My summary of a recent interview with historian Nelson Lichtenstein on Wal-Mart:
1) Wal-Mart’s first innovation was data mining, which it did using bar codes.
2) Wal-Mart’s most profitable innovation has been in social engineering – exploiting labor laws and incentives for managers, etc.
Elsewhere, Paul Krugman, in a terrific conversation with Charlie Stross, suggests how the information technology advances of the 1970s were first expressed as economic growth:
[T]he first place where people really figured out what do with IT in a way that was productive… was Wal-Mart. It turns out that all this unglamorous stuff like inventory management, basically knowing what exactly is left on the shelves the moment it is checked out of the counter, being able to plan your whole system for something big box stores brought in, and actually you can see that’s where the GDP growth…
Update: SH notes that Wal-Mart was also able to disintermediate by becoming their own distributors.