{"id":288342,"date":"2018-12-01T14:56:21","date_gmt":"2018-12-01T12:56:21","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=288342"},"modified":"2018-11-30T17:15:53","modified_gmt":"2018-11-30T15:15:53","slug":"the-supermarket-that-knows-what-you-want-before-you-know-it-yourself","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/288342\/the-supermarket-that-knows-what-you-want-before-you-know-it-yourself\/","title":{"rendered":"The supermarket that knows what you want before you know it yourself"},"content":{"rendered":"
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The 21st-century reboot of the helpful corner-shop owner is an algorithm supercharged with consumer data that knows what you want before you know it yourself.<\/p>\n

At UK supermarket J Sainsbury Plc, that means an online shopper in the habit of buying cat food won\u2019t see any products for dogs under pet supplies; somebody on a diet will be kept clear of tantalising snacks; and anyone with food allergies will be warned about each item that contains the reaction-inducing ingredient.<\/p>\n

\u201cWe know you. You trust us. It can be that two-way,\u201d said Clodagh Moriarty, Sainsbury\u2019s chief digital officer. \u201cThe more we learn about you, the better we can be.\u201d<\/p>\n

Grocery loyalty programs may have been around for years, but with the help of sophisticated data analytics, they are becoming much more than another piece of plastic to swipe at checkout.\u00a0For retailers, they’re a direct line into the minds of customers, and store owners are deploying their data dragnets to personalise the shopping experience, drawing on a growing trove of input as more consumers shift online to buy anything from beer to light bulbs.<\/p>\n

The urge to get into consumers\u2019 heads is particularly acute in the UK, where more than 7% of grocery sales happen online, compared with only about 1% in the US. The contrast is even starker with Germany, Europe\u2019s largest economy, where just 0.75% of people buy their groceries online.<\/p>\n

That\u2019s turned the UK into a veritable petri dish for retailers seeking to cultivate ever more sophisticated online shopping experiences to keep web giants like Amazon.com Inc. at bay.<\/p>\n

One of the leaders in amplifying online grocery sales is Ocado Group Plc. The Hatfield, England-based online retailer operates warehouses with armies of robots that fill customers\u2019 orders. While it maintains just over 1% of the UK grocery market, Ocado\u2019s bigger business is to sell its high-tech model to other stores.<\/p>\n

It has contracts with grocers across Europe and signed a deal with Kroger Co this year to build 20 fulfilment centres in the US.<\/p>\n

Behind the robots, Ocado uses machine learning to get to know its customers well enough that it can pre-fill a cart with all the items they will likely buy. In addition to delivering the groceries, Ocado will provide reams of customer data to companies on its platform.<\/p>\n

Clients will be able to see not just what its customers buy, but also what they clicked on and didn\u2019t buy, what order the items went into the basket and how long it took to shop.<\/p>\n

Consumers spooked by what they might consider corporate overreach can request a copy of all the personal data a retailer has about them and then give or sell it to another business. Businesses must provide the personal data to customers in the EU, but global customers may also request it.<\/p>\n

\u201cThere are so many ways supermarkets are collecting data that it\u2019s bewildering to the average person,\u201d Saunders said.<\/p>\n

For Jane Jux, 52, of Bray, England, volunteering her personal data is a fair trade. She\u2019s been shopping at Ocado for years and said the grocer helps her keep up with purchasing.<\/p>\n

\u201cSometimes they prompt me to add something to my basket that\u00a0I hadn\u2019t appreciated I was running low on,\u201d Jux said. \u201cIf they didn\u2019t \u2018know\u2019 me they couldn\u2019t do that.\u201d<\/p>\n

Ocado chief technology officer Paul Clarke likens the personal touches to the neighbourhood store owner who knew his parents personally and what they typically bought. \u201cInstead of the local grocer who has that intelligence and knowledge, it\u2019s algorithms and machine learning,\u201d Clarke said.<\/p>\n

The personalised experience can help boost profits by allowing retailers to improve marketing, manage inventory and better design their own-label products. Without those capabilities, companies will fall behind as Amazon grows its online business and reaches more customers at bricks-and-mortar stores like Whole Foods and Amazon Books.<\/p>\n

\u201cBrands need to start getting to know their customers in a way they haven\u2019t before,\u201d said Zoe Leavitt, a retail analyst at CB Insights based in New York. \u201cIf grocery stores don\u2019t have a solid connection to the customer, if they don\u2019t have their own private-label products, they\u2019re only selling products that can also be bought on Amazon.\u201d<\/p>\n

At Sainsbury, the retailer draws customer data from a growing number of sources. The company is in the midst of an acquisition of Walmart\u2019s Asda that could make it the UK\u2019s biggest supermarket. On top of that, Sainsbury acquired the loyalty rewards company Nectar earlier this year, which gives users points based on purchases from over 500 brands.<\/p>\n

As companies learn more ways to gather customer data, they\u2019re starting to deliver personal experience in the store as well. Grocers such as Tesco Plc are experimenting with an app feature that allows customers to scan items and check out without having to visit a cashier. Those apps could soon use geo-location to detect if a customer is in a store and then offer promotions specifically tailored to that person\u2019s buying habits.<\/p>\n

Despite all the online buzz, in-store sales remain a key advantage for traditional retailers over their digital competitors. While e-commerce grows rapidly every year, most sales are still made in person. The ability to capture that data and merge it with an online customer profile\u00a0could be a significant asset.<\/p>\n

\u201cThrough the loyalty data you know each individual customer,\u201d said Dave Clements, global retail director at data analytics firm Dunhumby, which has worked with companies including Tesco and Nestle. \u201cDepending on where you are, what location you\u2019re in, the ability to engage customers through mobile and digital channels is a real change.\u201d<\/p>\n

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Read: Deloitte opens new connected Cape Town \u2018store\u2019 \u2013 and explains how SA supermarkets may be set to change<\/a><\/strong><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The 21st-century reboot of the helpful corner-shop owner is an algorithm supercharged with consumer data that knows what you want before you know it yourself.<\/p>\n","protected":false},"author":59,"featured_media":285090,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26,13532,13534],"class_list":["post-288342","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline","tag-j-sainsbury","tag-ocado"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/288342","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=288342"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/288342\/revisions"}],"predecessor-version":[{"id":288608,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/288342\/revisions\/288608"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/285090"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=288342"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=288342"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=288342"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}