Data sharing agreement is a big deal

Less than six months into her role as Walmart’s EVP global customer insights, Cindy Davis rocked the retail analytics world this week with news that Walmart would resume sharing sales data with Nielsen.

The development comes as Walmart is looking to do a better job of leveraging shopper insights as a means to grow sales and follows the creation in February of a new global customer insights team led by Davis. She previously served as EVP membership and marketing at Sam’s Club and joined the company in the fall of 2007.

“This expanded relationship with Nielsen will provide Walmart and Sam’s Club with deeper insights into customer purchasing, and unmet needs, both nationally and in key local markets,” Davis said. “We plan to share our point-of-sale information to help us identify category growth opportunities sooner and collaborate with our manufacturer partners to develop more impactful customer-driven programs going forward.”

According to Nielsen, over the next several months it will incorporate Walmart and Sam’s Club retail sales information into its databases and define new views of U.S. industry numbers.

Those new views should produce some eye-opening revelations around shopping behavior by affording Walmart and its suppliers a more detailed view of true consumer behavior. Previously, Walmart was reliant on gleaning insights from its own point-of-sale data and blending that information with other data from such providers as Nielsen and Symphony IRI, which maintain household panels. The panel information, while useful, could never offer the same level of granularity and precision as actual point-of-sale information.

Ironically, it was issues of granularity that prompted Walmart to withdraw from information sharing agreements with Nielsen and other data aggregators more than a decade ago. At the time, there were concerns that Walmart’s sales had come to represent a disproportionate share of the mass market, which enabled competitors who subscribed to the data services to gain too much insight into Walmart’s performance. Those concerns may still linger, but what’s changed is the company’s desire to stem further deterioration in U.S. sales and increasingly more extensive shoppers insights, such as those provided by Nielsen, are seen as a way to accomplish that goal. To aid in the process, Nielsen will send a team of approximately 30 people to work with Walmart.

“We believe that Walmart’s participation in the information sharing model reinforces the importance of business information and analytics in today’s retail climate,” said John Lewis, president and CEO North America Consumer, Nielsen. “Nielsen is confident that both retailers and consumer goods manufacturers will benefit significantly from greater accuracy of information on what consumers buy.”

The majority of U.S. food, drug, mass, convenience and dollar store retailers already provide Nielsen with sales information, so Walmart’s participation simply adds to the existing market information, enabling Nielsen to provide a better, more precise view of consumer purchase activity. Nielsen said it will be working with Walmart and Sam’s Club to report their sales information and incorporate it into existing reads of the marketplace. This new base of information will have better and more accurate coverage for all participating retailers and manufacturers, providing improved insights into sales volumes, pricing, merchandising and promotions, according to the company.