Chapter 1, Problem 1E

Grocery shopping Many grocery store chains offer customers a card they can scan when they check out and offer discounts to people who do so. To get the card, customers must give information, including a mailing address and e-mail address. The actual purpose is not to reward loyal customers but to gather data. What data do these cards allow stores to gather, and why would they want that data?

To determine

What data the stores gather with the card and the reason why the data is gathered.

Answer to Problem 1E

The what in the data gathered by the store includes the list of items purchased by the customer, the frequency of purchase by a particular customer, the date of purchase, the time of purchase, the locality from which the purchase is made, the locality of residence of the customer, and so on.

The why behind the collection of the data is to use the data to improve the business strategies of the store according to the time, place, and locality.

Explanation of Solution

Given info:

Several grocery store chains offer their customers a card to scan during check-out; they are issued once the customers provide some information about themselves, such as mailing address and e-mail address. The customers who accept the card are given discounts, while the data about the customers is gathered by the store.

Justification:

The grocery store chains typically have several stores scattered over the whole country. Once a customer is issued a card, by taking their mailing address and e-mail address, the customer becomes a unique identity. Whenever the card is scanned after purchase, the store automatically gets the whole data regarding the purchase of the customer.

Thus, an answer to what data that is collected includes the list of items purchased by the customer, the frequency of purchase by a particular customer, the date of purchase, the time of purchase, the locality from which the purchase is made, the locality of residence of the customer, and so on.

The stores aim at increasing their business profits. The complete information about each individual’s purchase helps the store to create a customer profile. The store management can decide customers of which age-group and gender buy which type of article. Determining which articles are frequently bought together helps the store management to arrange their goods in such a way that the goods attract the most attention; it also helps to decide which items to put on discount. This data helps the store management to decide on their advertisement policies, as well.

All this information is gathered to address the question why behind the collection of the data; that is, to use the data to improve the business strategies of the store according to the time, place, and locality.