Insights: Going Out for Milk in 2020

In a mere 15 years the friendly
neighborhood FoodWorld could be a dramatically different place to buy groceries. No more fumbling with reward cards from five different stores, no more stacks of coupons and no more pokey checkout stands.  In part we can thank RFID for the coming advancements, but much of our future shopping marvels will instead come from the rapidly developing strategy and technology associated with Trade Promotion Management. 

In 2020 many grocery stores will maintain an extensive database profile of individual consumer food preferences, health-related conditions, from allergies to high cholesterol, which could affect your food choices, your philosophy on what you like to pay for particular items, including pet preferences, along with other data collected from years of recording your purchases and use of coupons. All this data will allow stores to make sure favorite products are in stock. Here's how:
When faced with 20 brands of any item and no time to read labels what resources do you rely on? Word of mouth? Or advertising? Most people, when faced with choosing in many product categories rely on brand recognition established through advertising.  And then they compare price points.  In time, a selection guidance system, based on your preferences, will narrow the choice from 20 to two or three. 

Shift In Advertising
So, after more than 200 years of being persuaded and cajoled, prodded and convinced, mainstream advertisers and advertising will play little or no role in many choices you will make at the grocery store. But that doesn't mean these product manufacturing giants will stop trying to influence buying decisions. On the contrary, they'll spend even more, but on strategies and technology at the point of sale. Consumer goods manufacturers are already collecting and storing a great deal of information through reward cards. Companies know data holds the key to unlocking our buying patterns, but as of yet, most of them haven't learned the whole truth of why we, as individuals, buy what we buy. Sure, they predict purchase patterns in groups and, with seasonal promotions, are increasingly successful at saving time with one-stop-shopping. But refining the art form of understanding groups to predicting individuals is still on the horizon. Eventually, companies will know what we buy, why we buy it and when. 

How It Might Work
Strolling down the breakfast cereal aisle, you approach a kiosk, scan your fingerprint, and based on your profile data, you receive a series of choices. Frosted Flakes, No. 1, you relate to Tony the Tiger, No. 2, Special K because need to cut calories and No. 3, a new choice. You make your choice. It's duly noted. Or maybe you want more choices, or to sort by price, or the product with the lowest amount of sodium. All possible at the kiosk, quick and accurate. Finally, we will live in a world where product selection will largely be based on product ingredients and performance facts, not some fantasy of what you're supposed to look like when you're consuming it. 

Of course, advertising agencies around the world shutter to think the billions spent creating cutting-edge campaigns and buying expensive air time will dry up, but in some product categories, that is exactly what's going to happen. Food & Beverage companies will replace traditional advertising campaigns with more sophisticated Trade Promotion programs directed at giving shoppers exactly what they want, based on the hard, but flexible, data of their shopping reality. If today's advertising agencies want a piece of that action, they better bone up on TPM.

Back at FoodWorld, items bagged, you move through the check-out scanner with only one requirement -- place your hand on the palm reader. Instantly, FoodWorld tallies your purchases, debits your account and updates your database profile. You're on your way. Big Brother step aside, the future age of grocery shopping won't be like anything we've seen so far. And it's likely to be even more unbelievable as we peer far into the distance. For many manufacturing and retail companies, and consumers, the future couldn't be brighter.

WHAT'S IN STORE
New Developments Ringing Up at Retail

Supermarkets Spend Big on Self-Checkout
Supermarkets plan to increase spending on self-checkout systems and workforce management software in the next 12 months, according to a new report from IHL Consulting Group. "Self-checkout is the prominent focus of hardware capital spend this year for grocers," says Greg Buzek, president of IHL Consulting Group. "These systems are quite expensive in comparison to most other capital projects and the purchases are dominating IT budgets this year. Thirty-one percent of the sample planned to install self-checkout systems in 2005 and 50 percent plan to do so by June 2006. Grocers are planning to upgrade to self-checkout before replacing aging point-of-sale (POS) hardware. Once self-checkout is installed, POS hardware and software are their next big purchase in most cases. The report, "IT and the North American Supermarket," reveals how technology can be used to meet the challenges currently facing grocers. A summary may be viewed online at www.ihlservices.com.

Online DVD Rental Competition Heats Up Vancouver, BC-based Videomoviehouse.com Inc., which has been selling movies online since June 2001, is moving into the DVD rental business, going head-to-head with market leaders Netflix and Blockbuster. Subscriptions will be available to U.S. and Canadian customers. It expects to build its rental business on the 200,000 customers it reports having sold movies to over the past four years. One of its differentiating factors will be the ability for consumers to buy or rent

from the same site, the company says. Videomoviehouse.com will charge $17.99 a month for unlimited rentals with three out at a time, the same as Netflix. Blockbuster.com charges $14.99 a month for the same terms and throws in two monthly rentals from a Blockbuster store. In related news, Amazon.com recently launched a DVD rental service in Germany. It is Amazon's second DVD rental offering, following the launch of rentals in the U.K. late last year.

From the pages of RIS News
By rethinking business processes and centralizing systems in a Web-Based, near-real-time approach, Groupe Casino improved sales, assortments, turns, fulfillment performance and labor productivity -- all while maintaining a tight IT budget. "Now we have better accuracy, better turnover, better sales and ;lower operating costs," says Bulent Ergin, Groupe Casino's IT applications development director. With more than 9,000 stores in 15 countries, Groupe Casino recorded more than $30 billion in sales in 2004. To read this story in its entirety, in addition to catching up on the latest retail trends,
please visit RIS News, www.risnews.com.