Image via WikipediaThis post is part of a series on how web technologies and concepts can benefit various organisations, the particular focus being APIs and open data. In this post I will look at supermarkets via Sainsburys.
Sainsburys is the UK’s second largest supermarket chain. Sainsburys wasn’t chosen for any particular reason merely it is representative of supermarkets in general. Before proceeding it is worthwhile considering what a supermarket really is. A supermarket is an organisation that aggregates shoppers by providing the convenience of purchasing a majority of consumables from one place. Larger supermarket companies can also be considered a logistics company specialising in moving groceries from producers to shoppers.
Sainsburys provides a fairly stock standard website and online shopping portal. It is rather difficult to use in my opinion and one of the key reasons that I haven’t bothered to try and shop for groceries online.
The game changes by providing APIs.
The APIs would provide access to data such as purchasing habits, aggregated demand data (e.g. 2000 tomatoes where purchased today), current stock, current prices, how much carbon/energy used in getting an item to the store. But the APIs shouldn’t merely provide data but also provide access to functionality such as making a payment, placing an order, ordering stock and communicating with the consumer.
The APIs would form the basis of Sainsburys online offerings allowing them to be easily updated and changed to allow new services and applications to arise and fall. The APIs also provide a means by which internal teams can create internal applications without the need to extensive resources. The APIs become a means to allow innovation at the edge of the organisation.
The real power of the APIs comes from allowing 3rd parties to use the APIs. Suddenly startups and entrepreneurs can create new applications that mash Sainsbury data and functionality with other data and functionality creating new value. Sainsburys creates an ecosystem of functionality based around it. The APIs allow Sainsburys to move from being simply a supermarket chain to a shopping platform that blends bricks and mortar with the web.
Many will say that the information is valuable or would provide Sainsburys competitors with an edge. They would be wrong. Information is only valuable when it is useful. Lots of the information contained in Sainsbury only becomes useful when it is unlocked. Take for example my weekly grocery list, while that is locked in Sainsburys it isn’t useful. It has no value, but provide that information to me along with items I can substitute to reduce my grocery bill then there is value, which leads to the second requirement to be useful, which is context. Information is only useful in context with other information.
The competitive edge one is very traditional thinking and it ignores the reality that the competitive advantage accrues to the company that is more open rather than less. The ecosystem allows new resources to be devoted to creating new applications, far more than Sainsburys could muster on their own. The ecosystem creates a positive feedback loop that is hard to disrupt creating advantage. Rather than Sainsburys having to devote resources to picking winners for new applications, the ecosystem does that for them. Those that create value for the ecosystem survives while those that don’t wither away.
Here is a short list of potential applications that become possible with the APIs and open data:
- Review my shopping list
- Subscribe to regular grocery delivery
- Import my shopping list & prices into another app
- Local supplier Dashboard
- Tracking energy and carbon of purchases
- Mobile application for navigating stores
- Mobile application for store management
Review My Shopping List
The user gets access to all their purchases and the prices they paid. This is then reviewed looking at what could be substituted to bring the price of the weekly shop down. This could be something done by Sainsburys or could be done by 3rd parties. Probably both.
The review My Shopping would more than likely be part of a broader finance and shopping management application, but even on its own would be valuable to many people. Extensions of this basic application is to allow users to see suggested recipes based on what they purchase, start with a set of recipes and build a grocery list and set a budget and build a grocery list based on the budget and standard needs.
Local Supplier Dashboard
The dashboard would in effect allow local suppliers to provide Sainsbury with produce to particular stores using a JIT framework. The dashboard would allow the supplier to enter what they have in stock and then they can bid on meeting the stores needs for the next day.
Suppliers would also get access to information on patterns in demand allowing them to change their own production to match demand better.
Mobile Application for Navigating Stores
Each store is different and their stock availability, to say nothing of location changes all the time. The application would use the APIs to provide accurate and up-to-date location and availability for items within a store and provide directions to the location.
The application can also serve to provide a feedback loop for the store, as it would allow the user to enter information about the quality and similar information for the items.
In The End
The APIs open up a lot of opportunities and create an ecosystem based around Sainsburys. This ecosystem becomes an advantage that is very hard to disrupt. By creating value for their customers and suppliers Sainsburys will be creating value for themselves. Value that is sustainable.