Wal-Mart

The key to Wal-Mart’s success is their advanced Information Technology capabilities and their ability to improve the customer experience based on this. In the retail industry, obviously one negative experience is to go to the store and the product you went to the store to buy is not available. By being able to closely track inventory, Wal-Mart is able to ensure that this occurs at a minimum. Wal-Mart is also able to react to spikes in demand for example as the article discusses when there is a hurricane. Also another negative customer shopping experience is waiting in a long check out line. Wal-Mart is able to estimate how many cashiers they need to have working at any given time to ensure fast check out times. Based on my personal experience, it is clear that HEB does not have this technological capability. I actually go to the grocery store much less than I would otherwise due to this fact. I buy a lot of items from CVS due to the shorter lines unless I need to buy a lot of items.

I believe there are areas where Wal-Mart could better use their IT to improve the customer experience. One would be working with their suppliers to develop better products. Based on the article, Wal-Mart is very guarded in terms of the information it gives to its suppliers. If it could share information on its customer’s preferences to its suppliers then perhaps they could improve upon their products. For example, what types of packaging sell the best could be useful information for suppliers. Another area where Wal-Mart could use IT to improve the customer experience is to track customers shopping in their stores and watch how they make purchases. For example, what types of displays do customers prefer and buy from? This brings up privacy issues, as I am not sure I would want Wal-Mart tracking me personally when I enter their store.

In terms of privacy issues and Wal-Mart’s huge database of customer information, my greatest concern is not what Wal-Mart might do with the information but what would happen if hackers were able to break into their systems and steal it. Russian and Chinese crime syndicates have made millions off of stealing people’s personal information and have been able to get a lot of this information by hacking into supposedly secure databases. No security system is full-proof and the thought of criminals hacking into Wal-Mart’s systems greatly concerns me. In terms of Wal-Mart’s use of the information, there is always pressure to find new ways to become more profitable. There will always be a temptation to use the information in perhaps ways that are not completely ethical to improve their bottom line. I therefore am hesitant to trust them with this information. I believe there should be strict regulations in terms of what Wal-Mart can do with the information and what information they are allowed to keep on their customers.

I think Wal-Mart has both a positive and negative impact on its suppliers. I know Wal-Mart in fact has put suppliers out of business due to their demanding nature. However, Wal-Mart by being the 800-lb gorilla that almost all companies have to deal with can push through changes that are in the best interest of all their suppliers. RFID tags is one example of this. Wal-Mart is forcing their suppliers to move in the direction of using RFID tags to track their inventory. This is really in the best interest of all parties as it will cut down on un-used inventory. However, if it were not for Wal-Mart no parties would adopt because it will create a short term cost increase until economies of scale are meet which almost no individual supplier could meet on its own.