Pao de Acucar: Brazilian Grocer Gets Personal with Customers - Essay Example

Pao de Acucar: Brazilian Grocer Gets Personal with s Gathered aggregated checkout data that is not associated with a particular can provide some interesting insights for a retailer and help the company to streamline its operations. Trends in overall consumption of certain products and product groups can be traced over time, and aggregate preferences of the customers at a given outlet identified as well. It helps the retailer to plan the delivery schedule and volumes accordingly in order to minimize inventories and out-of-stock.

However, this type of the customer data has significant limitations with regards to data mining possibilities because it is not associated with a particular customer. If the company can obtain customer-specified data, as in case of Pao de Acucar's loyalty program, it can reap considerable benefits. Reliable data associated with a particular customer is a powerful tool while it is a means to segmentation of the customers and personalization of the services. In every branch and industry, from e-commerce to mobile services and retailing customer segmentation and successful personalization are seen as a key to success.

When data is associated with a particular person, it is possible to group the customers according to age, family size, income, and geographical locations etc. and define the trends in consumption within each of the groups separately. It is also possible to find out if there is a correlation between purchases of particular products, which may be then considered for a bundling offer or, on the contrary, being placed far away from each other in order to make the customer to walk around and search for them.

Such data improves not only the retailer's operations, but also its communications with the customer. Promotions and direct mail are specifically targeted. The goods which are of interest to the customer or this particular group according to the history of purchases are featured without unnecessary burdening and intimidating the recipient with the information he or she finds of no use.It becomes especially powerful if the customer data is combined from several different resources, because it allows creating a more complete customer profile, and possibly designing joint programs.

It also reduces the random fluctuations caused by shopping at different place.However powerful the personalized customer data is, it arises many privacy protection issues. Customers may feel intimidated by the fact that data on their activities and habits is gathered and analyzed. Especially if it concerns their everyday habits and is collected by several different entities, they may feel it breaches their privacy significantly.