be an effective strategy for so long.
