Walmart’s data collection comes to light: the company has info on an estimated 145 million Americans

According to a Huffington Post story yesterday, a new report is out just in time for Cyber Monday, examining the ways that Walmart and other retailers track consumers online. Released by the Center for Media Justice, ColorOfChange, and SumOfUs, the report is the first independent analysis of Walmart’s efforts to gather and track consumer information online and use that information to shape marketing strategies.

While desperately playing catch up to Amazon in online sales, Walmart executives have been bragging to investors about the company’s ability to compile data about consumers. In September, Walmart U.S. CEO (for now) Bill Simon said of the information from the Sam’s Club membership program (emphasis our own):

If you take that data and you correlate it with traceable tender that exists in Wal-Mart Stores and then the identified data that comes through Walmart.com and then the trend data that comes through the rest of the business and working with our suppliers, our ability to pull data together is unmatched.

The report, “Consumers, Big Data, and Online Tracking in the Retail Industry,” finds that Walmart invades the online privacy of its consumers easily, secretly, and without accountability. In fact, Walmart could have the personal data of more than 145 million Americans, and the report’s technical analysis found that Walmart shares that data with more than 50 third party companies, a fact that is largely obscured by the company’s 4,500-word privacy policy.

A spokesperson for Walmart defended its practices and essentially confirmed the report’s findings at the same time, telling the Huffington Post that Walmart “mostly uses customer data and passes it along to third-party sites in aggregate rather than individually.” That comment does nothing to assuage concerns about profiling and discrimination raised in the report.

Not only are consumers likely unaware of the extent to which information about them is being compiled by Walmart and other retailers, but the report identifies at least one possible harmful side effect of this collection:

Essentially, as companies like Walmart increasingly use data, both real and predicted, to put people into categories, the risk grows that some groups will fall disproportionately into categories which receive less favorable treatment.

This scenario has already begun playing out. Last year, the Wall Street Journal examined web pricing at different retailers and found that a particular stapler was being sold at different prices to online shoppers, seemingly depending on their physical proximity to Staples’ competitors. However, those locations that saw lower prices online were generally higher income areas than the ones that saw higher prices. This system of targeting consumers based on data collected about them is far from transparent and its effects can be counter to the level playing field we’ve come to expect from the Internet.

To that end, the report’s authors call on Walmart and other retailers to offer transparency, choices, and fairness for all consumers in the use of these technologies. Stay in touch with the Center for Media Justice, ColorOfChange, and SumOfUs as they call for change at Walmart and other retailers.

What do you think?