Supermarkets: High-Tech Hotbeds 126
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."
How much tech for a nickel? (Score:4, Interesting)
Re:How much tech for a nickel? (Score:4, Interesting)
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.
How supermarkets get your data – and what t (Score:4, Interesting)
Re:It's a never ending infowar (Score:3, Interesting)
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.