It’s official. The world’s largest retailer has become a digital Orwellian Big Brother, keeping tabs on what you buy online, and using a cache of so-called “big data” to suggest future purchases.
No, we’re not talking about Amazon (AMZN). Although it’s the world’s biggest e-commerce player, consumers have pretty much conceded any expectation of privacy when shopping on Amazon. We aren’t talking about Google (GOOGL) either, which essentially tracks everything you do online and has come to symbolize the idea of big data.
We’re talking about the world’s biggest brick-and-mortar retailer, Walmart (WMT). The behemoth is personalizing its homepage to suit each shopper, not only displaying that customer’s local weather forecast, but to recommend purchases based on that shopper’s past purchases, and even that user’s past searches.
The consequences of this news aren’t anything particularly dramatic … and that’s the scary part.
Walmart has been in the big data business for a while, but is now putting its data collection to blatant commercial use. But now that consumers are quite used to being profiled, poked and prodded online, however, news of the Monday’s new online sales approach was largely dismissed. It’s a subtle clue that most folks have given up on not being a well-defined target customer.
Score another win for big data.
A Drop in the Digital Profiling Bucket
The overhaul for the Walmart website, which serves as an information page for its stores as well as an entry page to its online shopping portal, won’t take effect until the beginning of next year, but there’s little doubt it will boost sales even more than they’ve already been boosted for the retailer.
Last fiscal year, Walmart managed to pump up its e-commerce revenue by 30%, reaching $10 billion. That’s only a tiny fraction of the company’s total sales of $476 billion. But, the migration of consumers — all consumers — from in-stores to online is both undeniable and unstoppable. The decision from Walmart is just good business.
To be clear, however, it’s not like Walmart is the only company out there getting a little bit too nosy with its marketing efforts, getting presumptuous if not downright predictive. The aforementioned Google and Amazon have been digging into your personal life for years, not only keeping a big data file of your shopping and browsing activity on their sites, but looking at all of your browsing history in order to customize the ads and offers you see.
It goes well beyond Amazon and Google, though, and it’s not just for advertising purposes…
There are plenty of ways that companies can profile you online, and myriad reasons for them to do it. A potential employer may be reading your digital fingerprint, not just to aggregate the content of what you say and do online, but to use the context of your posts to determine the kind of person you are.
In November, IBM (IBM) announced it was putting the finishing touches on software that could read through your Twitter (TWTR) and Facebook (FB) posts to decide whether or not you’re an ideal fit for a job, or an ideal target consumer for a particular advertisement. Those who use longer words, for instance, are supposed to get along better with coworkers, while independent people tend to use the word “school” more than the average amount.
Consumers are becoming online big data guinea pigs too, for all the wrong reasons.
Facebook recently announced that in 2012 — as part of an effort to determine if too much good news posted on a user’s newsfeed was depressing (for comparative reasons) — it deliberately displayed an inordinate amount of negative news. Fortunately, the company found out that users didn’t begrudge the happiness of other users, but it raises the question … why perform such an experiment in the first place?
How do we know a company that’s willing to yank a user’s chain won’t also be willing to spur specific feelings in an effort to spur clicks on certain kinds of advertisements? We don’t.
Big Data Personalization Will Accelerate Adoption
The new Walmart e-commerce strategy seems relatively benign, and it is. Still, the bigger big data gets, the faster and bigger it can get in the future. And, with Walmart — the word’s biggest retailer — leveraging its big data to the hilt, it’s pretty safe to say the practice of using big data is the new norm. What would be odd now is if a corporation wasn’t trying to profile a consumer, or at least trying to buy access to the data packed within a profile.
With all of that being said, while a few conspiracy theorists still protest the advent of digital profiling, there’s a distinct lack of balking from consumers anymore when it comes to suggesting (and even predicting) online purchases. We’re at the point where people and their portable, web-enabled devices have become one.
Indeed, with smartphones and data becoming cheaper as well as being perceived as more beneficial, the rate of mobile-web adoption is poised to accelerate, further prodding the implementation of big data marketing efforts. Big data and targeted marketing will be old news within two years, if only because consumers have forgotten there was a time when digital profiling didn’t exist.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.