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Doctor's Orders Brewing
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Kick back, open a beer and watch the hurricane.

Doc

Wal-Mart's hoard of data staggering

By CONSTANCE L. HAYS
New York Times

Hurricane Frances was on its way, threatening a direct hit on Florida. Far away, in Bentonville, Ark., executives at Wal-Mart Stores decided the situation offered a chance to use one of their newest data-driven weapons, predictive technology.

A week ahead of landfall, Linda Dillman, Wal-Mart's chief information officer, pressed her staff to come up with forecasts based on what had happened when Hurricane Charley struck weeks earlier.

The experts mined the data and found that the stores would indeed need certain products and not just 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," Dillman said. "And the pre-hurricane top-selling item was beer."

Such knowledge, Wal-Mart has learned, is not only power, it is profit. Plenty of retailers collect data about stores and shoppers, and many use the information to try to improve sales.

But Wal-Mart amasses more data about the products it sells and its shoppers' buying habits than anyone else, so much so that some privacy advocates worry about potential abuse.

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 Social Security and driver's license numbers to geographic proclivities for Mallomars. The data are gathered at the checkout aisle, then recorded, mapped and updated by store, by state and by region.

By its own count, Wal-Mart has 460 terabytes of data stored on mainframes. The Internet has less than half as much data, according to experts.

Information about products, and often about customers, is most often obtained at checkout scanners. Wireless handheld units, operated by clerks and managers, gather more inventory data.

Wal-Mart shares some information with its suppliers. A company like Kraft, for example, can tap into a private extranet, called Retail Link, to see how its products are selling. But for the most part, Wal-Mart hoards its data obsessively.

Still, as Wal-Mart recently discovered, there can be such a thing as too much information. Six women brought a sex-discrimination lawsuit in 2001 that was broadened this year to a class of about 1.6 million current and former female employees. Lawyers for the women have said that Wal-Mart has the ability to use its human resources database to calculate back pay for the plaintiffs as well as to determine if women were fairly promoted and paid.

If that comes to pass, it will be a rare moment indeed, with Wal-Mart's carefully assembled data being channeled for a purpose Wal-Mart did not desire.
 

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