How Walmart Is Monetizing Its Customers’ Personal Data

Walmart has found an exceedingly effective way to monetize customer data in order to bolster its bottom line.

By Kristi Eckert | Published

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Walmart is exploiting a new way to bolster its bottom line. The retail behemoth is using a new platform to monetize its customers’ data. Its strategy aligns with the company’s larger goal of having more of an e-commerce presence. 

Mark Hardy, Walmart’s head of data ventures, explained how the company’s Luminate software has facilitated an immense illumination of profits. Luminate is a “closed-end system” that collects and identifies shopper patterns and then relays those patterns to the company’s merchants and suppliers. Since beginning to use this software, the retail giant saw a 75% jump in e-commerce revenue growth and a 50% growth in the number of overall suppliers working with its company, according to Business Insider

Walmart is remaining exceedingly tight-lipped about its proprietary software, however, Hardy did reveal some of the ways he has been able to leverage it to the company’s benefit. The software is designed to provide a unique insight into three different categories pertaining to the behavior of Walmart customers. These categories include chronicling customer behavior, understanding how a customer perceives a certain product, and then what products are being purchased on what platform. Hardy went on to disclose, via Business Insider, that what really separates Luminate from other data collection software and allows it to be so effective in monetizing customer data is both the wide breadth of information that it can collect and its ability to analyze that data on a micro-scale. Thus allowing for maximum profitability to be achieved from uniquely extrapolated insights. 

With the help of Luminate, Hardy detailed that he is confident that Walmart will be able to go toe to toe with Amazon and pose some solid competition to the e-commerce giant at that. “Walmart really encompasses the full range of options that we as consumers today face in the marketplace. Amazon does not have that presence across the omnicommerce world that Walmart does,” said Hardy. Essentially, Hardy is saying that Walmart is in a unique position to better reach its customers by means of e-commerce due to its existing and far-reaching brick-and-mortar presence. 

The motivation behind Walmart’s move to really enhance its presence in the e-commerce space, speculatively, is to ensure relevancy in a changing retail landscape. Physical stores, like the likes of Kohl’s and traditional shopping malls, are beginning to drop like flies as the likes of Amazon and other online retailers gain steam. This was only further accelerated by the mitigating circumstances brought on by the pandemic. This is particularly evident in the fact that Amazon’s market share surpassed Walmart’s in 2021 for the first time. As a result of Walmart’s prompt and advantageous action though, it’s not far-fetched to think that Walmart could recapture its lost market share. 

That being said, Amazon became the behemoth that it has for a reason. Amazon has been employing a customer-driven data-monetization strategy similar to Walmart’s for years. All in all, it will certainly be interesting to see how the battle between the competing retail beasts plays out going forward.