Wal-Mart is facing one of the most competitive industry where every retailor is fighting to increase the customer share. Saturation has become common in the US and Europe retail market where Wal-Mart has major presence. Despite of this it has managed to become largest retailer in the world. Behind this success of Walmart is its effort to generate enormous value from its huge data. Wal-Mart used to perform data mining to decide the best product mix right under all sorts of varying environmental conditions, a retailer’s twin nightmares: excess inventory, or short of inventory. For instance, the firm’s data mining efforts informed them that customers normally but certain product in advance whenever there is news of hurricane. During such emergency situations increasing up supplies of batteries and bottled water was a no brainer, but the firm also learned that Pop-Tarts pastries sales spike seven fold before storms hit. This insight has led to truckloads full of toaster pastries streaming into Gulf States whenever word of a big storm surfaces. Data mining provides many benefits to the organisations at the operational level also for example it also helps to predict things like how many cashiers are needed at different stores on any given day or time based on the intensity of sales. To increase smooth flow of information and transparency, Wal-Mart expect its supplier to share their data and at the same time Walmart shares its data with them. This successful collaboration with suppliers provides data that can help it to become more efficient so that Wal-Mart can keep dropping prices, and data can help firms uncover patterns that help suppliers sell more. P&G’s Gillette unit, for example, claims to have mined Wal-Mart data to develop promotions that increased sales as much as 19 percent. Walmart has given more than seventeen thousand suppliers access to their products performance metrics at Walmart that include daily sales, invoices, purchase order, shipments, returns, claims and forecasts. Walmart data warehouse allows all of these suppliers to collectively interrogate it to the tune of twenty-one million queries a year. While Wal-Mart is always willing to share its sales data with relevant suppliers, but it do not allow its valuable data to be accessed by any other party. Information brokers like ACNielsen collects data from many retailers as this sharing of data helps to get more comprehensive insight on market behaviour. However Walmart stopped sharing their data with them. Wal-Mart believes that its data is already so huge that the additional data provided by brokers doesn’t adding much value. That is why it does not appears wise to allow competitors access to what was happening in its own huge chunk of retail sales. Question 1. Evaluate the risk and benefit of retailors sharing sales data with the suppliers. Question 2. Critically examine Walmart decision of not sharing its data with information brokers. Question 3. Investigate how Walmart is able to generate value by mining its data.
Wal-Mart is facing one of the most competitive industry where every retailor is fighting to increase the customer share. Saturation has become common in the US and Europe retail market where Wal-Mart has major presence. Despite of this it has managed to become largest retailer in the world. Behind this success of Walmart is its effort to generate enormous value from its huge data.
Wal-Mart used to perform data mining to decide the best product mix right under all sorts of varying environmental conditions, a retailer’s twin nightmares: excess inventory, or short of inventory. For instance, the firm’s data mining efforts informed them that customers normally but certain product in advance whenever there is news of hurricane. During such emergency situations increasing up supplies of batteries and bottled water was a no brainer, but the firm also learned that Pop-Tarts pastries sales spike seven fold before storms hit. This insight has led to truckloads full of toaster pastries streaming into Gulf States whenever word of a big storm surfaces.
Data mining provides many benefits to the organisations at the operational level also for example it also helps to predict things like how many cashiers are needed at different stores on any given day or time based on the intensity of sales.
To increase smooth flow of information and transparency, Wal-Mart expect its supplier to share their data and at the same time Walmart shares its data with them. This successful collaboration with suppliers provides data that can help it to become more efficient so that Wal-Mart can keep dropping prices, and data can help firms uncover patterns that help suppliers sell more. P&G’s Gillette unit, for example, claims to have mined Wal-Mart data to develop promotions that increased sales as much as 19 percent. Walmart has given more than seventeen thousand suppliers access to their products performance metrics at Walmart that include daily sales, invoices, purchase order, shipments, returns, claims and forecasts. Walmart data warehouse allows all of these suppliers to collectively interrogate it to the tune of twenty-one million queries a year.
While Wal-Mart is always willing to share its sales data with relevant suppliers, but it do not allow its valuable data to be accessed by any other party. Information brokers like ACNielsen collects data from many retailers as this sharing of data helps to get more comprehensive insight on market behaviour. However Walmart stopped sharing their data with them. Wal-Mart believes that its data is already so huge that the additional data provided by brokers doesn’t adding much value. That is why it does not appears wise to allow competitors access to what was happening in its own huge chunk of retail sales.
Question 1. Evaluate the risk and benefit of retailors sharing sales data with the suppliers.
Question 2. Critically examine Walmart decision of not sharing its data with information brokers.
Question 3. Investigate how Walmart is able to generate value by mining its data.
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