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I was alerted to two stories regarding grocery stores, data mining, and apps from Franz Dill at The Eponymous Pickle. First, Kroger acquired "customer science" company dunnhumbyUSA last week with the goal of boosting their "Customer 1st" strategy:
Continuing dunnhumbyUSA's work, [new subsidiary] 84.51° mines mountains of customer transactions via Kroger's loyalty card program to figure out what shoppers want.
84.51° helps Kroger to thoughtfully evaluate what products to stock, expand or discontinue. The firm's insights are also used to send coupons relevant to shoppers' habits, such as issuing pet food offers to customers who actually buy pet food.
Aitken says noted 95 percent of Kroger's growth in the last decade has come from winning more business from existing customers – which is a smarter, most cost-effective way to do business. He notes too many industries – from mobile carriers to cable TV providers – chase after new customers with one-time incentives that ultimately encourage switching, not customer loyalty.
Also, Winn-Dixie is releasing a mobile app that features:
..."personalized" digital coupons, all stored on your smartphone or other electronic device. Winn-Dixie, a subsidiary of Bi-Lo Holdings, partnered with Coupons.com for this new savings system, which sends you cyber coupons based on your own shopping preferences.
The Winn-Dixie app also features a virtual shopping list and fuelperks rewards.
(Score: 3, Interesting) by PizzaRollPlinkett on Monday May 04 2015, @11:11AM
Don't stores already know "what products to stock, expand or discontinue" from their inventory? They know what sells and what doesn't. Do they need to spend money on a third-party consultant to tell them this stuff?
I've got a little theory I'm working on. How do you know if something is stupid? Look at Wal-Mart and see if they are doing it. If Wal-Mart is not wasting their time and money on "virtual shopping lists", loyalty cards, dumb consultants, and so on, then it's stupid. If you are a store trying to compete with Wal-Mart, and you do stupid stuff, you're going to be roadkill. Wal-Mart doesn't need all this dumb stuff to get people to come to their stores. I just went to a new grocery store, where paper towels cost over $1 more than at Wal-Mart. Hint to new store: Dump the consultants and other stuff, and match Wal-Mart's prices.
Hey, I just got a virtual coupon for pizza rolls in my inbox!
(E-mail me if you want a pizza roll!)
(Score: 3, Interesting) by VLM on Monday May 04 2015, @11:34AM
Walmart is the cheapest source of minimal quality stuff out there. They don't need any gimmick beyond that. Something more advanced could help any store operating about the most minimal quality threshold. Another way to put it, is the primary use for loyalty cards is to create a customer list, and if you're walmart sized you just assume a census extract equivalent will do, and the 2% or whatever of the general population who refuse to shop at walmart can just get spammed anyway, so just spam the entire phone book.
The way to match walmarts prices is to make the rolls 10% narrower and 50% shorter and then cut prices 5% so the dumb poor people think they're saving money. Walmart doesn't "save" money any other way for something like a decade now. And for the non-consumables drop the product lifetime by value engineering to maybe a tenth the original and drop the price 50% and the fools will have to buy ten of them to match the lifespan of a real product yielding five times the revenue. I'm not rich enough to shop at walmart.
From memory of my food store retail days a long time ago, 25 years ago we had 286 class PCs hooked up to the registers to document every sale. I don't think technology has declined much since then. An infinity of data was cheaply easily available.
Coupons suck. They're a hangover from WWII rationing books and hold little appeal beyond the obvious financial to any younger group. Hopefully that whole aspect of the market will go away and lower prices a little as the population ages that generation out. Its all a bunch of meaningless expensive paper shuffling.
What isn't understood in the summary, is you make a list of consumer sellers and organize it by non-commission and commission and the churn mostly happens with the commissioned sales people because of new customer bonus payments. Follow the money.
(Score: 2) by bziman on Monday May 04 2015, @01:14PM
That's funny, since I can get the same exact brands at WalMart that I do at Kroger... they are just less expensive. And the produce at WalMart is actually surprisingly high quality, though not up to the local farm stands. Kroger does make me crazy though, by having commercials announced over the PA system every five minutes, and by printing out a meter of coupons at check out that I refuse to leave the store with.
(Score: 0) by Anonymous Coward on Monday May 04 2015, @01:38PM
> Kroger does make me crazy though
The Albertsons nearest me just closed. I hated going in there because every checkout line had a TV blasting commercials at you as you waited. Good fucking riddance.
Sprouts opened up one block away and that place is sooo much nicer. No loyalty cards either.
(Score: 2) by bziman on Tuesday May 05 2015, @03:04AM
Yeah Sprouts is great, but they just don't have the selection of the larger stores and can't compete with Trader Joe's on price. They are, however, much better than Whole Foods.
(Score: 2) by el_oscuro on Monday May 04 2015, @09:58PM
The funny thing is, Trader Joe's has a similar method of operation. They have no coupons, no loyalty cards, no advertising, nor any other similar bullshit. The weird thing is, they are usually cheaper than competing grocery store chains, at least in the DC area.
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(Score: 0) by Anonymous Coward on Monday May 04 2015, @11:39PM
The top and the bottom of the market are free of them.
I suspect it is for the same reason, but viewed through two different lenses.
ALDI and Save-A-Lot dont not have loyalty cards because the poor, especially illegal immigrants, are distrustful of tracking.
Wholefoods and Sprouts don't have loyalty cards because it is gauche. I'd put TJs in this category.
(Score: 0) by Anonymous Coward on Monday May 04 2015, @01:24PM
> Wal-Mart doesn't need all this dumb stuff to get people to come to their stores.
Maybe they do. [thekrazycouponlady.com]
(Score: 2) by vux984 on Monday May 04 2015, @04:42PM
Look at Wal-Mart and see if they are doing it
That's great if you want to compete with walmart on walmart's terms.
However you can't just be exactly like walmart but more expensive, because that's not going to get customers.
And odds are you can't win the "be slightly cheaper than walmart" unless you are ALREADY at least the size of walmart.
So that leaves finding a business model that isn't based on "see if walmart is doing it".
Although I do agree with you that most gimmicks are stupid.