MIEIC_MKT_Caso 1_Walmart - MIEIC MCI MARKETING CASO 1 What Wal-Mart Knows About Customers Habits By Constance L Hays New York Times November 14 2004

MIEIC_MKT_Caso 1_Walmart - MIEIC MCI MARKETING CASO 1 What...

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1 MIEIC/ MCI MARKETING CASO 1 What Wal-Mart Knows About Customers' Habits By Constance L. Hays, New York Times , November 14, 2004 HURRICANE FRANCES was on its way, barreling across the Caribbean, threatening a direct hit on Florida's Atlantic coast. Residents made for higher ground, but far away, in Bentonville, Ark., executives at Wal-Mart Stores decided that the situation offered a great opportunity for one of their newest data-driven weapons, something that the company calls predictive technology. A week ahead of the storm's landfall, Linda M. Dillman, Wal-Mart's chief information officer, pressed her staff to come up with forecasts based on what had happened when Hurricane Charley struck several weeks earlier. Backed by the trillions of bytes' worth of shopper history that is stored in Wal-Mart's computer network, she felt that the company could "start predicting what's going to happen, instead of waiting for it to happen," as she put it. The experts mined the data and found that the stores would indeed need certain products - and not just the usual flashlights. "We didn't know in the past that strawberry Pop-Tarts increase in sales, like seven times their normal sales rate, ahead of a hurricane," said Ms. Dillman. "And the pre-hurricane top-selling item was beer." Thanks to those insights, trucks filled with toaster pastries and six-packs were soon speeding down toward Wal-Marts in the path of Frances. Most of the products that were stocked for the storm sold quickly, the company said. Such knowledge, Wal-Mart has learned, is not only power. It is profit, too. With 3,600 stores in the United States and roughly 100 million customers walking through the doors each week, Wal-Mart has access to information about a broad slice of America - from individual Social Security and driver's license numbers to geographic predisposition for cookies, or lipsticks, or antifreeze. The data are gathered item by item at the checkout aisle, then recorded, mapped and updated by store, by state, by region. By its own count, Wal-Mart has 460 terabytes of data stored on Teradata mainframes, made by NCR, at its Bentonville headquarters. To put that in perspective, the
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