Supermarkets: High-Tech Hotbeds

Esther Schindler writes "You don't think of your supermarket as the source of geeky innovation, but you may be surprised. For example, in Steven Cherry's Supermarkets Are High-Tech Hotbeds, a Techwise Conversation with Kurt Kendall, a partner and director at Kurt Salmon, where he heads the analytics practice there, we learn: 'A lot of supermarket tech is at the checkout area. Bar-code scanning was already old hat when U.S. president George Bush the elder was allegedly amazed by them in 1992, and retailers continue to experiment with the next logical step: self-checkout systems. There's a lot of technologies out there right now that are being introduced into the retail space to understand what consumers are doing in the store, and heat-mapping is one of those technologies--using cameras in the ceiling to actually track where the consumer's going. What this information tells the retailer is where a consumer is, how they're moving around the store, whether they're dwelling in certain places, like checkout or in front of specific merchandise."

Comments

How much tech for a nickel?

[justthinkit]

How much tech can you have in an industry with profit margins of 1 or 2%?

Re:How much tech for a nickel?

[ArcherB]

How much tech can you have in an industry with profit margins of 1 or 2%?

1% of a lot of money is still a lot of money. Businesses that do more business can afford to take smaller profit margins because they deal with such larger volumes. For example, a convenience store that does $10,000 worth of business over a weekend won't make it on 1% profit. That's a mere $100. But a grocery store that does $1,000,000 over that same weekend will do just fine on the same 1% as that is $10,000 profit.

$10,000 buys a lot more technical investment than $100.

Re: How much tech for a nickel?

[peragrin]

Markets with 1% margin tend to be the most aggressive with anything that can boost that to 1.1%

Lazy companies are the ones that make steady profit. And never expect the market to change. Like the entertainment industry

Re:How much tech for a nickel?

[bill_mcgonigle]

How much tech can you have in an industry with profit margins of 1 or 2%?

The net probably varies by store, but the old song about the grocer only making a penny or two on each item is long worn-out, even counting for inflation-driven price increases. There may be certain items in each store that are loss-leaders, but when I see whole-dollar differences in prices from store to store and have a general idea on what the wholesale prices are, it's hard to feel the pathos they desire.

How supermarkets get your data – and what t

[auric_dude]

It doesn't matter if you are part of a loyalty scheme, pay by card or even cash, 'Big Brother' supermarkets know your every move http://www.guardian.co.uk/money/2013/jun/08/supermarkets-get-your-data

It's a never ending infowar

[Dr_Barnowl]

The supermarkets are one of the most active propaganda experts on the planet - the next generation of infowar is being fought there.

Forget the CIA ; their intelligence collection is old school.

The supermarkets want to skew their customers towards raising that margin of about 4% ; even a tiny skew is worth it to them.

So they profile your buying habits, they work out what you buy. They work out what everyone buys. They want to know what kind of person buys the high-end ice-cream, and other high-margin items. Quite aside from the obvious ploys, like putting coupons out for high margin items so you'll get into the habit of buying them, they'll coupon other items that aren't high margin, but they know that people who buy them are high-margin customers.

Alas, this means less shelf space for the items that low-margin customers buy, like basic staples. Who cares, you can get those things from the Mom & Pop store, right? Oh...

A whole host of infowar tricks, like reorganising the store shelves periodically to disrupt your "route" and get you in front of lines you don't usually buy.

Re:It's a never ending infowar

[rickb928]

Two weeks before Thanksgiving, you can find Durkees Fried Onion Rings on the shelf. Two days before, and all you can find is the store brand.

Is this because the brand name product is sold out, or because they understocked it, and are selling their brand at a higher profit to those who waited to the last moment to buy? After all, they wouldn't run out of that very popular ingredient on purpose, would they?

Contrast this with a competently-run convenience store, which relies on beer sales to make profits. Their goal is empty shelves Monday morning, not Sunday afternoon, selling every last drop. If they run out of Budweiser Sunday afternoon, they are losing sales because people will in fact drive to another store for their brand. A well-run store will stop listening to the Miller rep trying to convince them that people will buy Miller if Bud is out. And the Bud rep coming in on Monday will point out the Miller on the shelf and the Bud shelf empty, and tell them they lost sales. The Miller shelf would ALSO be empty if it were the right size, and they would have sold more Bud to go along with the Miller they were going to sell anyways. And yes, if there are three partial 6-packs left in a good-sized cooler, that is the equivalent of 'empty'.

But grocers know we do not so often drive to another store. And they can divert sales to store brands with different profits margins. And they don't have store brands of loyalty driven products such as beer. Don't think they can't play nice with the alcoholic beverage laws and make it happen.

They just don't see the profit opportunity yet.

Re:It's a never ending infowar

[Intrepid imaginaut]

You're referring to the till jockeys earning just north of minimum wage? That 'glassy-eyed' look is them not giving a fuck about your philosophical pontificating as they struggle on with life.

Feeling a sense of meaningless superiority is priceless.

For everything else, there's mastercard.

Re:It's a never ending infowar

[Noughmad]

Quite right, and when you use your "rewards card", you give them detailed information about your individual buying habits, which is why I delight in the expressions I get when I decline their incessant offers to give me one - "No, thank you. My privacy is worth more to me than the few bucks I would have saved." I mean, slack-jawed, glassy-eyed, totally-don't-get-what-you-mean type stares. It's... "priceless".

Would you care to elaborate on that? This is a common sentiment on Slashdot, but I still don't think it's rational. What is the benefit of knowing that some corporation with millions of customers doesn't know what products you buy? I know there's a warm fuzzy feeling of 'sticking it to the man', but are the other, more tangible benefits?

I disagree

[Waffle Iron]

Supermarkets can't seem to get the most basic data processing concepts right. If they correctly applied ACID principals to their databases, it would be impossible for an advertised special to not ring up at the discounted price, or for an item picked up from the store shelves to not scan at all. But for us, this seems to happen more often than not, and it's been going on for decades.

Lame.

High tech, you say?

[macraig]

How any of these allegedly high-tech supermarkets have backup generators to keep the food from perishing during a power outage?

Two days ago a Wal-Mart SuperCenter had an extended 16-hour power outage. Rather than act quickly and donate the imperiled food to the local food bank or even have a parking lot sale, the store management decided to "comp" all of it instead, destroying all of it so the suppliers would reimburse them in full.

All for lack of a backup generator that would have cost no more than the business they lost in those 16 hours. High-tech, you say?

Re:Here's an idea

[TubeSteak]

well between DNA and fingerprints then.

You cannot assume that DNA is unique.
You cannot assume that fingerprints are unique.
You cannot assume that a person has fingerprints.
You cannot assume that a person has fingers.
You cannot assume that DNA will not be trivially replicated/faked
You cannot assume that fingerprints will not be trivially replicated/faked
You cannot assume that fingerprints will not change
You cannot assume that DNA will not change

You cannot even assume that a person has only 1 type of DNA in their body.

It's easy to make generalizations
it's hard to account for all the edge cases.

Bagging Area...

[CohibaVancouver]

please place your item in the bagging area thank you please place your item in the bagging area thank you.

Re:Basic Search Engine

[Joe_Dragon]

they want you have to hunt for stuff and pass by other stuff that you may want to buy.