retail news in context, analysis with attitude

The Wall Street Journal had an interesting piece the other day about the tangible and intangible value of big data.

"What groceries you buy, what Facebook posts you 'like' and how you use GPS in your car: Companies are building their entire businesses around the collection and sale of such data," the Journal writes. "The problem is that no one really knows what all that information is worth. Data isn’t a physical asset like a factory or cash, and there aren’t any official guidelines for assessing its value … As more companies traffic in information and use big-data analytic tools to find ways to generate revenue, the lack of standards for valuing data leaves a widening gap in our understanding of the modern business world."

One example cited in the piece: Kroger.

"Supermarket operator Kroger Co. records what customers buy at its more than 2,600 stores and also tracks the purchasing history of its roughly 55 million loyalty-card members," the Journal writes. "It sifts this data for trends and then, through a joint venture, sells the information to the vendors who stock its shelves with goods ranging from cereals to sodas.

"Consumer-products makers like Procter & Gamble Co. and Nestlé SA are willing to pay for those insights because it allows them to tailor their products and marketing to consumer preferences."

Some estimate that "Kroger rakes in $100 million a year from data sales. But Kroger executives are mum on the subject. Kroger does say that it follows generally accepted accounting principles, which prohibit companies from treating data as an asset or counting money spent collecting and analyzing the data as investments instead of costs."

You can reads the entire story here.
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