Part II – How Walmart is leveraging the power of digital innovation to optimise its infrastructure and better serve its customers
Walmart is a global retailer with 2.3 million employees (with 1.5 million in the US alone), 10,000 brick-and-mortar stores and nearly $500 billion in annual revenue. It also happens to manage the world’s largest private cloud, big enough to process 2.5 petabytes of real-time data every hour from 200 streams of internal and external data, including 40 petabytes of recent transactional data.
The retailer has been developing six giant server farms, each larger than ten football fields, over the last five years in a bid to increase its share in the e-commerce business and to become more agile as an organisation. By closely analysing transactional data, the company has so far been able to streamline the customer returns process, by which customers can return online purchases to their local stores, by 60 percent. It can now maintain its famously low prices through price adjustments at its physical locations almost instantly across entire regions. Jeremy King, Walmart’s chief technology officer, recently told Reuters that Walmart can now make over 170,000 monthly changes to the software that supports its website, compared to less than 100 changes previously.
In addition to this transformative change, Walmart and Microsoft have just announced an important and strategic five-year agreement. Walmart will begin using Microsoft’s technology to accelerate the pace of Walmart’s digital transformation in retail, provide its global workforce with real-time data analysis and make shopping faster and easier for millions of customers around the world.
Walmart is already using Microsoft’s services for applications and workloads. According to their joint statement, this agreement will see the implementation of cloud innovation projects that leverage machine learning, AI and data platform solutions to analyse the real-time value of every customer’s actions and reactions for a wide range of external customer-facing services and internal business applications.
The retail giant is also one of only a handful of serious competitors to Amazon in the retail space while Microsoft is up against Amazon Web Services (AWS), who has 26% of market share in the cloud computing space. Walmart has even reportedly asked some vendors in the past to avoid running applications on AWS to keep “sensitive data” away from its competitor’s servers.
This rivalry is not lost on Microsoft CEO Satya Nadella, who seems focussed on utilising the resources of both companies to create a competitive advantage. Indeed, there are reports that Microsoft is in talks with Walmart about reproducing Amazon Go technology, and the software maker has hired a computer vision specialist from Amazon. Microsoft is also reportedly experimenting with attaching cameras to shopping carts to track items.
Walmart is clearly benefitting from the intensely competitive nature of today´s technology market, as vendors continue to drive the pace of innovation on behalf of their clients. Walmart´s customers can only benefit from a future where their interactions are tailored to meet their needs specifically, no matter how or when they choose to shop with the retailer.
About the author: Cecilia Floridi is a Customer Management expert based in Düsseldorf, Germany. She is also the Managing Director of DataLab. GmbH.