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Amazon and Whole Foods: A Tale of Two Data Sets

Posted by Jeff Pelliccio on Jul 10, 2017 9:00:00 AM

In ICS insights

On the surface, the recent take-over of Whole Foods by Amazon would seem to be a backwards step for America’s largest online retailer.  Whole Foods counted over 460 retail stores among its assets, causing many industry watchdogs to wonder why Amazon would take an interest in the company.

 The answer may lie in the distribution network that Whole Foods has created.  With stores spread out across the country, many experts have theorized that Amazon will use the organic food chain to complement its Amazon Fresh grocery delivery service.  By combining the data that both of these grocery giants have accumulated on their customers, Amazon stands to gain a large customer base.  In fact, it’s the data that Whole Foods has collected and how they’ve used it that makes the company so valuable.

What data will Amazon get?

Several experts have stated that the most valuable data that Whole Foods has collected is information about which products sell best at each of their retail locations.  For a company like Amazon, this gives them the ability to target their marketing to specific groups and regions.  Whole Foods’ data goes beyond simply knowing that apples sell well in Albuquerque, however.  The company has tracked sales figures for every product that their stores offer, and they’re able to determine which brands will sell best based on a number of market conditions including weather, season, and local events.

Whole Foods has also collected data about the size and average order of their customers, peak and low shopping times, and even the method of payment used to make purchases.  Collecting this data was a massive task for the company.  In fact, it’s believed by several people that the company developed their own software in order to collect this data.

How will Amazon use this data?

By knowing what products sell the best in various market conditions, it is believed that Amazon will be able to retain most of the Whole Foods customers by tailoring their product selection to individual tastes.  They will also be able to use the data to improve their own distribution network.  Because fresh groceries have shorter shelf lives, being able to predict which items will do better in various areas has the potential to save millions in potential product loss.

What does this mean for you?

Data and Software Engineers

Other companies watching this deal have been very curious to learn the exact nature of the data Amazon stands to acquire and are already thinking of ways to implement similar policies in their own companies.  In order to do this, however, many companies will need to hire software engineers and developers who are capable of modifying their existing data collection programs to gather more specific information.  Data Engineers and professionals in similar fields can help a company determine which types of data it needs to collect in order to stay competitive by reducing waste costs and better meeting their customer needs.

Merchant Service Experts

In addition to turning data collected on individuals into information regarding specific trends, companies looking to emulate the Amazon-Whole Foods model will also need to take a look at their payment systems.  Amazon has created their own merchant service system, Amazon Pay, that is capable of handling credit card transactions and even issues credit cards to customers.  Being able to manage customer credit effectively can a huge boon to retail and service companies, but companies must have the ability to know about potential customers in order for these types of services to be successful

Security To Protect Data

Finally, it is crucial for Amazon and Whole Foods to keep their data secure.  This amount of personal information could be greatly problematic for a company if their databases were breached.  In addition to considering the security of customer payment information, companies also need  to protect data involving personal shopping habits.  

If your company is thinking of ways it can improve it’s data collection, or simply wants to better use and protect the data it already has, call the staffing professionals at ICS.  This staffing agency has years of experience helping companies like yours find the right IT, Support, and Finance professionals to meet your needs.  Whether you have a temporary project that just needs some help, or you have ongoing issues that require a permanent staff, ICS can help.
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