Wal-Mart - How Much Data Is Too Much?

After reading the article about Wal-Mart’s vast collection of customer data and the ways they utilize it, it is easy to see how Wal-Mart has become so widely respected in the retail industry. It is pretty safe to say that when the size of your data storage is twice that of the entire Internet, you know quite a bit about your customers.

Techniques such as shopping cart analysis have given Wal-Mart get insights not only as to what individual items customers purchase, but what other items they buy along with it. The example of flu season products (cold medicine and chicken soup) can easily be expanded to other yearly events such as the Thanksgiving holidays, the Back to School season, Super Bowl Sunday, and many others, giving Wal-Mart valuable data for implementing the four P's of marketing (Product, Price, Place, Promotion); now that they know what products are being bought, they can strategize on what prices to offer them, where to place them in their stores, and how to promote them. This also gives Wal-Mart a distinct advantage when it comes to procuring stock from their suppliers and distribution centers. I honestly cannot remember the last time I went to Wal-Mart and something I wanted was out of stock. Having the products the customer wants when they want it is an experience not many companies can offer on a consistent basis.

All that being said about the great benefits of Wal-Mart’s vast collection of customer data, initial reactions of amazement quickly change to concern when I think of what other information they can obtain. I personally find it a bit unnerving that someone in Wal-Mart’s headquarters in Bentonville, AK can easily obtain my home address, driving record, creditworthiness, or any other pieces of personal information without my knowledge simply by using the debit card information connected to my purchase. Although it can not be said for sure whether or not Wal-Mart actually collects such data (and those spoken to in the article do not seem to believe so), the fact that they have that ability is unsettling in itself.

Thoughts of concern quickly change to fear when I think of what could happen if the security of such a large amount of personal information was compromised. While Wal-Mart has clearly stated on numerous occasions that they take all necessary steps to protect our data - they go as far as to state on their website: "We take reasonable steps to protect your personal information. We maintain reasonable physical, technical and procedural measures to limit access to personal information to authorized individuals with appropriate purposes." - I still think of instances of stolen information, like when McCombs accounts and other personally identifiable data was stole here at the Business School just a few years ago. With the McCombs incident, hundreds of people's data was at risk; a security hick-up with Wal-Mart could place millions of customers at risk for identity fraud.

Through the good and bad of having over 460 terabytes of customer data, there is always room for improvement. One thing that annoys me about Wal-Mart is the lack of integration between their physical stores and Walmart.com. Many times I've browsed products on their website only to find that they are a different price at the store. Wal-Mart even has a disclaimer on their website: "In our effort to be the lowest price provider in your particular geographic region, store pricing will sometimes differ from online prices. Our stores do not honor Internet pricing...” With the ability to track purchases and inventory levels, one would think Wal-Mart could just as easily monitor prices or at the very least guarantee them.