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Wal-Mart Analytics

Immediately upon accessing the website for @WalmartLabs, the user is bombarded with statistics describing what @WalmartLabs does and on what scale their work is on:


“Each week, we serve nearly 260 million customers who visit our 11,504 stores under 65 banners in 28 countries and ecommerce websites and apps in 11 countries. With revenue of $486 billion in 2015, @WalmartLabs employs more than 3,500 associates worldwide. We help people around the world save money and live better – anytime and anywhere – in retail stores, online, and through their mobile devices.”1


Their analytics platform is aimed toward enabling Wal-Mart analysts to make predictions about the future of the ever-evolving world of retail with a “forward thinking” mindset. A main goal for Wal-Mart is to create fluidity and consistency between mobile, online, and instore shopping experiences. In order to fulfill this goal, @WalmartLabs has conducted about fifteen different company acquisitions. For instance, Stylr is a mobile app that Wal-Mart acquired back in June 2014 that provides the user with the closest store locations for clothing items that the consumer is interested in. The creators of this app joined Wal-Mart’s team to help them bridge the gap between what is offered online and what is available in stores.


The @WalmartLabs website lists six areas that they focus on to make online, mobile, and in-store shopping easier for their customers: omnichannel, mobile/leveraging stores, baby registry, store maps, mobile check-in, and responsive design. Ultimately, Wal-Mart is trying to get to know their clientele better to allow better accessibility to items that they are interested in through multiple retail avenues seamlessly. They believe that their customers are “omnichannel customers” who need to have access to Wal-Mart’s plethora of merchandise anywhere that they go. One way they are combining mobile/online shopping with in-store shopping is by providing the “search my store” tool which allows consumers to choose a store location and see what merchandise is currently available in that store. Not only can the customer see what is available in stores, they can also find the specific location from the mobile app by using the “store map” feature. This will show the customer which aisle each item is located on in the store as well.


Providing convenience for the customer is a top priority for Wal-Mart. Expecting parents no longer have to head to a store to scan and register for their baby showers. They can now create a registry straight from Wal-Mart’s mobile app. Sam’s Club members no longer have to wait in line to pick up online orders in the store. With the new “mobile check-in” feature, club members can “check-in” to their local Sam’s Club in order to notify personnel that they are on their way to pick up their order. Lastly, Wal-Mart is providing convenience to their customers by provision a “responsive design” on their website that will adjust seamlessly to the screen size of whatever device the customer is using. This allows for a better online/mobile shopping experience.


An Open-Source Platform

@WalmartLabs is making waves in the world of information by being “grounded in the principles of open source” to refine and create new technology.2 They use three different open-source frameworks, Lazo, Joi, and Hapi, for development purposes. Walmart has invested large sums of money into this open-source platform. In an article from infoworld.com, Simon Phipps states that Wal-Mart spent 2+ million on just Hapi alone.3 While most other companies devote money to custom frameworks, Wal-Mart’s investment has taken things a step further by investing in more than just their own personal need for an open-source platform, but also on to the needs of others in the industry that are not even linked directly to Wal-Mart. While this may seem frivolous, it is a smart move on Wal-Mart’s part. By investing in the open-source frameworks, they are allowing others from outside the company to contribute to their code which will ultimately drive new innovation, hopefully leading to a positive return on investment.


Data Mining, Stock, and Hurricanes

With its very own disaster response center, Wal-Mart is well prepared when catastrophe strikes. In fact, Wal-Mart staffs its own on-site meteorologists to analyze weather forecasts and to determine which areas are likely to be affected by potential storms or hurricanes. Utilizing early forecasting allows Wal-Mart’s data analysts to make the necessary predictions about what products stores will need well before the storm hits. This allows shelves to be stocked with the essentials beforehand and for trucks to be loaded and ready to hit the road as soon as the storm is over to replenish empty shelves.4


Wal-Mart knows which inventory will see an increase in sales during these times of distress by utilizing data mining and analysis on customer buying behaviors. In fact, they have discovered that some of these items are not what one might think they are. The data analysts at Wal-Mart use data mining to sift through the buying habits of their customers to come up with items that are purchased in large quantities right before a hurricane. Many of the items on this list are predictable and would make the list of any basic survival kit, for instance, flashlights. However, the other items topping this list may not be as intuitive. An article from the New York Times titled “Beer and Pop Tarts: Wal-Mart Uses Massive Data Bank to Predict What America Wants to Buy” unveils that the “pre-hurricane top-selling item” is actually beer.5 This article also reveals that strawberry pop-tarts tend to fly off of the shelves during these times as well. By mining and analyzing data, Wal-Mart analysts are able to predict which stores will be hit and what products customers at those stores are most likely to buy; allowing them to send trucks full of beer and pop-tarts to affected areas.


Social Media Strategy

Rob Peterson of biznology.com believes that many companies could use a lesson from Wal-Mart when it comes to tackling the use of social media. He claims that Wal-Mart has over 34 million likes on Facebook and that this grows by about nine million every six months6. This may have been true back in 2014 when Peterson wrote this article, however, as of today, Wal-Mart only has around 32.7 million likes.7 While still a substantial amount of followers (actually putting Wal-Mart at 103rd most liked Facebook page in the world8), the number of likes that Wal-Mart has received has gone down in the past two years instead of continuing to rise as predicted by Peterson.


Another issue, brought to the table by Nikki Bair from forbes.com, is that the posts on Wal-Mart’s Facebook account only glean between “200-500 likes, 30-200 shares, and comments are just as likely to be complaints about poor service as irrelevant random thoughts, with nary a relevant or positive comment.”9


In his article, Peterson goes on to talk about ten things that Wal-Mart is doing “right” when it comes to approaching different social media avenues. The first of the ten, “Start with a Goal”, is about setting a clear goal for what you want to accomplish with your social media presence. Wal-Mart’s goal is to inform its customer base on ways “to help them save money so they can live better lives” by shopping at Wal-Mart9. While this is a respectable goal, Baird argues that “retailers are overtly promotional” through social media posts causing disinterest in their posts from customers. Baird contends that “content” is one of the most important pieces to having a successful social media profile. Basically, she claims that pushing products to a customer base is more than just selling an item at a cheap price but is also about creating “emotional connections with a brand” and really “educating” the shopper on the product. When discussing advertising tactics on social media, Baird states that “the trick is to lead consumers to commerce in social spaces without beating them over the head with it.”9


While Wal-Mart might have good intentions when it comes to social media, they certainly have a lot of work to do in order to really engage their customers (and furthermore to continue to engage their customers on a long-term basis) through different social platforms. With such a large social media following, one would think that their posts would garner more attention. Wal-Mart is possibly taking too much of a ‘sales pitch’ approach while creating posts on social media and should possibly focus more on providing useful content and building connections with their followers.


Social Media Analytics

Wal-Mart not only uses social media to create content and posts, but also uses it as a way to extract “big data”. According to an article from SAS, Wal-Mart’s analysts monitor clickstreams on its different social network accounts in order to see what items users are clicking on and gravitating towards, thus, allowing them a better grasp on how “online behavior influences in-store behaviors and vice versa.”.10 This permits the data analysts at Wal-Mart to make assumptions about what people are and are not interested in, allowing them to make changes to their social media strategy, and even to make changes to items they are selling in the stores.


References



1. Retrieved from http://www.walmartlabs.com/about/us/digest.com/neural-networks.html

2. Retrieved from http://www.walmartlabs.com/innovation/open-source/ 3. Phipps, Simon. (August 22, 2014). Walmart’s Investment in Open Source Isn’t Cheap. Retrieved from http://www.infoworld.com/article/2608897/open-source-software/walmart-s-investment-in-open-source-isn-t-cheap.html

4.Hays, Constance. (November 21, 2004). Beer and Poptarts: Wal-Mart Uses Massive Data Bank to Predict What America Wants to Buy. Retrieved from http://www.theledger.com/article/20041121/NEWS/411210344

5.Wohlsen, Marcus. (November 1, 2012). How Store Shelves Stay Stocked Even After an Epic Hurricane. Retrieved from https://www.wired.com/2012/11/sandy-supply-chain-impact/

6.Peterson, Rob. (August 25, 2014). 10 Lessons on Walmart’s Social Media Strategy. Retrieved from http://www.biznology.com/2014/08/10-lessons-walmarts-social-media-strategy/

7.Retrieved from www.facebook.com/walmart

8.Retrieved from http://fanpagelist.com/category/top_users/view/list/sort/fans/page6

9.Baird, Nikki. (November 9, 2015). Three Social Media Mistakes Walmart is Making Right Now. Retrieved from http://www.forbes.com/sites/nikkibaird/2015/11/09/three-social-media-mistakes-walmart-is-making-right-now/#7acdba7473b2

10.Four Ways Walmart Uses Analytics. Retrieved from http://www.sas.com/en_us/insights/articles/analytics/four-ways-walmart-uses-analytics.html

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