Walmart: Data analysis for the big win
Our first success story: Walmart – The Supermarket Giant
“Google conquered the advertising world with nothing more than applied mathematics.” – Chris Anderson, editor in chief of Wired Magazine.
Every company creates an array of data, from the information concerning the product, to the information pertaining to the customer. Some years ago, a few companies made a bold new move that no one else had thought to do: They simply looked. They looked into their records, saw the immense potential that lay within and dove in, analysing their data, and discovering a new way of running their business. We have decided to present some of those to you, in a series of regular blog posts. So stay tuned for some great data success stories!
Walmart is a retailing giant. The first in the world in 2014 in terms of revenue. Every day, the company makes around 36 million dollars from its stores in the US alone. Walmart originally started up as a single shop, the “Walton’s Five and Dime”, in Bentonville Arkansas. It now has 11 633 stores and clubs in 28 countries, is the world’s largest company by revenue and the largest private employer.
Walmart discovered the value of data analytics in 2004 when Hurricane Sandy hit the United States. They analysed their mountain of data and discovered some surprising statistics; their sales of strawberry Poptarts rose with hurricane warnings. Without understanding why, but being confident on their data, they decided to place Poptarts next to the hurricane supplies at the entrance of their stores when there was a hurricane warning, so as to let hurried customers dash in and out of the stores. This move resulted in an upsurge of sales and millions in extra revenue.
The company has since then continuously developed their analytics department to become Big Data pioneers. They collect around 2.5 petabytes of data every day and are using it at every level of their business. Data analysis gives them the opportunity to know more their own business and customers. Because of the immense amount of people who buy at Walmart, they do not need to know about individual customers but about customers in general, at a store level.
This has led to Walmart’s creation of a Data Café in 2014, an analytics hub where any team member of the business can go and resolve their problems with the data analytics team to better their performance. Even under a heavy load, the system must be able to provide the manager with immediate insight. A query, however complex, should not take more than eight seconds to complete, and indeed, most take less than two seconds. A typical problem that used to take 3 weeks to solve can now be dealt with in less than an hour. This can allow the store to monitor performances on one coast of the United States, and make price adjustments before stores open on the other coast.
Data analysis has helped Walmart grow into the giant it is now, they have understood the importance of harnessing data to improve their trade, an asset which is vital in this competition-ridden world.
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