How to Accelerate ROI from a Walmart Luminate Investment
EVERT WEEK, Walmart suppliers receive a comprehensive view into how their products are performing among the chain’s 140 million households. The data is from Walmart Luminate, the latest, defining suite of customer insights from the world’s largest retailer.
However, for many CPGs working with Walmart, the question is: What to do with the data? It’s a question that if answered the right way — through AI and predictive modeling — can lead to transformative insights that remarkably lift a CPG company’s business.
As someone who spent nearly 20 years at Walmart and saw test versions of the insights program, brands using Walmart Luminate have access to a level of customer insights that can impact their business beyond the four walls of Walmart. The customer insights — a view into millions of households weekly, including pickup and delivery orders — are unprecedented.
But when optimized by AI and predictive analytics, the insights can transform a brand’s sales and loyalty measures in dynamic ways.
Why Walmart Luminate Is Different
Walmart Luminate is being positioned as the leading retailer’s primary data-rich platform. The chain announced early in November that it’s not quite ending its previous platform Retail Link, but it is removing access to the “Decision Support System” within Retail Link on March 24, 2024. This means historical reporting and future reporting will no longer be available to Retail Link users.
Instead, migrating to Walmart Luminate, CPG suppliers will grow their businesses and the categories overall by working from a singular, common language as it pertains to data and insights. Each category manager at the retailer can use the data when working with their vendors. Vice versa, CPGs can communicate with Walmart category managers through the unified data source to develop strategic business decisions together.
AI-powered platforms can ingest Walmart Luminate data along with third-party insights, macroeconomic data, and other types of supporting data to zero in and optimize assortments, study space planning, test promotions and learn about competing products.
Walmart Luminate can do this with AI because it provides brands customer segmentation data and lifestyle segmentation insights from its 140 million households.The anonymized data provides a view into socioeconomic data, ethnicities, brand loyalty, and pickup and delivery trends down to the store level. CPGs are receiving customer insights like they have never seen before, and with the help of AI, they are faced with a mountain of opportunities to build brand and category growth.
3 Ways To Leverage Walmart Luminate
With predictive analytics and Walmart Luminate, CPG category managers and data analysts can test endless scenarios to get a granular SKU- and store-level view of how the brand is performing. Companies can look into delivery trends, identify new product introductions or uncover brand-switching behavior due to out-of-stock products — an issue that costs CPGs more than $47 billion annually.
The weekly customer insights that brands glean from Walmart Luminate are so rich that they can be combined with AI modeling to capture a targeted look at shoppers and how they’re buying products.
Let’s look at three examples of how a household paper products company can leverage Walmart Luminate and predictive analytics.
- Demand Transference Trends: Say the brand is noticing in Walmart Luminate reports that sales of its paper towels are slipping. With AI and Walmart Luminate data points, the brand can identify where brand leakage is occurring. The data can be ingested into AI modeling to run various scenarios around assortment optimization and elasticity, for example, to generate recommendations on the best way to increase sales of the paper towels over time.
- Online Ordering Activity: With Walmart Luminate’s weekly data and AI-powered insights, the household paper brand can access a direct view of online transactions and determine if there are products and packaging sizes that are more favorable for pickup or delivery orders. Perhaps the brand sees that 48-count toilet paper packages are increasing in delivery with one set of households. With AI, the company can identify buying trends around that package size by time and day of the week, and double down on digital marketing strategies to increase sales of the SKU for online orders.
- Promotional Tests: Walmart Luminate’s data can help the CPG see where a line of its compostable paper plates is underperforming among specific household demographics or across regions. Inputting that sales and loyalty information into an AI model enables product teams to evaluate numerous promotion options and determine which item would generate the most trial and sales opportunities.
AI Can Enhance Walmart Luminate
Walmart’s customer insights program is a first-of-its-kind suite of insights that brands can get more out of with AI. The retailer is positioning the data to be its central way of reporting insights.
CPGs are just beginning to leverage Walmart Luminate, as well as AI, but as they get more comfortable with both platforms, they will unlock new ways to increase profitability. CPGs may have questions on how to use the Walmart Luminate data, but with a little guidance from AI, brands will revolutionize how they develop products, build brands and target shoppers.
Kristine Joji is EVP, strategy consulting at Insite AI (www.insite.ai). She is the former VP of merchandising at Walmart, leading strategic initiatives that resulted in substantial revenue growth for the retailer across grocery and personal care.
