• by Ranjith Kumaran , August 12, 2014

With the Internet of Things (Everything) bearing down on retailers (and everyone), marketing efforts can’t just be digitally focused anymore -- they need to be fully integrated, information-gathering Big Data efforts. Sound overwhelming? It is.

And Walmart has just taken a running leap into this space.

According to Advertising Age: “Walmart met recently with around 200 supplier marketing executives in part to discuss the Walmart Exchange, or WMX, which its executives bill as a digital targeting, buying and optimization platform that will bring everything from sales to social-media data to bear on spending plans for Walmart and its suppliers.”

What IS this Walmart Exchange (WMX), and why should competitors fear it?

WMX Plans to Apply Big Data to Marketing

This effort will hinge on creating a database populated by Walmart’s store sales, social media efforts, third-party data and information shoppers offer via its Savings Catcher Program. From all of that, they will create various customer segments and market to them on behalf of suppliers.

Sounds pretty fantastic. And it could work, but such a database, which they’re touting as “real-time,” will be quite a feat to pull off. Right now, there are a variety of companies sporting Big Data servers offering close to real-time results; and that’s their entire business model. They aren’t peddling foodstuffs -- and, well, everything else -- on the side.

Can They Deliver on Such a Huge Promise?

Time will tell, but they’re making steps in the right direction -- the Omni-Channel direction -- by “preparing a pilot that will let people get reviews or other product information on their smartphones by scanning the product ads in its newspaper and direct mail.” If they continue on THIS path and can nail smartphones and integrate as planned, this, more than anything, will set them ahead of competitors. The rest is gravy.

However, with such an early start, WMX is positioned to pull in participants and sort things out as it goes, should it choose to do so. The market is young, and suppliers understand their odds in this fiercely competitive market. Casting your die with a Walmart-sourced market segment might end up offering the smartest bang for one’s advertising buck.

"The big bet we're placing is that almost all media will eventually be addressable in one form or another, and so all this capability and the infrastructure under it will only grow in value to us," U.S. Chief Marketing Officer Stephen Quinn said in a recent Ad Age article. "So it's a big shift in the entire advertising world toward digital solutions and that's where we're going with broadcast. We use our own data to help us inform our television buys so we're reaching the right customers. And that's true even of our print."

It All Comes Back to Personalization

The key, of course -- and what makes this a very clever concept -- is this: Walmart understands that the agile enterprise of tomorrow must master the personalized shopper experience today.

Walmart’s legacy strategy of positioning itself as the go-to source for the best prices all around is slowly becoming less and less effective when faced with customers searching for a variety of alternatives online -- and one-day shipping (and the demand for efficient shopping experiences) is putting pressure on everyone.

There are also unpredictably viral social network-powered offers and deals to contend with, not to mention flash sales that do a tremendous job of curating to tastes, preferences and behaviors.

Creating its own Big Data source won’t be a new effort, of course -- as robust loyalty programs offer that and more -- but offering their data to inform and make ad buys for suppliers will be an interesting development to follow.

The concept allows them to stay true to their core value proposition, while paving the way for a more consistent, personalized shopping experience that consumers are beginning to expect online and offline -- and that retailers (whether they realize it yet or not) are going to be jumping through hoops to provide.