Blog #4

After reading the article “What Walmart Knows About Customers’ Habits”, I was very surprised at the amount of information they collect on their customers. I had no idea that this practice was even in existence and I am glad that I was able to read about their methods of increasing sales and keeping an efficient supply chain.
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?
I do think the amount of information Walmart is able to capture puts them at a competitive advantage. It only makes sense that the more information you are able to get, the better prepared you are in various situations. For example, since Walmart was able to gather information relating to what products were purchased during hurricane season, they were able to stock their shelves with those items for any upcoming hurricanes (the pop-tarts and beer). This is a competitive advantage because their competitors may not be doing the same thing. Walmart seems to invest a lot of money into this kind of technology and it has become an essential part of their sales and production supply in stores.
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 think that the amount of personal information they gather crosses the line of privacy. I had no idea that they were able to gather so much information about each and every one of its customers just by checking out at the store. That makes me wonder; how much stuff do they know about me? I shop at Walmart quite frequently and was completely unaware of their ability to access all of my personal information. I think that if they disclosed it to their customers, then it wouldn’t be that big of an issue. This technology can access any number of items pertaining to your identification and it makes me concerned because I don’t know where all this information is going and who will be looking at the data. It bothers me a lot! I don’t trust Walmart with this information. They privacy policy doesn’t even sound that effective. It just seems that Walmart thinks they have the right to this information and they can do whatever they want with it. Also, I think it would be more fair if Walmart had something similar to Sam’s Club where customers give their personal information in exchange for a membership. This way customers are aware of how much personal data is given to the store. However, the way that Walmart currently operates seems inappropriate and sneaky. I don’t understand why it is necessary for them to capture information relating to things outside of purchasing items in the store; such as, you mortgage amounts, your court dates, etc. Why do they even need this information? I can understand why they would want to track their customers’ purchasing habits, because that directly relates to sales and gives Walmart information on how much inventory to have stocked on their shelves; but there is no need for them to have all of this other personal information. Walmart’s customers walk in to their store and innocently purchase their grocery, not having a clue that they are being examined, with all of their personal information revealed. Additionally, the fact that Walmart is so huge is a concern for me. Like it says in the article, “the Internet has less than half as much data.” That just gives insight into the huge amount of data they collect, I’m shocked!
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?
I think they could be doing more with the technology they use to gather information. They are not doing anything to improve their customer’s overall experience in the stores. I think in addition to gathering information as to how much inventory to have stocked on their shelves, Walmart should implement a system to gather information on customer insights. This way the store would be even more competitive and have an even stronger competitive advantage. A strong indicator of a successful company is how satisfied their customers are, and Walmart is not really doing anything to find out if their customers are in fact satisfied or not through their technology mechanisms. Maybe they can start asking one or two questions at the end of the check out line pertaining to their customer’s needs and preferences. For example, they can ask if the customer’s are satisfied with their experience in the store today. This way Walmart will be on its way to gaining the satisfaction of more and more customers. Since Walmart has the ability to gather so much information through their technology, capturing customer insights and creating a great experience will be just another reason why people are drawn to the store. Another thing they can do is e-mail questionnaires relating to customers’ satisfaction levels. It states in the article that Walmart has the ability to get their customer’s e-mail addresses, so they can use it to gather insights via e-mail. I think customers will be willing to give this type of information because it will provide a direct benefit to them in the future.
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 is a huge distributor and is market leader. They set the tone for competition and have a lot of power as to what prices to set for various items in the industry. Walmart is the only buyer of many of its supplier’s goods and without Walmart, the suppliers may not be able to survive. The fact that Walmart has all of this power is a good thing for them, but not for everyone else in the industry, like their suppliers or other competitors. The article mentions that with Walmart, it is a world of supply and command, rather than supply and demand. That is scary for their suppliers because they are required to have the items ready for Walmart to purchase and make sure they remain happy. With their technology, Walmart is able to track what products will be needed and the suppliers must abide by their expectations. This puts a lot of pressure on their suppliers to meet their demands and poses the risk of losing them as a buyer altogether. I don’t think they have a positive impact on their suppliers. I think their suppliers just do what is asked of them and just try to maintain good relations. Walmart drives their suppliers too hard and has the power to reduce their profitability. It says in the article that if suppliers are unable to meet any sales goals in the upcoming year, Walmart will have even harder negotiations with them. The suppliers should be concerned if they are even being profitable selling to Walmart, and not about the possibility of losing them. Their plan of using their technology to institute “scan-based” trading, in which their manufacturers own each product until sold causes some concern for me. This puts all of the risk with their suppliers if products don’t sell and some companies won’t be able to handle those losses. However, because of Walmart’s size and ability to control their suppliers, most companies will be forced to be okay with this change.