North America, 1988
North America Council, 1988: Much has been written about the soft or informational benefits of scanning, and, by 1988, in many industries, from financial services to air transport, information was being used as a strategic tool. Yet, at that time, the question still remained: could a grocer gain a competitive advantage through the better use of scan data? Scan applications did not appear to have the potential of adding more stores, remodeling existing stores, or making other types of investments.
This limited the commitment of significant resources. This study established that an investment in scanning could actually produce a competitive advantage with savings that could easily exceed twice those typically realized from hard benefits.
How can scanning data applications provide a competitive advantage? The answer is that the effective use of scan data can lead to:
- Greater sales per square foot through improved space management;
- Higher margins and greater store traffic through better pricing, promotions, displays and advertising;
- Lower inventory investment through better reorder decisions, and
- Lower labor costs through automated reordering.
Perhaps more importantly, effective scanning applications are difficult for competitors to imitate because of their complexity. New store formats, changes in prices and new departments are easily imitated by competitors. In contrast, a competitor cannot readily copy scan data applications, so the advantage will be longer lasting.