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Walmart Luminate Exec on Outperforming Amazon in Selling Customer Data

 1 year ago
source link: https://www.businessinsider.com/walmart-thinks-it's-beating-amazon-in-monetizing-customer-data-2022-6
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Walmart's data lead outlines his strategy for competing with Amazon after growing the retailer's data-monetization platform by 75% last quarter

Walmart Luminate is a data monetization platform in which suppliers can access information on shopper behavior, customer perception and more.

Walmart Luminate is a data-monetization platform through which suppliers can access information on shopper behavior, customer perception, and more. Walmart

  • Walmart Luminate saw 75% growth quarter over quarter to start the year.
  • Mark Hardy, Walmart's data head, said the platform provides insights to users "in an agile manner."
  • Amazon passed Walmart in largest share of retail spending in the US in 2021, a research firm said.

Mark Hardy, Walmart's head of data ventures, didn't mince words when comparing longtime rival Amazon's data plans to those of his own company.

"Everything they're doing is disparate initiatives," said Hardy, who has been with Walmart for about 2 ¹⁄² years. "They are not bringing it all together, where Walmart has brought it all together and has a strategy of a closed-end ecosystem."

That "closed-end ecosystem" Hardy referenced is Walmart Luminate, the company's rapidly growing data-monetization platform. The platform launched in October to provide a suite of data products to merchants and suppliers who stock Walmart's shelves and experienced over 75% revenue growth between the final quarter of last year and the first quarter of this one, as well as 50% growth in the number of suppliers onboarding. 

Luminate is part of Walmart's larger plan to diversify its services for other retailers and to expand its tech footprint.

Walmart has not said much publicly about Luminate, and Hardy was hush-hush about certain topics during an interview with Insider. For example, Hardy would not disclose how many suppliers had purchased the data-products suite when asked, nor would he say how much it cost suppliers to use the platform. He said that was "proprietary information."

But Hardy did give Insider one of the most detailed descriptions to date of Walmart's data-monetization platform — as well as what it can mean for a retail giant that is aggressively trying to lean into the tech space and compete with Amazon.

'What we're doing is groundbreaking'

Walmart is aiming to improve its data monetization business with Luminate. Bob Chamberlin/Getty Images

Hardy broke down Luminate into three primary functions: observing shopper behavior, understanding customer perception, and analyzing which channels (online versus in-store versus in-app) people are using to purchase products.

Data on shopper behavior, or the basket composition and buying trends of types of customers, has been available to suppliers for years, typically through secondary research companies, such as Nielsen or Information Resources Inc.

The distinction with Luminate is the "scale of data," he said. "The granularity possible in the analytics is what is very different from what would have been available anywhere else in the marketplace."

Meanwhile, with the customer-perception component, Walmart has allowed merchants and suppliers to conduct proprietary surveys with specific customers, or what Hardy and his colleagues have called "a community of shoppers." The data is aggregated and de-identified, Hardy said.

Luminate pulls together these functions — shopper behavior, customer perception, and channel performance — all in one platform to streamline the data analytics: "What we're doing is groundbreaking — not just for Walmart but for the industry in itself," Hardy said.

"We're building the right ecosystem that drives the right insights in a very agile manner, but then allows us to quickly apply those insights to then become more relevant to the customers," he added.

'Amazon does not have that presence across the omnicommerce world that Walmart does'

Amazon has several data initiatives. Glassdoor

Walmart's data-monetization-platform growth comes as the Bentonville, Arkansas, retailer faces increased competition from the tech-native company Amazon. The Seattle e-commerce company had the largest share of retail spending for the first time ever in the United States by the end of 2021, claiming a 9.4% share of retail buying last year versus Walmart's 8.6% portion, the research firm PYMNTS said.

Amazon has been aggressive in the data space for quite some time: In 2019, Amazon Web Services, the company's massive subsidiary, launched AWS Data Exchange, which allows millions of suppliers, retailers, and other customers "to securely find, subscribe to, and use third-party data in the cloud," a post announcing the initiative said.

Hardy acknowledged that he was "only aware of some of the areas that Amazon has been on," such as the company's creation of a community to do customer-feedback surveys.

But he believed Walmart had taken its data game to the next level: Beyond having more of a unified approach to data collection, Hardy said, the company had more of an omnichannel presence than Amazon thanks to Walmart's more than 5,000 physical stores, growing e-commerce presence, and more.

"Walmart really encompasses the full range of options that we as consumers today face in the marketplace," he said. "Amazon does not have that presence across the omnicommerce world that Walmart does."

Do you work at Walmart, or are you a Luminate customer? Contact the reporter Ben Tobin via the encrypted messaging app Signal +1 (703) 498-9171 or email at [email protected]. Check out Insider's source guide for other tips on sharing information securely.


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