Walmart is the epitome of a megacorporation, but the way it uses big data is an example of how any company can translate online data into in-store changes. There are nearly 4,000 Wal-Mart locations in the United States, and 90% of Americans live within fifteen miles of a store. As impressive as this is, Walmart is playing catch-up to competitors like Amazon, it decided it was time to get serious online if it wanted to stay America’s favorite brick-and-mortar store.
In 2011, the company launched Walmart Labs as an “innovation outpost” designed to leverage it’s digital data and expand its Internet retail business. Just three years before, Walmart collected more than 2.5 petabytes of data every hour from its customer transactions, but there was no way to centralize the data into actionable information. Fast-forward to now, Walmart Labs launched three special Big Data projects to optimize the inventory of local stores based on what the customers in the nearby neighborhood are saying.
First, Social Genome allows Walmart to reach customers (or friends of customers) who have mentioned a product online to inform them that Walmart has the exact product at a discount. In order to do this, they combine public data from the web and social media with proprietary data such as customer purchasing data and contact information. Second, ShoppyCat was developed to recommend products to Facebook users based on the hobbies and interests of their friends. It uses the Social Genome technology to help customers with presents for their friends.
Lastly, Walmart Labs experimented with crowdfunding. Get on the Shelf gave customers the chance to pitch his or her product in front of a large online audience. Over a million votes were cast and in the end three products are now carried in the Walmart stock.
Walmart’s online strategy is going to become more important as the stores struggle to keep up with customer demand and manual labor becomes more expensive. Walmart’s struggle is playing out on the national stage, but even small companies must learn to combine online savvy and in-store business.