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The One to One Future, Part II
Feb 02, 1998 :: Michael Sippey

WELCOME TO SAFEWAY STORE #687
PLEASE LET US KNOW HOW WE MAY HELP YOU

The checkout clerk finishes bagging my Oreos, my Fresca, my two containers of Dannon Yogurt, my two boxes of Honey Nut Cheerios. I pay cash, and let her scan my Safeway Club Card. She makes change, rips the receipt from the register, and scans her eyes down its length for a split second.

"Thank you, Mr. Sippey."

The Club Card enables Safeway to gather billions of lines of purchase history data on their millions of customers in their 1,059 stores in the U.S. and Canada. In return, they give away a few dollars here, a few dollars there...just enough to keep people using it. My second box of Cheerios was free, and the Oreos were $1.50 off.

Using data mining technology, Safeway will be able to more accurately customize the appropriate product mix for each Safeway store. They can stock the items their customers want, when they want them. They can learn which items have a steeper demand curve, enabling them to boost sales by lowering its cost just a few pennies.

In the one to one future, Safeway will use the Club Card to market individual food items to individual consumers. The bar-coded card is just the beginning; an enhanced Club Card with an embedded chip and a low-power display could enable Safeway to offer individualized prices to each consumer, based on past purchase habits and propensity to spend that extra dollar. Walk past those Oreos without picking them up, and your own personalized discount price would pop up on your enhanced Club Card.

In the one to one future, Safeway could also sell their massive database of purchase history to anyone who cares what grocery items you buy. Aggregate level statistics could be sold to neighboring (but non-competing) retailers, so that they too can accurately predict their customers' purchase patterns.

Individual level statistics (what food you bought last week) could be sold to direct marketers, couponers, publishers...or even health insurance companies. In the one to one future, your insurance premiums could be adjusted on a near-real-time basis based on your recent food purchase patterns. Buy a steak and sour cream, your premium goes up. Buy bran cereal and nonfat milk, and your premium goes down. And, given the appropriate networked calendar software, they could even schedule you for an appointment with your managed care specialist should your purchases of foods with high levels of saturated fats reach a critical level.

"Thank you, Mr. Sippey. Oh, by the way, Aetna has scheduled you for 2:00 next Tuesday for a mandatory cholesterol check. Your appointment confirmation has been printed on your receipt."

Read other pieces in the One to One Future series.

 

 

Other pieces about personalization: