CASE STUDY: WAL-MART

STORES, INC
PREPARED BY :
ANIDA SALLEH ()
AZURA AWANG (2014384967)

1. INTRODUCTION
Wal-Mart is well-known American company that operating retail stores including grocery stores,
discounts warehouse clubs and combination of general merchandise store. The Every Day Low
Price (EDLP) strategy makes Wal-Mart different from its competitors. The company divided
into three sections: a segment inside the U.S, Sams club and International Segment of Wal-Mart.
In Fiscal year 2013, 58.89% total sales are considered by Wal-Mart U.S. which is the biggest
segment, 29% from Wal-Mart International and 12.11% total sales from Sams Club (Gough,
2013). The company sells electronic items, baby & kids clothing, video games, toys, fitness and
sports instruments, jewelry, groceries and so many other things. The annual revenue of the WalMart is greater than the GDP of Switzerland (Brenner, Eidlin and Candaele, 2006). According to
Fortunes ranking, the 2nd largest company in the world is Wal-Mart by revenues almost $469.2
billion (Hayes, 2013). Wal-Mart is omnipresent in the U.S. It is the biggest retailer in the world
and in many aspects just as well the biggest company in the world.

2. COMPANY HISTORY
The Store called Wal-Mart, founded in 1962 by Sam Walton along with his brother Bud in
Rogers, Arkansas. He was running a store already before opening the Wal-Mart named Waltons
Five and Dime, which was a franchise of Ben Franklin. The new business model of Sam
Waltons was different from other traders not only in terms of discount but he also focused on
opening stores in small towns. At the beginning he opened more stores in Arkansas but later he
expanded Wal-Mart to Oklahoma and Missouri in 1968 (Brenner, Eidlin and Candaele, 2006). In
1972, the company listed in the New York Stock Exchange (NYSE) (Lorea, 2009). Walton
group also introduced the Sams Club warehouse store and opened other stores in Iowa,
Nebraska and Indiana in 1983. During 1980s, the company rises considerably by reaching $25.8
billion sales with almost 1,525 stores and 271,000 workers at the end of the decade. The year
1992 was not good for the Wal-Mart as Walton died in this year and after 3 years his brother and
the co-founder of Wal-Mart Bud Walton also died in 1995 (Brenner, Eidlin and Candaele,
2006).
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In 1990s, Wal-Mart has considered as the largest retailer of the nation and it continued the
Walmart started using big data even before the term big data became known in the industry and
in 2012 they moved from an experiential 10-node Hadoop cluster to a 250-node Hadoop cluster.
At the same time they developed new tools to migrate their existing data on Oracle, Netezza and
Greenplum hardware to their own systems. The objective was to consolidate 10 different
websites into one website and store all incoming data in the new Hadoop cluster. Since then they
have made big steps in integrating big data into the DNA of Walmart.

Social big data solutions

Many of the big data tools have been developed at the Walmart Labs, which was created after
Walmart took over Kosmix in 2011. Some of the products that were developed at Walmart Labs
are Social Genome, ShoppyCat and Get on the Shelf.
The Social Genome product allows Walmart to reach customers, or friends of customers, who
have mentioned something online to inform them about that exact product and include a
discount. In order to do this they combine public data from the web, social data and proprietary
data such as customer purchasing data and contact information. This has resulted in a vast,
constantly changing, up-to-date knowledge base with hundreds of millions of entities and
relationships. It helps Walmart to better understand the context of what their customers are
saying online. An example mentioned by Walmart Labs shows a woman tweeting regularly about
movies. When she tweets I love Salt, Walmart is able to understand that she is talking about
the movie Salt and not the condiment.
Walmart came across several technical difficulties when developing the Social Genome, among
others the quantity and velocity the data pours into their Hadoop clusters. As the regular MapReduce/Hadoop framework was not able to cope with the amount and speed the data was coming
in, they have developed their own tool called Muppet. This, now open-source, tool processes the
data in real-time over all clusters and can perform several analysis at the same time.
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The Shoppycat product that was developed by Walmart is able to recommend suitable products
to Facebook users based on the hobbies and interests of their friends. It uses the Social Genome
technology among others to help customers with presents for their friends. An interesting aspect
of this Facebook App is that Walmart will direct the Facebook users to a different store in case
the product is sold out at a nearby Walmart store.
Get on the Shelf was a crowd-sourcing solution that gave anyone the chance to pitch his or her
product in front of a large online audience. The best products would be sold at Walmart with the
potential to suddenly reach millions of customers. Over a million votes were cast and in the end
three products are now carried in the Walmart stock.
Mobile big data solutions
With over 200 million customers visiting a Walmart store every week, it is obvious that Walmart
aims big at the mobile development. They have developed several iOS and Android Apps that
use the latest technology to give their customers the best experience. They even created a few of
their own tools and subsequently open-sourced them. These are Thorax and Lumbar. Thorax is
framework to build large-scale web applications and Lumbar is a js-build tool that can generate
modular platform specific applications.
But there is more of course. As can be expected from the largest retailer in the world, Walmart
has an extensive big data ecosystem. This system processes multi-TBs of new data and PBs of
historical data on a daily basis, covering millions of products and 100s of millions users from
internal and external sources. They analyse over 100 million keywords to optimize the bidding of
each keyword on a daily basis. The ecosystem is schematically shown in below visual:
Big Data at Walmart ecosystem
All the big data efforts of Walmart are a good example of the massive possibilities of what can be
done if big data is truly incorporated in the DNA of the company. Already, Walmart is able to
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optimize the local assortment of Walmart stores based on what the customers in the
neighbourhood are saying on social media. When Walmart combines all big data efforts with
their mobile efforts truly exciting solutions can be created. They are also developing in-store
mobile navigation using personal smartphones and with that they can steer their customers
through aisles of products they have been talking about on social media and therefore are more
willing to buy. Of course, resulting in more revenue for the already largest retailer in the
worldachievements by opening more stores within the country and outside the country. In
Canada, the company bought 122 Woolco stores and built three stores in Argentina and five
stores in Brazil in 1995. It penetrated in China all the way through joint venture in 1994. In
Germany 1997, Wal-Mart acquired 74-unit INTERSPAR hypermarket chain and the 21-store
WERTKAUF chain. Later on in 1998, the company entered in Korea with joint venture and
after one year it went to UK and bought the UKs third largest grocery chain called ASDA.
The company entered in Japan by buying a 36% stake of Seiyu in 2002 and Wal-Mart steadily
increased its stake about 67% by 2007 (Brenner, Eidlin and Candaele, 2006). According to fiscal
year sales of Wal-Mart is about $469.2 billion in 2013 with 2.2 million workers acquaintances
worldwide and 11,000 stores under 69 banners in 27 countries (Walmart, 2013). Social Media
Data is unstructured, informal and generally ungrammatical. Analysing and mining petabytes of
social media data to find out what is important and then map it to meaning products at Walmart is
an arduous task.
Social Media Data driven decisions and technologies are more of a norm than an exception at
Walmart. A big part of Walmarts data driven decision are based on social media data- Facebook
comments, Pinterest pins, Twitter Tweets, LinkedIn shares and so on. WalmartLabs is leveraging
social medial analytics to generate retail related big data insights.
Walmart launched a social media crowdsourcing contest that helped entrepreneurs get their
products on the shelf. The contest attracted more than 5000 entries and more than 1 million votes
across US. Anybody could pitch in their products and get exposure to millions of audience. The
best products were declared as winners and sold at Walmart stores to be made available to
millions of customers.

Social Media Analytics is all about mining retail-related insights from social channels, a
perilous and personally exciting task to us. When our team spent the 22nd of November
feverishly following the social retail pulse on Black Friday, we knew the world wasnt preparing
for an apocalypse.- said Arun Prasath, a Principal Engineer at WalmartLabs
Social Genome
Social Genome is a big data analytics solution developed by WalmartLabs that analyses millions
and billions of Facebook messages, tweets, YouTube videos, blog postings and more. Through
the Social Genome analytics solution, Walmart is reaching customer or friends customers who
tweet or mention something about the products of Walmart to inform them about the product and
provide them special discount. The Social Genome product combines public data from the web,
social media data and proprietary data like contact information, email address and customer
purchasing data. This data helps Walmart better analyse the context of their users.
For example, if the Social Genome identifies that a lady frequently tweets about movies, then
when she tweets something like I love Salt, the social genome solution of Walmart is able to
understand that the lady is referring to the popular Hollywood movie Salt and not the condiment
salt.
It is only after conquering all of these multifold challenges that meaningful recommendation
can be made.Our social media analytics project operates on top of a searchable index of 60
billion social documents and helps merchants at Walmart monitor sentiments and popular
interests real-time, or inquire into trends in the past. One can also see geographical variations of
social sentiments and buzz levels. There are also tools that marry search trends on walmart.com,
sales trends in our brick-and-mortar stores and social buzz all in one place, to help make
correlations. Together, these tools provide powerful social insights.- said Arun Prasath, Principal
Engineer at WalmartLabs.
Shopycat-Gift Recommendation Engine at Walmart

If you are confused on finding the perfect gift for your friends then Walmarts Shopycat app will
help you buy the ideal gift for your friend during the holiday buying rush. Walmarts Shopycat
recommends gifts for friends based on the social data extracted from their Facebook profiles. The
app also provides links to the Walmart products so that users can easily purchase the product
without any hassle and strive towards creating a broader marketplace. Shopycat is a part of
Walmarts Facebook page that has close to 10 million fans.
The app also suggests friends for whom users must by gifts depending on the level of interaction
with them. When people click on a suggested gift, Shopycat also tells why a particular gift was
suggested. For instance, the suggestions can show that a friend has liked the product on
Facebook or has commented on a wall post or has a status update related to the product.
Shopycat allows the users to message their friends mutually through Facebook and ask them if
they would like to buy a gift voucher or a product.
Inventory Management at Walmart using Predictive Analytics
Predictive analytics is at the heart of supply chain process that helps Walmart reduce overstock
and stay properly stocked on the most in-demand products. Suppliers to Walmart are required to
use the real-time vendor inventory management system that helps them minimize the inventory
for a particular product if there are no significant sales for it. This helps retailers to save funds to
buy products that have greater demand and have increased probability for greater profits.

Mobile Big Data Analytics Solutions

According to Deloitte, the mobile influenced offline sales are anticipated to reach $700 billion by
end of 2016. Walmart is harnessing the power of big data to drive tools and services in order to
get its mobile strategy in order.

More than half of the Walmarts customers use Smartphones and among these 35% of the
shoppers are adults which is close to 3/4th of its overall customer base. Mobile phone customers
are extremely important to Walmart as smartphone shoppers make 4 more trips and spend 77%
more in-store. Thus, mobile users account for 1/3rd of the Walmart traffic every year and
approximately 40% during holidays.
E-commerce is closely related to mobile purchase. The worlds largest retailer will use big data
to enhance the consumers shopping experience in the store. He also added: Our mobile
strategy is both simple and audacious. We want to make mobile tools become indispensable for
our customers while they are shopping in our stores and online. The retail will improve each
customers personalized experience for competition in the future, and this all will happen on the
small screen in their hands, said Gib Thomas, Senior Vice President of Mobile and Digital at
Walmart
Walmart is leveraging big data analysis to develop predictive capabilities on their mobile app.
The mobile app generates a shopping list by analysing the data of what the customers and other
purchase every week. Walmarts mobile application consists of a shopping list that can tell
customers the position of their wants and helps them by providing discounts to similar products
on Walmart.com.
Another way in which Walmart is harnessing the power of big data analysis is by levraging
analytics in real-time- when a customer actually enters the Walmart store. The geofencing feature
of Walmarts mobile app senses whenever a user enters the Walmart store in US. The app asks
the user to enter into the Store Mode. The store mode of the mobile app helps users to scan QE
codes for special discounts and offers on products they would like to buy.
3. REASONS FOR DATA TECHNOLOGY IMPLEMENTATION
Walmart was the worlds largest retailer in 2014 in terms of revenue. Walmart makes $36 million
dollars from across 4300 retail stores in US, daily and employs close to 2 million people.
Walmart started making use of big data analytics much before the term Big Data became popular
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in the industry. In 2012, Walmart made a move from the experiential 10 node Hadoop cluster to a
250 node Hadoop cluster. The main objective of migrating the Hadoop clusters was to combine
10 different websites into a single website so that all the unstructured data generated is collected
into a new Hadoop cluster. Since then, Walmart has been speeding along big data analysis to
provide best-in-class e-commerce technologies with a motive to deliver pre-eminent customer
experience.
Walmart acquired a small startup Inkiru based in Palo Alto, California to boost its big data
capabilites. Inkiru Inc. helps in targeted marketing, merchandising and fraud prevention. Inkiru's
predictive technology platform pulls data from diverse sources and helps Walmart improve
personalization through data analytics. The predictive analytics platform of Inkiru incorporates
machine learning technologies to automatically enhance the accuracy of algorithms and can
integrate with diverse external and internal data sources. Walmart has a broad big data
ecosystem. The big data ecosystem at Walmart processes multiple Terabytes of new data and
petabytes of historical data every day. The analysis covers millions of products and 100s of
millions customers from different sources. The analytics systems at Walmart analyse close to 100
million keywords on daily basis to optimize the bidding of each keyword.

Walmart has transformed decision making in the business world resulting in repeated sales.
Walmart observed a significant 10% to 15% increase in online sales for $1 billion in incremental
revenue. Big data analysts were able to identify the value of the changes Walmart made by
analysing the sales before and after big data analytics were leveraged to change the retail giants
e-commerce strategy.
First Applications to Ride the Hadoop Data at Walmart

Savings Catcher An application that alerts the customers whenever its neighbouring
competitor reduces the cost of an item the customer already bought. This application then

sends a gift voucher to the customer to compensate the price difference.

eReceipts application provides customers with the electronic copies of their purchases.
A mapping application at Walmart uses Hadoop to maintain the most recent maps of
1000s of Walmart stores across the globe. These maps specify the exact location where a
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small bar of soap resides in the widespread Walmart store. Walmart uses data mining to
discover patterns in point of sales data. Data mining helps Walmart find patterns that can
be used to provide product recommendations to users based on which products were
bought together or which products were bought before the purchase of a particular
product. Effective data mining at Walmart has increased its conversion rate of customers.
A familiar example of effective data mining through association rule learning technique
at Walmart is finding that Strawberry pop-tarts sales increased by 7 times before a
Hurricane. After Walmart identified this association between Hurricane and Strawberry
pop-tarts through data mining, it places all the Strawberry pop-tarts at the checkouts
before a hurricane.
Walmart tracks and targets every consumer individually. Walmart has exhaustive customer data
of close to 145 million Americans of which 60% of the data is of U.S adults. Walmart gathers
information on what customers buy, where they live and what are the products they like through
in-store Wi-Fi.The big data team at Walmart Labs analyses every clickable action on
Walmart.com-what consumers buy in-store and online, what is trending on Twitter, local events
such as San Francisco giants winning the World Series, how local weather deviations affect the
buying patterns, etc. All the events are captured and analysed intelligently by big data algorithms
to discern meaningful big data insights for the millions of customers to enjoy a personalized
shopping experience.
4. BENEFITS OF USING DATA TECHNOLOGY

Launching New Product

Walmart is leveraging social media data to find about the trending products so that they can be
introduced to the Walmart stores across the world. For instance, Walmart analysed social media
data to find out the users were frantic about Cake Pops .Walmart responded to this data
analysis quickly and Cake Pops hit the Walmart stores.

Better Predictive Analytics

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Walmart has recently modified its shipping policy for products based on big data analysis.
Walmart leveraged predictive analytics and increased the minimum amount for an online order to
be eligible for free shipping. According to the new shipping policy at Walmart, the minimum
amount for free shipping is increased from $45 to $50 with addition of several new products to
enhance the customer shopping experience.

Customized Recommendations

Just the manner in which Google tracks tailor made advertisements, Walmart's big data
algorithms analyse credit card purchases to provide specialized recommendation to its customers
based on their purchase history

5. IMPLEMENTATION ISSUES
Walmart Big Data is increasing exponentially at a rapid pace every day and the dearth of big data
talent is a major roadblock for Walmart in performing analytics. With limited number of
personnel possessing required big data skills Walmart is taking every necessary step to
overcome this challenge is that it does not have to fall behind its competitors. Whenever a new
team member jobs the analytics team at Walmart Labs, he/she has to take part in the analytics
rotation program. During this program the candidates are required to spend some time with the
different departments in the company to understand how big data analytics is being leveraged
across the company.
Walmart is having a tough time finding professionals with experience in cutting edge analytics
applications and working knowledge of data science programming languages like Python and R
to build machine learning models. Walmart used the hashtag #lovedata for its recruitment
campaign to raise its profile amongst the growing data science community in Bentonville and
Arkansas.
Mandar Thakur, senior recruiter for Walmarts Technology division said The staffing supply
and demand gap is always there, especially when it comes to emerging technology. With more
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than 40 petabytes of data available for analysis daily at Walmart, he says that there is going to be
an unprecedented demand always for people who can do data science and analytics. The secret
to successful retailing of Walmart lies in delivering the right product at the right place and at the
right time. Walmart continues to climb the retailing success ladder with remarkable results by
leveraging big data analysis.
Walmart is fighting the big data skills gap by crowdsourcing analytics talent. Walmart hosted a
Kaggle competition in 2014 where professionals where provided with historical sales dataset
from sample of stores together with related sales events, price rollbacks and clearance sales.
Candidates has to develop models that showed the impact of these events on the sales across
various departments. The result of the competition helped Walmart find highly skilled and
competent analytics talent.
In 2015, Walmart crowd sourced analytic talent with another Kaggle competition where
candidates were required to predict the impact of weather on sales of different products in the
store. Walmart has been able to hire skilled talent through these competition which they would
not consider even interviewing based on the resume alone. Mandar Thakur, senior recruiter for
Walmarts Technology division said- One for example had a very strong background in physics
but no formal analytics background. He has a different skillset and if we hadnt gone down the
Kaggle route, we wouldnt have acquired him.

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