Thursday, September 22, 2011

Wal-Mart's Implementation of New Data Mining Technology, Hadoop, on E-Commerce

Officially released ten days ago, a free computer software program called Hadoop has been highlighted by an article online by Bloomberg Businessweek. It has already been utilized by many large companies like Wal-Mart, Bank of America, Orbitz, AOL, Walt Disney, IBM, Nokia, and Yahoo to collect vast amounts of data to efficiently analyze consumer trends.
One of the most evident examples of the application of Hadoop is depicted through Wal-Mart’s use of this computer software. Wal-Mart has always been a dominate physical presence to consumers with stores seemingly everywhere across the United States. However, this commerce giant is currently in an uphill battle with Amazon in the realms of e-commerce, or the buying and selling of goods online. Anand Rajaraman, senior vice-president of global e-commerce at Wal-Mart explains how the consumers are now getting past e-commerce and into “social commerce” through Facebook and Twitter. To adequately assess these sites Wal-Mart is turning to Hadoop to gather data on statuses, posts, and searches to successfully place the right products with the right consumers. With Wal-Mart predicting this e-commerce market morphing into a “social commerce” market, the company can get a leg up on Amazon by collecting this data for consumer analysis. For example, Hadoop helps Wal-Mart convert and organize words in statuses like “back-yard chair” and relate them with a section of Wal-Mart products like “patio furniture”.
With the influx of data that the internet provides, it is essential that companies like Wal-Mart collect and analyze as much data as they can from the extremely lucrative social media sites like Facebook and Twitter. Wal-Mart’s usage of Hadoop also reflects a great model of business planning. It all started with a problem. Wal-Mart was failing in the realms of e-commerce and they foresaw this market expanding into the social media sites like Facebook and Twitter. With this problem they developed a solution: connect searches, statuses, and tweets by using a language identifier to link words to a selection of products it provided. To act on the solution, Wal-Mart utilized an IT program, Hadoop, to generate data to convert to analysis to better sell their products and increase their presence on the e-commerce market.
However this article is interesting in the fact that it begins to form the question of, when does specialized advertising become too much? If companies like Wal-Mart are using information from numerous statues to develop software to pinpoint words with products, when does the user (or consumer in the eyes of companies) of a site like Twitter become fed up with every tweet they make then becoming linked to a product? Take into consideration Rajaraman’s example (that software aided by data from Hadoop could connect “backyard chair” to Wal-Mart’s line of patio furniture) for a moment. Imagine Tweeting, “just fell off my backyard chair while tanning #embarrassing #thankgodforfences”. Ideally Wal-Mart would want to then connect that tweet with patio furniture it is trying to sell. This could create social media consumer hatred and eventually turn Wal-Mart’s anticipated success into failure.
Despite a potential e-commerce “bubble” far in the distance, Wal-Mart’s business moves provide a good example of solving a problem using an IT application.

King, Rachael. "CEO Guide to Hadoop." Bloomberg Businessweek. 07 Sept. 2011. Web

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