Even someone who has never set foot in the United States knows what Wal-Mart is. The worldwide distribution giant par excellence has become a prime example of customer knowledge… and not in vain. Some numbers speak for themselves:
Analysts all agree: the cornerstone on which Wal-Mart’s success was built is exhaustive customer knowledge. In fact, the company has one of the largest civil databases in the world, which allows it not only to know exactly who its customers are and what their habits are, but also, and even more importantly, to predict their needs and behavior.
Last year, when Hurricane Frances was on the verge of attacking the coast of Florida after devastating several Caribbean countries, Wal-Mart used all the information it had accumulated on customer behavior after the previous Hurricane Charley, and discovered that beyond predictably sought-after products (lanterns, tools, foodstuffs, etc.), its Data Mining techniques detected a drastic increase in beer consumption in potentially affected areas. Fear, perhaps? Probably. The important thing is that the company gave the order to double the beer supply in “sensitive” areas, and it succeeded entirely, increasing sales with no stock problems. This is just one example of the impressive use Wal-Mart makes of its information storage, analysis, and prediction systems.
With close to 460 terabytes stored in its giant Data Warehouse, Wal-Mart possesses information on a considerable portion of the United States: social security, driver’s licenses, bank loans… very little information escapes the “American Big Brother”. By simply entering an ID number or a mobile phone number, Wal-Mart is capable of obtaining dozens or hundreds of data concerning the customer in question.
This zeal for meticulous customer knowledge allows Wal-Mart to act as much from the “front office” (strategically placing its products and services in establishments) as from the “back office” (reinforcing one of the most efficient stock management systems in the sector).
Wal-Mart’s loyalization policy is one of the most ambitious in the world. The company includes its members in Sam’s Club, which gathers together not only the most loyal customers, but also over 500 establishments of that name all over the United States, which are only accessible to members, with extremely competitive prices. Wal-Mart is so aggressive, and its informational power so immense, that it even sounds out small neighborhood food stores to get them to join its club and acquire low-cost products, later to be re-sold at a substantially higher price.
Although some have spoken out against the immense power that Wal-Mart accumulates with its knowledge of the average American consumer, it is undeniable that the company has established itself as one of the greatest worldwide experts in high-volume information analysis… Can anyone guess why Wal-Mart has decided to enter the Chinese market?