Big Data arrives at the supermarket

VICTORIA THIEBERGER
Spectator
As shoppers become more focused on where their food comes from, how it was grown and what if anything has been added to it, retailers have been struggling to keep up.
All that information is known to the farmer and the store, but it hasn’t been passed on to consumers.
Now an upmarket grocery chain in the US, Whole Foods, which markets itself on its quality and often organic produce, wants to provide an audit trail of every item that will be available to shoppers, using cloud-based software.
Grocery shoppers will soon be able to access as much information about the organic peach they are about to buy as the farmer who grew it.
When the software system is in place, customers will be able to find out hundreds of attributes of any given product – information such as when it was harvested, country of origin, water usage, distance travelled, and perhaps watch a video of food production.
Whole Foods hopes the technology will give it an edge with consumers by differentiating its products amid growing demand for natural and organic food at the upper end of the market (the chain was once nicknamed “Whole Paycheck” for its prices).
Since the deal was announced last month, some 50 retailers across the US and the UK have approached the enterprise software company, Infor, behind the system.
“There’s been no new merchandising system in 25 years, and what was possible then based on the technologies then, it’s very different now in retail now,” Infor chief executive Charles Phillips told The Australian in an interview.
Phillips, a former president at Oracle, says retail software has become a hodge-podge of technologies, with new systems bolted on over time for online, mobile and other applications all in separate silos.
Infor has had interest from all areas of retail including clothing and big-box stores; several more deals have been signed but not yet announced.
Grocery retailing, with its various categories including perishables, frozen and bakery, is one of the most complex areas of retailing (something one well-known Australian supermarket CEO failed to appreciate). Whole Foods says it has 100,000 suppliers and that amount of data on individual items can’t be stored or easily accessed in a data centre, hence the move to the cloud.
“The farmer has that level of detail, but they had no way of communicating it to Whole Foods. And Whole Foods had no way to connect to the customer. You need a network to do that.
“All that data is useful. The difference is now you can afford to collect unlimited amounts of data if you do it in the cloud. You just couldn’t afford to collect that amount of data in your own data centre,” Phillips says.
The system is designed to integrate “omni-channel”, meaning in-store and online channels, thus opening up the products available online to customers in the store, just as Amazon plans with its new physical book store in Seattle.
For the retailer, the platform will revamp the merchandising and supply chain, giving new levels of detail on inventory, cost and order management and replenishment across all channels.
“Retailers have known for years their software has not kept up with the times,” says Ray Wang, analyst at Constellation Research. “They want to bring the content, network and technology together to transform their business models.”
Phillips says the team that devised the previous generation of retail software 25 years ago hailed from Oracle, and they were hired en masse to develop the new software suite at Infor. Infor competes with Oracle and SAP, with a focus on industry-specific applications.
Phillips is an atypical American CEO, softly spoken and a former Marine hailing from Arkansas. With his company’s direct approach of engineering and designing software in conjunction with its customers, retailers may have a new edge in a highly competitive market.
Whether consumers are sufficiently curious about where their vegies come from remains to be seen, but recent labour scandals involving food processors and manufacturers in Australia suggest they will be.
The reporter travelled to Inforum in Paris as a guest of Infor.