Wal-Mart – the mega power

Wal-Mart pioneered the data collection from its customers to enhance the Wal-Mart experience of selling everything at everyday low prices. Using the data, Wal-Mart is able to predict the needs of its customers based on their location and demographical information. This definitely makes the mega store more efficient with lean operations compared to its competitors. The one-stop shopping experience and the everyday low prices gives Wal-Mart a competitive advantage over its competitors who are wailing away trying to copy the Wal-Mart way. The ability to respond quickly to customer demands can be very powerful. Everyone wants to go to a store that carries everything they need without worrying about out-of-stock scenarios. Wal-Mart's intense data gathering ensures this never happens. Its ability to recognize changes in customers' habits and take appropriate measure to fulfill their needs makes it unique.

Wal-Mart has not only required its competitors to become more efficient to survive in this economical times, it has also set extremely high standard for its suppliers. Those who do not meet the highest operating efficiency, or the lowest supplier cost, are dropped by Wal-Mart. The suppliers who have betted the success of their company on Wal-Mart by supplying mostly to Wal-Mart end up either pioneering the most efficient production methods or losing the battle against other suppliers and losing Wal-Mart as its customers. If you do become a Wal-Mart supplier, you have no freedom of choice. Wal-Mart will make you keep detailed data of your own inventory and a way to track it efficiently and with depth. Wal-Mart understands the importance of data collection and the amount of information you can derive from it. Hence, Wal-Mart has caused suppliers to become more efficient in data collection and will soon make it a requirement. Wal-Mart is now planning on sharing its burden of collecting massive amount of data with its suppliers. Ultimately, I can see Wal-Mart as being the one who monitors the interaction between the supplier and the consumers with Wal-Mart providing a channel of distribution and the suppliers tracking the needs of the customers directly.

All the data collection ultimately gives useful information only when it can be correlated with customer information and preferences. It is great that Wal-Mart can decipher what the customers want and ensures their needs are met at the lowest price. But, who is watching out for customers' private information? It makes me extremely uncomfortable to know that by cashing my monthly paycheck at Wal-Mart, I will be compromising my identity. They will know everything about me, including my SSN and driver's license. Why do they need to know my SSN? Doesn't the government always state to never reveal our SSN? Then how can Wal-Mart feel entitled to storing these data from its customers who are trusting Wal-Mart to securely verify our identity without storing them? I understand the need for proper identification to ensure the paychecks are cashed by the appropriate person. However, I see no justification in Wal-Mart's choice to store this data, without willing consent of the customers. It is one thing to store data to ensure the next trip to Wal-Mart doesn't take as long due to verification process. It is another thing to store the data for market analysis purposes.

My main concern comes from Wal-Mart's possible failure to securely handle the vast amount of data or to stay true to its belief of not abusing its data to manipulate the happenings in the society in an intangible way. Wal-Mart monitors how efficiently and honestly the suppliers provide the goods to Wal-Mart. Who is watching Wal-Mart to ensure they are not using all this data for an ulterior motive that hasn't been revealed yet. All you need is one stray Wal-Mart CEO whose vision does not align with the company strategy and everything could change. All you need is one security leak or hack on the Wal-Mart's database and millions of customer's identity could be jeopardize. I believe the government should regulate Wal-Mart's effort to secure the data collection and also monitor how the data is being used. If the government could perform an audit on the Wal-Mart methodology of data collection and analysis and ensure the customers that their privacy is not being compromised, I would feel much comfortable. However, knowing how massive Wal-Mart is and the power it holds in certain countries, I doubt the government will have the power to audit the self-proclaimed auditor.