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Business intelligence, SOA, and your grocery shop

This is a re-post of my private blog published today. I’m sure it may be interesting for the SAP community as well.

In a very competitive market, such as the retail grocery industry, the battle for every customer  became reality many years ago. All top management teams have  been racking their brains to attract new and retain existing customers creating different programs, building new partnerships, enriching their networks by new services, and constantly re-decorating the stores. Apparently all this costs a lot. Some of the industry’s players reached tremendous success, like Kroger, and others barely are in coma waiting to be acquired (Jim Collins in his “Good To Great” tells very exciting and instructive stories about it).

In the Atlanta area the battle for the customers on the grocery field occurs between Kroger and Publix. I found 3 the former and 4 the latter stores in a radius of 3 miles from my house. So how do they attract us and how do we choose between them? I think it’s just a matter of taste. The prices, the assortments, the locations are very very similar. If I were an ideas generator in those companies my creativity would have run out new ideas very fast. But before it does I still have one idea on how to make one “Purple cow” out of this white herd.

I have a customer card in Publix and Kroger and every time I pay for my cart I give such a card to a cashier. Conclusion? – I’m identified as a customer. They know everything about all my purchases. I’m sure it helps them to make complex analysis and tune their supplies and planning towards the customer needs (of course not my personal but an average customer out of our aggregated statistics). What I don’t know is why this information is concealed from me? And this time not the aggregated but my personal information. Wouldn’t it be a great idea to provide me detail statistics on what I’ve bought, how much I’ve spent on certain categories, what was my price deviation during a certain period, how I could plan my food budget, and so on, and so forth. If one of the networks provides such a service then I’m, as a customer, bought by them.

For me this service would be a meaningful differentiator. Our family account’s transactions coming from grocery shops sum up to $1K-$1,3K per month. Then it’s a black box. I can only guess how this money is split between different goods and hence I’m blindly clueless on an idea what we spend or where we can save.

Now technically speaking providing such a service is not an expensive and a complex task. They already possess all the info and for the beginning stage the service may be ‘read-only’ – very like the Internet access to a bank account. But if to develop this idea further and make the service really interactive with the customer it can bring new opportunities as for the stores as well as for the customer. We can plan my spending together more effectively, the store can offer me more attractive deals (on a personal basis) since they possess the knowledge about millions of customers and can extract concrete patterns. They can build new partnerships and offer new services for me providing access to my statistics. Here a SOA-driven architecture can  prove its value. One wild example would be to allow me to order goods via the Internet and provide this info to a delivery service. I’m sure dozens of new services can be founded on the basis of a closer store-customer interactions and both  parts – the stores and the customers – will win.

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  • Go check your mailbox, it is full of flyers,advertisments and direct mail coupons that are a result of your individual buying patterns as a result of using these affinity cards ( which in addition to providing you with a “discount”, also target you individually…you have  sold your privacy at this point )..your buying behavior down to the product is targeted and analyzed, and then sold to marketing firms which fill your needs and mailbox…your input has already taken place..
  • Apparetnly if you mail is full of garbage (like mine) it’s already too late:-) But the problem in this case is to have ANY card or to provide your info to anyone. First of all, it’s literally imposible to isolate your address from outsiders (not all of the garbage originated by the grocery shops and a big portion of it is unnamed). You have provided your info to many institutions and you may suspect all of them in saling this info. Second of all, I didn’t suggest to give MORE information and to share it with others. I just said to share this info with ME, the buyer, to attract me spending in this network.