Technology Migrates From Backroom to Store Floor

It wasn't planned that way, but this week's print edition of SN could be themed “The Technology Issue.”

Between the bookend anniversary features — online grocer Peapod's 20th and the bar code's 35th — there's a news story in each of the sections of the magazine showcasing food retailers' use of technology to provide better service for customers.

At Sam's Club, for example, the company is now diving much deeper than ever before into data analysis to inform its merchandising and pricing decisions.

Sam's also is garnering some early success from a new eValues program that provides personalized discounts based on past purchasing history using its membership cards. While its parent company, Wal-Mart Stores, has long been known for its use of technology and logistics to drive efficiencies in the supply chain, Sam's, by virtue of having a rich database of individual members, is able to apply technology to the customer-facing side of the business as well, in a way that Wal-Mart's traditional discount stores and supercenters might never be able to.

“We've been focusing all of our investments around our core business and ensuring that, going forward, insights is a core capability at Sam's Club,” said Brian Cornell, the former Safeway executive who is now president and chief executive officer of Sam's. “We want to make sure we know more about our member than anyone else.”

The membership card at Sam's — like the loyalty card at more-traditional supermarket operators — adds a valuable dimension to the data trove that retailers have been accumulating for the past 35 years by scanning bar codes.

Loyalty-card technology is also allowing retailers to provide additional services to their shoppers, such as the ability to electronically load coupons at Shop ‘n Save and other retailers, and the ability to trace the source of ingredients in private-label salads at Kroger.

As these last two stories illustrate, technology's reach is expanding from the retailer's backroom toolbox into the hands — literally — of shoppers, especially given the growing popularity of Web-enabled mobile devices. In the Kroger example in particular, it is notable that shoppers will be able to go online and comment on specific salads in addition to being able to trace the origins of the ingredients.

This points to an emerging technological convergence — the connection of social networking media like Facebook and Twitter, where consumers are already freely commenting on products and retail experiences, with those media controlled by the retailers themselves.

As Scott DeGraeve, senior vice president and general manager of Ahold's Peapod division, sums up in the cover feature, “As social networking develops, it will be good for us. We also expect that applications on the phone will continue to emerge — helping customers make a shopping list or getting promotions and news to people. That will be important in-store and online. As people get more digitally plugged in, it gives us the ability to give them better service and more value.”

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