Facebook, Wal-Mart Relationship Could Rely on Big Data

As pointed out by some diligent Slashdot readers this morning, Facebook CEO Mark Zuckerberg and his executives are meeting today with Wal-Mart CEO Mike Duke and other high-level representatives from the big-box retailer. The topic of discussion, according to Reuters, is ways to “deepen” the relationship between the two companies.

Details beyond that seem sparse, but it’s hard to ignore some of the elements in play. Facebook, despite its massive base of 800 million users, is always on the hunt for ways to expand its reach. Wal-Mart, although a ubiquitous presence in some areas of the country, faces a significant amount of competition online from Amazon and other retailers.

Both companies also possess gargantuan amounts of customer data, which can be mined for any number of insights into shopping behavior. “Before anyone else, [Wal-Mart] understood that all this aggregated data represented their competitive advantage: the ability to predict customer buying behavior,” Mary Ludloff, vice president of marketing at analytics-vendor PatternBuilders, wrote in a blog posting back in January 2011. “Way back in 1991, Wal-Mart invested $4 billion to create RetailLink, their über sales database, and use innovations like bar codes and EDI (pre-internet) before anyone else did.”

(Tip of the hat to Slashdot reader Jeremiah Cornelius for digging up that posting.)

By 2004, Wal-Mart had 460 terabytes of stored data—a number that surely increased by a significant percentage in subsequent years. “They use their data to drive pretty much every decision they make about their business,” Ludloff added. “Wal-Mart is watching everything that is happening in their business in as near to real-time as they can get.”

Tools already exist for monitoring brand interactions across a variety of social-networking sites; in fact, as time goes on, it seems that nearly every B.I. platform on the market is duty-bound to include a “social” layer atop its analytics offerings. Toward that end, Oracle and Salesforce both recently acquired social-marketing startups.

A deep partnership between Facebook and Wal-Mart, at least in theory, could allow the latter to respond quickly to negative comments posted on the social network; or else use wall postings and other data to target deals at specific demographics. But any sort of data mining could also trigger privacy concerns—and possible backlash—from customers.

 

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