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Kennedy: Amazon uses supermarket to gather data

Kennedy: Amazon uses supermarket to gather data

Kennedy: Amazon uses supermarket to gather data
Photographer: Shutterstock

Conventional wisdom might suggest that Amazon’s purchase of Whole Foods in 2017 simply scratched an itch the company has long had to dominate food retailing.

But Doug Stephens, who calls himself a “futurist” and founded the Toronto consulting firm Retail Prophet, sees it differently.

He considers Amazon a data company, and what better way to learn about consumers than to look inside their grocery bags, which most shoppers will fill more than once a week.

“I believe that data was the primary reason for wanting so desperately to get into the grocery market,” Stephens remarked on a webinar hosted last week by the trade publication Chain Store Age.

Stephens’ topic for the session was “The Store of the Future,” so of course Amazon figured into the discussion.

He suggested that a bag of groceries is a bag of data to Amazon, from which the company can infer whether the purchaser has pets or kids, or both, and the kind of lifestyle they’re leading.

And what is it that Amazon intends to do with this “inordinate cache of data about us?” Stephens says the company showed its hand in a patent filing a few years back for “anticipatory shipping” – putting products in constant transit and so geographically close to a consumer that they’re available for delivery almost immediately, further cementing Amazon as the go-to shopping platform.

“They believe they will reach this level of predictive analytics simply by being able to triangulate our behavior based on what we have bought in the past,” he said.

Amazon’s “data play” in groceries was not just in acquiring Whole Foods, Stephens told me later.

It’s also apparent in reports last week that the company has started to sign leases for another supermarket chain it plans to create.

And then there are its other brick-and-mortar holdings: Amazon Go, the pay-by-app convenience store; Amazon Books, which offers a curated selection of books and Amazon “smart” devices; and Amazon 4-Star, which sells customer-selected online favorites.

“Each of these store models serve unique strategic and experimental purposes,” Stephens replied to my emailed questions. “And yet, at the same time, each of these physical location formats also provide Amazon with important data on consumer behavior and tendencies.”

And how do we consumers feel about this peek into our privacy?

“Well, we’re OK with it,” Stephens said during the webinar.

Surveys show consumers are willing to accept companies like Amazon using “whatever means they can to understand our needs and preferences,” he noted. “Provided we are getting a return in exchange … provided we’re getting some value back.”

For some, that value is Amazon meeting a promised delivery date.

And every time that promise is kept, Stephens said, Amazon gains “more and more of our trust, and we in turn are prepared to give more and more of our data.”

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected]

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