Blog 4 Wal-Mart

Blog # 4 Wal-mart

I believe that Wal-Mart has done as successful a job as it can with all of the customer data that it has amassed. I do not think that it is unique in its ability to create positive customer experiences at big box stores. If Wal-Mart could somehow make its in-store experience individualized, then it could have a unique advantage in terms of customer experiences over other competitors. Even with that said, Wal-Mart does have a definite competitive edge over the competition because of its discount pricing strategies. The article mentioned an instance of how Wal-Mart might advertise discounts on cold medicine to get people in its doors. It said people who typically buy cold medicine usually buy orange juice and chicken soup too. Wal-Mart then could optimally price orange juice and soup to maximize profits because they know that customers are going to buy them along with the discounted cold medicine. Every store does this though. My father manages an HEB, and told me that they employ the same techniques. He said for example that you might see discounted whip cream next to frozen pie crusts in the freezer aisle at their stores. That is a small example, but the whole store is based around combinations and “get you in the door deals” that will optimize profits. HEB also has a record of by the basket items that each customer buys. They don’t know who is buying what, but rather what is being bought in each grocery basket. This is what helps the store managers decide which items should be discounted and placed next to other items in order to create the best deals for customers and the company itself. So it seems that basically all stores employ strategies to keep there stocks shelved with consumers want when they come into the stores. Wal-Mart might have more information to do this slightly more accurately, but I believe their competitive advantage lies elsewhere.
Where Wal-Mart trumps the competition is in its ability to command its suppliers. “According to the Wall Street Journal, ten thousand companies each year compete to become Wal-Mart suppliers and only about two hundred, or 2 percent, get accepted. Those who do can see their business skyrocket overnight."^1 No other business is able to command the market in such a way as Wal-Mart is able to do. The article entitled, “What Walmart Knows about Customer Habits” is absolutely correct when it states that “Wal-Mart lives in a world of supply and command…” Wal-Mart gets to turn down 98 percent of suppliers. That is astonishing, and I seriously doubt that any other one store has the ability to do that. Wal-Mart is able to command what they want at what prices, and because the market share that Wal-Mart controls there will be at least one supplier that will meet its needs. Wal-Mart can under cut the price of the competition at any level because it can virtually control the price at which it buys products from suppliers.
As for the amount of data that Wal-Mart stores on individuals, I have no problem with it. People put intimate information about themselves on social media websites for the world to see. So I think it is silly to worry about what Wal-Mart knows what you bought last week at its store. For the most part, unless you are silly enough to believe that Wal-Mart is an evil empire trying to conquer the world, your information is safe in their database. If you don’t want them to have your social security number, driver’s license, or credit card numbers, then pay with cash. But since we live in a world where we give that information out online (credit card numbers at least) whenever we buy anything, I see no sense in worrying about Wal-Mart having that information as well.

^1 http://www.forbes.com/2009/11/03/creative-disruption-forbes-opinons-walmart.html