Two Sides of the Same Coin: Walmart’s Shopper Behavior Insights and Ecommerce Financial Data

Key takeaways for ecommerce brands:

1. Data-driven decision-making is no longer just for large retailers – with tools becoming more accessible and affordable, SMBs can now leverage the same quality of insights to compete effectively in the digital marketplace.

2. While bookkeeping focuses on financial transactions (recording, tracking, and managing data), ecommerce accounting is the practice of reporting and analyzing financial data to make profitable business decisions.

3. Modern ecommerce accounting solutions go far beyond traditional financial tracking, offering critical insights for inventory management, pricing optimization, and demand forecasting - three areas that directly impact profitability and growth.

Walmart's second Inspire event, held recently in Rogers, Arkansas, highlighted its flagship suite of data insights tools, Walmart Luminate. Under the theme "Granular Data, Greater Insights," the event focused on how DTC brands can leverage Luminate's rich, first-party data on shopper behavior to increase sales, especially as inflation weighs on consumers.

“It’s a tough world for all of us,” said Mark Hardy, SVP and Head of Walmart Data Ventures. “Being able to understand your customers and what they need helps you meet expectations better. So how do you refine it? How do you get more granular? How do you become more targeted to make sure you are helping your customers?”

The answer to all these questions, per Hardy, is more information. At the Inspire event, Walmart Data Ventures introduced new ways to deliver actionable, customer-centric insights that can help brands make more informed business decisions, including: 

• Walmart Luminate Insights Activation module: a recommendation engine that allows brands to use Walmart Luminate insights to optimize their display advertising campaigns via the Walmart Connect retail media offering.

• Walmart Luminate Digital Landscapes: a new offering that gives brands pre-purchase behavioral data, such as where, when, and how customers find their products and shop for them. 

Democratizing Data: Leveling the Playing Field for SMBs

According to Walmart, the demand for these insights has never been higher, particularly among small and medium-sized businesses. The retail giant shared that Luminate’s client base has grown by 173% since 2023, with representation from SMBs increasing more than 100% year-to-date. Currently, more than 50% of Luminate's clients are smaller businesses, and every brand that was up for renewal this year has signed on for a minimum of three years. 

“What we’ve seen over the last year is a lot of small and mid-sized companies coming in, because they’ve realized it’s the same information for every company,” explained Hardy. “Walmart Luminate evens the playing field, so now even small or mid-sized companies can have the same conversation to help drive their business.”

This conversation revolves around being proactive. “Up to now, all the data we have gave you a gauge of ‘how did I do?’” added Hardy. “I could look at my sales, I could look at my customer, but (only) after I’ve taken action. Where we want to go is being able to connect the dots for all that data so that it provides recommendations of ‘what should I do?’”

Understanding the Building Blocks of Financial Data

Another area where ecommerce SMBs would be well advised to connect the dots in the data is financial management. Here, too, DTC operators have a unique opportunity to leverage rich data to improve their bottom line. But to do that, they must first understand the difference between ecommerce accounting and bookkeeping. 

While often used interchangeably, ecommerce accounting and bookkeeping are not the same thing. Bookkeeping focuses on financial transactions: recording, tracking, and managing data. Accounting is the practice of reporting and analyzing financial data to make profitable business decisions. In other words, if bookkeeping is the “how,” accounting is the “what” of ecommerce financial management.

This distinction matters because how you keep your books – timeliness, categorization, and reconciliation – determines what those books can tell you. Accounting only becomes a profit-generating mechanism when the data is combined in the right way, which starts with choosing the right accounting method.

There are two primary methods of accounting:

• Cash-basis Accounting
  
  As the name implies, cash-basis accounting records transactions when money changes hands, providing a clear picture of how much cash your business has at any given time. Despite its simplicity, cash-basis accounting fails to give an accurate financial representation of inventory-centered businesses like ecommerce brands. 

• Accrual accounting

In accrual accounting, transactions are recorded on the date they’re incurred – regardless of when money is exchanged. Another way of putting it would be that accrual accounting reflects a value exchange – for example, inventory for cash – in monetary terms as though it occurred on a single date. 

This is simple in principle but complex in practice, as value is much harder to track than cash, which is transferred to or deducted from your bank account. Plus, there’s the unique complexity of costs ecommerce brands incur through the online exchange of a business’ value (product) for a customer’s value (cash): discounts, payment processing fees, refunds or chargebacks, as well as shipping and fulfillment.

Fortunately, this complexity can be handled with ecommerce accounting software.‍

Turning Financial Insights into Action

Once you’ve settled on an accounting method, ecommerce accounting software can analyze your financial data and address major pain points. According to a recent study by Consumer Goods Technology (CGT), the top areas of analytics focus for retailers are: 

1. Online store inventory management

Many businesses, particularly multichannel brands, struggle with tracking inventory levels, exact costs (per SKU, per warehouse, etc.), and turnover rates. An ecommerce-specific accounting service provides full visibility across multiple sales channels, eliminates costly errors such as overstocking, understocking, and misallocating resources, and optimizes your online store inventory management.

2. Pricing

‍The key to building a profitable pricing strategy is understanding the true cost of sales. This means taking into account all your expenses – i.e., COGS, shipping & fulfillment, merchant fees, and variable marketing costs such as affiliate fees, paid online ads, etc. – on a per-unit (SKU) basis, which requires an ecommerce-focused solution.  

3. Demand forecasting

Demand forecasting involves analyzing historical and real-time financial data such as past sales, seasonality, pricing, and promotions to predict future product demands. Having 100% accurate and up-to-date books at all times – something only an ecommerce-dedicated bookkeeping and accounting system can deliver – is a precondition for this type of analysis. 

In the small-margin reality of DTC ecommerce brands, insights on demand forecasting, pricing, and inventory management can make or break a business. This requires a specialized accounting service that – much like Walmart's Luminate does with information about shopper behavior – can transform raw financial data into clear, actionable, and profitable action items.