Question:
Discuss about the Walmart and Big Data Real Time Analysis.
Big Data and Walmart can be synonymous in the sizes of them, as Big Data is as potential as Walmart and Walmart can be as big as big data. Today’s retail stores not only collect the customer data for share the offers and discounts of the products, but also to understand, integrate and interpret the customer information to exploit this data in the best way to promote their sales and revenue.
Big Data
Big Data is data sets that are very huge, complex and large that the present and contemporary or traditiaonl data processing application will become inadequate. The contemporary challenges of the traditional data procsseing applications, like data search, curation, visualization, sharing, updating, querying, transfer, analysis, capturing and information privacy can be solved more effectively with the Big Data. It refers to the use of predictive analytics to extract certain value from the raw data that become reference and ground to make more confident decision making. Accurate results from Big Data can result in cost reduction, greater operational efficiency and reduced risk. Big Data has gained quick applications in various industries for combating the crime, preventing the diseases and spotting the business trends. Among all of them the business organizations, which deal with majorly huge customer base exploit the best out of Big Data. (Reichman, et al. 2011).
Big Data Analytics can better be described as 3V’s,
Predictive Analysis
Predictive analytics is predicting the future trends based on the use of data in the past, with the help of the machine learning algorithms and statistical models for identification of the patterns. Walmart made use of the analysis for forecasting, marketing, customer service, product offers and fraud detection, to exploit the benefits, like achieving competitive advantage, new revenue opportunities, increased profitability, increased customer service and operational efficiencies.
Walmart
Walmart is a multinational retail corporation that is based out of America. The major operations of this retail mart are discount department stores, chain of hypermarkets and grocery stores. The company was founded in 1962, by Sam Walton. So, far, by the end of April, 2016, the number of stores of Walmart has reached 11,527, across 28 countries under 63 banners. The company has the revenue of more than US$482 billion with an operating income of US$24 billion and net income of US$14 Billion. Walmart is the largest company in the world, by revenue and also the biggest private employer from the entire world, for its huge employee base of 2.2 million. The company is also the most valuable companies by the value in market in the world (Sam et al. 1993). Sam Walton.
Walmart, being the largest retailer in the US attempted to collect and analyse its huge consumer data. The collected big data sets are analysed and mined towards predictive analytics, for optimizing the operations and business by prediction of the habits of the customers (Hayes 1990)
The Walmart Case
Walmart had acquired Kosmix and changed its name to WalmartLabs with the objective of developing software for real-time data streams analysis, in April 2011. The company has announced the own Polaris search engine, in the following year. Walmart experiences data collection and analytics experience the concern of privacy for the customer data. Wlamart has collected the data right in 2012 and its transactional data is estimated to have more than 2.5 petabytes of data, related to the customers.
Kosmix enabled the concept of Big Data, though the word hasn’t been coined by then, through developing the software application towards searching and analysing the applications of the social media, like Facebook, Twitter, Blog spots, etc. in real time for providing the user personalized insights. Social Genome application is also developed to capture the data about people, in terms of information, relationships of the events, topics, people, locations, organizations and products. it captures the real time data from the social media sites, in the form of billions of relationships and entities. The application consistently performs social media semantic analysis and feeds the output of it to Walmart’s e-commerce applications that are custom built.
By the beginning of 2013, the company has earned the capability to index and search social media documents of about 60 billion, helping the marketers to analyse, understand the trends, sentiments and popular products, all on the basis of real time. It can even analyse geographical location based sentiments analysis that enables the capability to predict the trends in the stores of Wal-mart and also in ecommerce stores.
Walmart has developed SCAN & GO program, which is made available through Walmart App, through the Android and iPhone devices, right in 2012. The App helps the customers to scan the purchased itesm with their phones and pay at self-checkout, before leaving the store. The items that are purchased and the personal details of the customer are well integrated in the smart phone and this integrated data gives a much and directly analysed data to Walmart. The technology also helps the company to grab extraordinary insights into the behaviours of the shoppers. The geo-location feature from the App help the company to offer the specific and relevant coupons to the shoppers, right at the time of navigating within the store.
How Walmart Makes Use of Big Data?
Initially, the collection of the data is started in the year 2012, with an experiential Hadoop cluster with 10 nodes and increased this number to 250 nodes. The migration of the Hadoop is done with objective of combining 10 of its websites into its home website, to gather all the unstructured data into the Hadoop cluster. This is the beginning of the speed of Big Data Analytics and stands to be the key factor till today. The analytics are scaled up to provide the best-in-class e-commerce technologies that have been increasing the revenue and also deliver the best quality customer experience.
In addition to the Kosmix, Walmart also has acquired Inkuru Inc. to target merchandising, targeted marketing and fraud prevention. The predictive technology employed by them has started pulling huge data from various and diverse source. It helped the Walmart to improve the customer service, through personalizing the services. Machine learning technologies are incorporated by the predictive technologies to automate the accuracy enhancing process of algorithms and made it to integrate with diverse internal and external data sources.
Walmart performs the big data analytics, through the following architecture.
Figure: Technical Architecture and Online Marketing Ecosystem (Source: datafloq.com)
The company has transformed its decision making to increase the revenue with the repeated sales.
The First Applications
Walmart has attempted the following technological steps to consider the customer database.
Using this application, the company alerts the customers, when its competitor reduces the price of the product that was bought by the customer. The application will then offers a gift voucher to the respective customer that would compensate the difference of the price.
Usign this application, the custoerms are provided with the e-copies of the products they bought.
This application in association with Hadoop helps to maintain the walmart stores most recent maps, around the world. These maps can identify, where a small chocolate resides in the specific walmart store, around the world.
Tracking the Customer Data
Walmart makes use of the data mining for discovering the point of sales data patterns. The patterns help providing the recommendations of the product to the customers, based on the previous products bought. Eventually, it increased the rate of conversion of the customers. Each and every customer is targeted and tracked, idnividuallly.
Difference in Increasing Sales
New product launch is based on the analysed social media data. It finds how and to what the users are frantic about a product, for example, Cake Pops. The company responds immediately to the analysis data quickly and the same product will hit the stores of the Walmart.
The shopping policy of the Walmart is recently updated and modified based on the analysis of the big data analysis. The predictive analytics are leveraged towards increasing the minimum online order amount for the customer to be eligible for a benefit of free shipping. Recently it has increased the range of new products and also increased the minimum online order amount from $45 to $50.
Credit card purchases by the customers are analysed through big data algorithms and provide recommendations, specific and specialized to the customers, on the history of the purchases.
Big Data Analytics Solutions
A new contest, crowdsourcing is introduced in the social media that benefit the enterpreneurs to add the new products on the shelf, resulting in 5000 entries in the US. And the best products are chosen and declared to be winners and displayed in the stores making them available to millions of customers.
Social Genome – It reads billions of messages from FaceBook, Tweets, videos in YouTube and postings in blogs for analysis. It combines this data with proprietary data, like the basic customer details, like email id, purchasing data and public data accessed from the web.
Shopycat – Gift recommendation Engine – This App recommends the best gift for the friends of customers, which are based on the social data extracted from social media and it also sends the links of the respective products to purchase. The Shopycat has won 10 million fans so far.
Predictive Analysis – This Predictive analytics stand as the supply chain process heart and help staying properly stocked, reducing the overstock, on the products that are most demanded. It negotiated with the suppliers for real-time vendor inventory management usage to help in minizing the specific product inventory, in case the expected sales are not achieved. It support the retailers to buy the highly demanded products by saving the funds. Eventually, it has increased the sales and so the profits.
Mobile Big Data Analytics Solutions
More than half of the customers use smartphones and 35% of them are adults that contribute 3/4th of total customer base of the Walmart
Smartphone customers make 4 more trips and they spend almost 77% more in the stores
Users with mobiles account for almost one third of traffic in Walmart every year and close to 40% approximately during the holidays.
The geofencing feature of the mobile App is enabled to sense, whenever the customer enters the store of the Walmart in the US and the mode is changed to ‘Store Mode’ and this mode helps the customers to scan the codes of QE to explore the specialised offers and discounts on their interested products.
Walmart analytics system analyse about 100 millions of keywords every day for optimizing each of the keyword for bidding
Analytics considers data upon millions of products connecting to 100s of millions of customers all collected from various sources
Significant growth from 10% to 15% is expereicnd from online sales and reach $1 billion in revenue
Walmart labs enabled the analytics system that performs an action and analysis from every clickable action of its website, walmart.com, for
What the customers do buy online
What the customers do buy in the stores
What is the trend going on Twitter?
Focuses on local events
The deviations in the buying patterns affected by the deviations in local weather
Walmart & Big Data
Walmart has exploited the best of Big Data, than any of the company in the world. The customer base has become a strong asset and the customer base has become a great source of increased business for the company.
Walmart Big (Data) Facts and Figures
Figure: The Walmart Big Data Facts
Privacy Concerns
Many concerns have been raised that people of color in the US are more likely to have lesser income, compared to the population in the US, face certain risks from the big data usage and evolving and the practices of the Walmart, particularly. In addition, there are other concerns raised are the following.
The journey of success of the Walmart is continued and is expected to scale up by leveraging the big data analysis.
Conclusion
Walmart stores have been running as the most successful retail business, not only in the US, but also in the entire world. the secret to its success lies in the right product delivery, at the right time and in the right place. The success of the store in climbing the ladder of the retailing success has been yielding remarkable results, majorly by leveraging the big data analysis.
References
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