Walmart was a pioneer in using information technology to track and understand consumer behavior. According to Sam Hornblower of Frontline:
“In 1985, Walton and his chief lieutenant, David Glass, began developing a program called Retail Link. The software, and the hardware that went along with it, took years to perfect, eventually costing $4 billion. This revolutionary system delivered sophisticated information on consumer behavior, drawn from the data imbedded in the barcodes that passed through checkout counters.”
This software and approach to interpreting consumer behavior has been emulated, albeit less successfully, by Walmart’s rivals. It furthered Walmart’s ability to partner with, and exert unprecedented control over, its suppliers. Writes Hornblower:
“At the heart Wal-Mart’s offer to share its software program was a Faustian bargain for suppliers: Use our Retail Link program, play by our new rules and we will be your gateway to sales beyond your wildest dreams. Or refuse, and be shut out of America’s dominant retail chain. In fact, by sharing Retail Link, Wal-Mart gained command over its suppliers and effectively penetrated their executive decision-making.”