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 Post subject: collecting better data: groceries
PostPosted: Mon Apr 09, 2007 2:58 pm 

Joined: Thu Apr 05, 2007 8:01 am
Posts: 243
a ramble...

One of the advantages of the Internet is that it enables mass exchange of information. This can play very well into the hands of the consumer. It can transfer knowledge from one consumer to another. I'm looking for tools that enable this exchange of information between consumers.

For example, my mother knows if $2.99 is a good price to pay for a bunch of asparagus in April. I couldn't tell you if this is a good deal or not, even if the asparagus bit me. If only the Internet had a good tool that could give me what the distribution of asparagus pricing. A great tool would give me the pricing distribution over time periods (annual patterns or historical patterns over past decades adjusted for inflaction). It could also tell me regional patterns (mashup?). That way I could walk into my regular grocery store, look at my wireless PDA and know that $2.99 is one standard deviation below the mean price of asparagus in April, but this is the mean price in June. Then I could do the same for salmon steaks or a 350g bag of Doritos. I wouldn't do this for every item, but likely just to check if "On Sale" really meant a good deal.

Now I'm sure there a plenty of people that would swear blue that they could tell you this information from their own memories anyways. I would bet that a good analytical system based on data would yield greater returns. More importantly, I could actually use such a system.

One area where we already see some significant development in this area is gas prices. There are a large number of sites distilling gas price information. (pun intended) I can even get this information pushed to my wireless PDA, so I know what the price of gas is in my hometown even if I'm in a city two hours away.

There are two significant social challenges to developing such a system:
1) Collecting data. Consumers (or other agents) need to have sufficient incentive to collect the data for the system. A rewards-based system may be effective. You get to look up pricing information for one product if you upload pricing information on three products.
The system would also need checks and balances to ensure accuracy of the data. Possible technical solutions may be taking pictures of the product and price with the cell phone camera and firing it over to the central server for processing. Attach GPS data for location and time-stamps. However, grocery stores may explicitly ban this activity. A second technical solution may involve scanning your receipt and firing it over to a central server for processing. The server would use optical character recognition technology to process the receipt and input the data into the database. You could have community verification of data. For example, your data isn't any good until two or three other members enter matching data.
2) Standardization of product. A 350g bag of Doritos is a 350g bag of Doritos no matter where you buy it. The same does not apply to a bunch of asparagus. You might get one extra stalk at one store, the stalks may longer, or it may be fresher. However, I would rather have the system tell me pricing information, leaving me to decide on the quality of the product.

On a small scale, it may be possible even to develop software that enables a consumer to track the pricing patterns for products they buy themselves. All the software needs to do is record all the grocery purchases they made. After you collect two or three years worth of data, you have a pretty powerful set of data that tells you if $2.99 is a good price for asparagus in your area. Entering in this data manually into your database would be very cumbersome. It needs to be automatic and painless.


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PostPosted: Mon Apr 09, 2007 3:02 pm 
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I would love this, and my wife would hate it. The downside (for me) is that I would end up spending hours grocery shopping. Oh, and I'd blow all of the savings (and then some) on an internet enabled pda/cellphone (and service) just so I could dork out in the grocery store.

The problem with something like this is that pricing is probably highly localized.

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PostPosted: Mon Apr 09, 2007 3:52 pm 

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This would be a great system if it can somehow factor in the quality of the food in question as you already touched on the point where some stores offer fresher food. I'm not sure if your area have any asian supermarkets around. If there are, I would suggest going there to take a look. You will noticed that every item is cheaper than the american name branded stores. However, you will also noticed that you really need to pick within the bin to find ones (the apples that aren't bad for example) that you deem acceptable which this system would have a hard time presenting.

The gas prices work because people do not associate brands of gas or different gas station locations to be different. 87 octane Exxon Mobile is the same as 87 Chrevon but with apples (in the example above), there is a difference.

I would also expect this to take a while to develop since all the data is controlled by the grocery stores and no supplier will spend money to develop a system to make themselves compete on price even more.

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PostPosted: Mon Apr 09, 2007 5:19 pm 
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Location: Portland, Oregon
This reminds me of one of my pet peeves: This part of Oregon is a cornucopia of produce in the summer, and many grocery stores carry locally-grown berries, fruits, and vegetables. But not the Safeway down the street. The Safeway down the street doesn't carry locally-produced anything. Makes my blood boil. :evil:

(I'm a big advocate of supporting local economies.)


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PostPosted: Mon Apr 09, 2007 7:13 pm 
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Location: Houston, TX
I think another problem you'll run into is the volatility of prices.
I don't have first-hand knowledge, but I imagine that the automation of POS systems makes it very easy for retailers to change their prices on literally a moment's notice. There are a couple of good "find local gas prices" websites that probably have the technology/model you want, but I also recently read a story about a guy who noticed that the price of gas changed between the time he pulled into the station and the time he started pumping.


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PostPosted: Tue Apr 10, 2007 8:21 am 

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nickel wrote:
I would love this, and my wife would hate it. The downside (for me) is that I would end up spending hours grocery shopping. Oh, and I'd blow all of the savings (and then some) on an internet enabled pda/cellphone (and service) just so I could dork out in the grocery store.


Yes, good point. My wireless PDA is paid for by my employer, so that would make this a lot more cost-efficient.


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PostPosted: Tue Apr 10, 2007 8:24 am 

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tinyhands wrote:
I think another problem you'll run into is the volatility of prices.
I don't have first-hand knowledge, but I imagine that the automation of POS systems makes it very easy for retailers to change their prices on literally a moment's notice. There are a couple of good "find local gas prices" websites that probably have the technology/model you want, but I also recently read a story about a guy who noticed that the price of gas changed between the time he pulled into the station and the time he started pumping.


I'm not too concerned about this problem. I think if any major retailer starts to play these types of games, they'll get into trouble with the law pretty quickly. I'm confident in legislation against such bait-and-switch type tactics.

I have never had problems with gas stations switching prices on me. In fact, if they are raising the price, they usually have a time delay between when they change the big sign and the price on the pumps. That way, you may find that the the price on the pump is lower than the price on the big sign, but never the other way around.


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PostPosted: Tue Apr 10, 2007 6:59 pm 

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Any recommendations for a good OCR program to start developing a scanning application to directly scan receipts into my computer?


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PostPosted: Wed Apr 11, 2007 1:01 pm 
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Location: Houston, TX
I don't know about OCR, but Quicken would be easy to use for tracking individual items, categorizing them and monitoring trends. Create a separate account for each store.


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PostPosted: Sun Apr 15, 2007 4:49 pm 
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Location: New York, NY
jdroth wrote:
(I'm a big advocate of supporting local economies.)


Where I am, supporting local economies by buying local produce is very expensive, seeing as there are no local farms anywhere near NYC.


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