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ARTICLE TITLE Walmart's Data Analytics for Optimised Inventory and

Customer Insights

Article · January 2024

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 ARTICLE TITLE
Walmart's Data Analytics for Optimised Inventory and Customer Insights

Author Name 1*
LI SHENHAO

Graduate School of Business,

1

Universiti Kebangsaan Malaysia, 43600 UKM, Bangi, Selangor, Malaysia

[email protected]

ABSTRACT
This assignment aims to explore Walmart's strategic implementation of data analytics and
business intelligence tools to transform its retail operations. Through the strategic utilisation
of data-driven insights, Walmart has effectively conducted a comprehensive analysis of
customer behaviour, resulting in the optimisation of inventory management and the
enhancement of supply chain operations. This assignment aims to thoroughly analyse and
evaluate Walmart's approach, methodology, and the implications it has on decision-making
within the organisation. Additionally, this assignment aims to provide well-informed
recommendations for further enhancing Walmart's strategies (Ma’arif, Safie, Shahar & Hafifi,
2018). Finally, it concludes by emphasising the immense significance of data-driven
strategies in modern retail.
Keywords: Walmart, data analytics, inventory management, customer insights, supply
chain optimisation

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 INTRODUCTION
In the highly competitive retail industry, Walmart has established itself as a pioneering entity
by effectively leveraging data analytics and business intelligence capabilities (Gad-Elrab,
2021). By employing advanced data analysis methodologies, Walmart has successfully
revolutionised its operational strategies, thereby facilitating the organisation's ability to
discern intricate patterns of customer behaviour, enhance inventory management efficiency,
and optimise the functioning of its supply chain network (Rahim, Mohd, Sahari, Safie &
Rahim, 2018). The primary objective of this assignment is to thoroughly examine and analyse
Walmart's data-driven approach, with a specific focus on the methodologies the company
utilises. Furthermore, this assignment seeks to shed light on these strategies' significant
implications and consequences on Walmart's competitive advantage within the highly
competitive retail industry.

METHODOLOGY
Walmart's data analytics strategy is firmly rooted in the meticulous examination of extensive
quantities of customer data acquired through diverse touchpoints, encompassing both in-store
purchases, online transactions, and customer interactions (Wairimu, 2023). Sophisticated data
analytics tools and algorithms are employed to effectively process this vast amount of data,
thereby enabling the extraction of valuable insights about customer preferences, buying
behaviour, and emerging trends in the market.

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The optimisation of Walmart's inventory management is achieved using data-driven
forecasting models (Al Mesfer, 2023). These models employ sophisticated algorithms to
analyse various pertinent factors, including historical sales data, seasonal trends, and other
variables that directly impact consumer demand. By leveraging these analytical tools,
Walmart can make informed decisions regarding inventory levels, ensuring that they are
adequately stocked to meet customer demand while minimising the risk of overstocking or
understocking (Tabesh, Mousavidin & Hasani, 2019). This data-driven approach to inventory
management allows Walmart to maintain a competitive edge in the retail industry by
optimising operational efficiency and maximising profitability (Sugijarto, Safie, Mukhtar &
Sulaiman, 2018). Predictive models play a crucial role in optimising inventory management
by accurately determining the appropriate assortment of products to be stocked in optimal
quantities and at strategically advantageous locations. This enables the mitigation of
stockouts, where inventory falls short of demand, and the reduction of excess inventory,
where inventory surpasses demand.

In addition, it is worth noting that Walmart's supply chain operations derive substantial
advantages from data analytics. This is achieved by facilitating real-time tracking, monitoring,
and optimising various logistics processes (Sugijarto, Safie, Mukhtar & Sulaiman, 2018).
Data analytics tools play a pivotal role in enhancing the effectiveness of supplier
management, optimising routes, and replenishing inventory, thereby making significant
contributions to the efficiency and flexibility of the supply chain.

RECOMMENDATIONS
In its relentless endeavour to enhance its data-driven strategies, Walmart has the potential to
reap substantial advantages by further exploring and embracing advanced technological
avenues (Ngomane, 2023). One potential avenue for Walmart to explore involves using
sophisticated machine-learning algorithms. By incorporating these advanced algorithms into
their operations, Walmart can enhance and optimise their predictive models, resulting in more
accurate and precise demand forecasting capabilities. By harnessing the advanced capabilities
of machine learning, Walmart can conduct a more thorough analysis of intricate datasets,
encompassing a wide range of factors such as historical sales data, prevailing market trends,
and seasonal fluctuations. By conducting a detailed and meticulous analysis, the retail giant

3
will obtain more precise and reliable predictions regarding consumer demand. This enhanced
accuracy level will enable the company to optimise its inventory levels and product
assortment more efficiently and effectively.

Moreover, it is worth noting that Walmart has the potential to leverage data obtained from
emerging sources, including but not limited to social media platforms and Internet of Things
(IoT) devices (Azira Ibrahim, Ibrahim Mohamed & Nurhizam Safie Mohd Satar, 2021). By
doing so, the company can acquire a more profound understanding of the ever-changing
customer preferences and the dynamic trends within the market. Social media platforms are
abundant repositories of consumer sentiments and preferences, providing invaluable data
about dynamic trends and consumer behaviour. The integration of IoT devices, such as
intelligent sensors and beacons, has the potential to offer valuable insights into customer
behaviour within retail establishments. By harnessing these technologies, retailers can access
real-time data on customer movements, enabling them to understand foot traffic patterns and
product interactions better. By conducting a comprehensive analysis of this heterogeneous
dataset, Walmart can effectively customise its product offerings to better align with
consumers' ever-changing demands and preferences (Hashim, Mukhtar & Safie, 2019). This
strategic approach not only contributes to heightened levels of customer satisfaction but also
catalyses increased sales performance.

Furthermore, the examination and investigation of the integration of blockchain technology

offers Walmart a valuable prospect to augment the level of transparency and traceability
within its vast and intricate network of supply chains. By harnessing the decentralised and
immutable ledger system of blockchain technology, Walmart can establish comprehensive
and transparent documentation of the entire lifecycle of each product, commencing from its
initial sourcing phase to its final delivery stage. This technological innovation enhances
accountability and fosters trust throughout the supply chain by furnishing stakeholders with
robust and verifiable documentation of product provenance (Parry, Revolidis & Ellul, 2023).
Ensuring the integrity and genuineness of products enables expedited and streamlined recall
processes, thereby enhancing efficiency. By employing blockchain as a proactive measure,
Walmart seeks to reduce instances of fraud and elevate the overall integrity of its supply
chain operations. This research underscores how the implementation of blockchain
technology allows Walmart to optimize its supply chain processes, facilitating the seamless
flow of goods and services and, consequently, enhancing the organization's capacity to meet
consumer demands with greater efficiency and effectiveness.

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In essence, the aforementioned potential advancements, which encompass using sophisticated
machine learning algorithms, exploring developing data sources such as social media and IoT
devices, and integrating blockchain technology, can substantially enhance Walmart's data-
driven strategies (Sadiq, Safie, Abd Rahman & Goudarzi, 2021). By embracing and
integrating these technological innovations into its operations, Walmart has the potential to
improve its predictive capabilities significantly, gain more comprehensive and nuanced
customer insights, and strengthen the efficiency of its supply chain. This, in turn, can
contribute to the improvement of Walmart's competitive advantage within the constantly
evolving retail industry.
CONCLUSION
Walmart's integration of data analytics and business intelligence has brought about a
significant transformation in its retail operations (Chan, 2020). This strategic implementation
has enabled the company to extract valuable insights about customer behaviour, thereby
facilitating the optimisation of inventory management and the streamlining of supply chain
operations. The strategic utilisation of data-driven decision-making has effectively positioned
Walmart as a prominent leader in the fiercely competitive retail industry. In the rapidly
changing digital era, Walmart must engage in innovative, consistent practices and adapt its
data analytics strategies to maintain its competitive advantage and effectively cater to
contemporary consumers' ever-evolving needs and preferences.

5
 REFERENCES
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Consumer Goods Industry (Doctoral dissertation, Massachusetts Institute of Technology).
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