supermarket

Weekend read: your supermarket owns you

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I’ve thought this a lot and I think I’ve said it before. Whoever walks into a supermarket at the same time as you will be walking out at the same time too. We don’t shop, we move and we are moved around stores in hyper-efficient ways. The website Bon Appétit has a meaty two-part piece about the psychology of these shops – and how when you know what is being done to you, you might be able to do something about it.

The simple fact of the matter is that going grocery shopping isn’t—and never was—as simple as you imagined, whether you’re on your own for the first time, or you’ve been shopping for a family of eight for 20 years.

Sometimes it seems less like you’re going out to buy milk and bread than you’re buffeted by endless marketing, too many choices, and not enough information. Does the perky green label mean that this box of cereal is good for me? Are there certain expiration dates that are less important than others? Am I a bad mom if I buy frozen spinach for dinner? How do I know what kind of fish to buy? Am I right to be a little scared of the butcher? And how did I end up spending $150 if all I went in for was some milk and bread?

How to Buy Food: The Psychology of the Supermarket – Michael Y Park, Bon Appétit (30 October 2014)

Read the full piece.

Via The Loop.

The statistics behind BOGOF

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I’ve noticed that whoever walks in to a supermarket at the same time as me is who will walk out at the same time too. We are driven around stores like machines, guided to what we want and where they want us to buy it, then kicked out as quickly and profitably as possible. I’m fascinated by how these stores work and so this article held me up this morning.

Once Dangler has set up his basic pricing rules, he’s ready to start testing out potential discounts and special offers to try and improve sales. He goes for an aggressive price cut on the own-brand natural yogurt, cutting the profit margin to a few pennies, and the volume of predicted sales balloons as a result. It turns out that people are really price-sensitive when buying cold desserts. Alas, a large proportion of the gains is offset by a drop in branded sales, meaning the idea would probably result in worsening relationships with suppliers in exchange for a modest increase in profits. We keep searching for the optimal solution, with every small change having an immediate trickle-down effect on related products. It’s like a chaos theory testing suite, with each price being a flap of a butterfly’s wings. The only thing missing is a button to make the system automatically optimize everything, you still need humans to input scenarios.

Along the way, I discover phenomena like asymmetric cross-price elasticity — an eight-pack’s price affects sales of four-packs more strongly than vice versa — and the fact that a “buy one, get one free” offer is more cost efficient than a straight 50 percent price cut (that’s because some people will still take just one).

You Priced This Milkshake – The Verge

Read the whole piece to find out who this Dangler is and how while this is an article about American supermarkets, it is featuring software owned by Tesco here in the UK.

 

http://www.theverge.com/2014/5/2/5667606/supermarket-price-optimization