Wal-Mart Puts Its Faith in Big Data for Mobile Strategy
Wal-Mart wants to tell you what to buy on your mobile device and it's using its massive collection of data to make it a reality.
"Our mobile strategy is as simple as it is audacious. We want to make mobile tools that become indispensable for our customers while shopping in our stores and online," said Gibu Thomas, global head of Wal-Mart's mobile division, on Wednesday at the CTIA Wireless conference in Las Vegas.
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"Our goal is to create shopping tools that become second nature to the customer, providing assistance with every part of the retail experience from pre-store planning to in-store shopping and decision making to checking out."
Big data is key to power these tools.
With mobile-influenced offline sales expected to reach $700 billion by 2016—according to Deloitte—it's not surprising that Wal-Mart, the largest retailer in the world, is doing everything it can to get its mobile strategy in order, including harnessing the power of big data to drive tools and services.
One big-data feature Wal-Mart is working on to include in its app is an improved shopping list function.
"By leveraging big data, we are also developing predictive capabilities to automatically generate a shopping list for our customers based on what they and others purchase each week," he said.
Another way the company is working to harness big data is by applying it to when the customer is actually in the store.
Wal-Mart's app already has a geofencing feature that senses when a user is in a Wal-Mart store in the U.S. and prompts the user to switch to "Store Mode," which is a setting that allows users to scan QE codes for prices and discounts.
But Thomas said the company is working to take this even further and use big data to provide shoppers with useful information on demand.
For example, if an app user was in the toy aisle searching for a toy under $30, the user could use a voice feature to tell the app its request, prompting the app to generate a list of the best-selling toys in that particular store that meet the requested budget requirements.
"We've only began to scratch the surface of what's possible here," Thomas said.
With more than 50 percent of its customer base equipped with smartphones, Wal-Mart has already seen significant growth in the number of its customers using the Wal-Mart app on their device while shopping in the store, Thomas said.
"This new breed of mobile-empowered customers is good news for us," Thomas said. "Compared to nonapp users, customers with a Wal-Mart app make two more shopping trips a month to our stores and spend nearly 40 percent more each month."
Wal-Mart's highly engaged app customers make almost four more trips a month than a nonapp user and spend 77 percent more every month, he added.
Part of what is driving Wal-Mart's mobile growth is just the fact that smartphone adoption continues to increase in general.
In fact, on Monday an NPD Group report predicted that shipments of smartphones will outnumber shipments of feature phones this year for the first time ever, a trend that bodes well for Wal-Mart.
"It's fascinating to think that in less than 10 years, smartphones have gone from being the next big thing to mature and mainstream," Thomas said. "As transformative as it was for the early adopters, it is far more transformative as it's adopted by the masses. And it has incredible transformative potential for retail, shopping in the store."
But Wal-Mart isn't just sitting back and waiting for its customers to adopt mobile technology, the company has made calculated moves to ensure that its customer base with smartphone access expands.
The company paired up with Straight Talk Wireless in January to offer its customers a $45 pre-paid wireless plan for smartphones. To reel customers in even more, the company offered those who purchased their phone in the store a no interest fixed-monthly payments special financing offer for $25 a month via a Wal-Mart credit card.
While Thomas said it's all about democratizing access to the technology, it also plays an integral part in getting the customers locked into Wal-Mart's ecosystem with their shopping app.
In fact, mobile accounts for one-third of Wal-Mart's website traffic, Thomas said. And during the holidays, mobile drove as much as 40 percent of the site's traffic, he added.
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"Our customers aren't just buying these devices, they are using it to shop with us," Thomas said. "In other words, more of our customers are embracing mobile technology to shop on their terms anytime, anywhere and are some of the most loyal and valued customers."
_By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson.