Right now, says Ellwood - who knows a thing or two about Waze having previously worked there as senior director of business development – companies can pay firms such as IRI and Nielsen for pricing data, but it’s typically a month out of date, doesn’t cover many independent retailers or those who don’t supply data to third parties, and is "anonymized and repackaged."
“At Basket, we can tell you what the price of your brand and competitive products is in this particular store in this particular street in Thousand Oaks, yesterday,” explains Ellwood, who cofounded Basket in 2014 with serial entrepreneur and data science expert Neil Kataria, launched the app in 2016, and has since raised $18m to help develop the platform.
“So typically if you were buying that data it would be averaged out by region – so you'd get the average price for this product in Walmart in southern California, for example.
“We also have data from what I call black box stores that are independents and don’t share pricing data, or large chains such as Trader Joe’s that don’t share their data with everyone, and chains that share data with one provider but not the other, or don’t allow their data to be shared directly [eg. H.E.B – which supplies data to help provide accurate total market info but won’t allow it to be sold separately]."
Brands are desperate for data
He added: “When we first started looking at this I was amazed to see how desperate some brands were for data [for example to check retail compliance with a promo campaign]; they were paying interns to cold call stores pretending to be shoppers asking for price and product information... Do you have this product? That’s great, how much is it? Great. I’ll be there shortly! And then they’re entering this into a spreadsheet.”
Basket is also collecting real-time out of stock data via the app, which is something that could develop into a useful service for Basket's industry partners in areas where data is hard to come by, he said. “You could get an alert if your products are out of stock in certain stores.
“We launched our insights tool late last year and we’ve already had a lot of interest. We see a huge opportunity here.”
But how comprehensive is the data on Basket, and what motivates the thousands of shoppers who use it to contribute?
For a start, clarifies Ellwood, Basket is most interested in monitoring the prices of a core of products that are on consumers’ shopping lists week in, week out (Tide, Diet Coke, Folgers, Cheerios). It is less concerned with tracking the price of obscure seasonal candy collections, impulse purchases, or the long tail of products that you might buy now and again but are not necessarily on your weekly shopping list – which for many consumers remains remarkably consistent, he says (we’re creatures of habit).
By using artificial intelligence to track patterns from the past five years of data, Basket has also been able to predict which products and categories are most susceptible to price fluctuations and when, and direct its army of shoppers to focus on these items. “So we know that the price of frozen food changes less frequently than soft drinks.”
Specifically, while Basket has a user base of more than 800,000 shoppers, who have downloaded the app, around 100,000 of these actively confirm or update prices on a regular basis in all 50 states and the top 100 metro areas. It then works with 1,000-3,000 'commerce moderators' across the country any given month who are paid to proactively update pricing of specific items to ensure Basket has comprehensive, up to date information.
‘No one wants to overpay’
But is this information on Basket really prompting shoppers to change their behavior, given the multitude of other factors at play when it comes to deciding where and when to do your food shopping, such as availability of must-have items, store location and so on?
You’d be surprised, says Ellwood, who notes that while you can already compare prices of individual items via some grocers’ online shopping apps if you can be bothered to search them all (and then take into account that the online price and the price in the store aren’t always the same), Basket allows you to compare prices of your entire shopping list.
This means that before you leave work, you can compare price and availability for that basket of goods in say five different stores that are all on your route home (if a store doesn’t have the exact item, Basket surfaces a comparable brand or private label alternative for you to look at).
And in areas well served by grocery stores, that information may well determine whether you turn right or left at that junction, and which retailer gets your business that day, he said. “If there’s a half-price deal on your 24-pack of Diet Coke – that might sway you. Or if you learn that the store you usually visit is out of a particular brand of cereal that all your kids eat.”
An end to ‘dumb’ shopping lists
If you think about it, he says, “If I want to book a hotelroom or a car I can go online and in moments I can get the best deal locally, or find a way to avoid traffic, whereas if I want to buy a basket of groceries, my shopping list is about as useful as a printed off map. It’s a dumb list, it’s not tied to real time pricing or inventory information. You just hope what you want is there at a good price.
"We wanted to create a smart shopping list that was so useful to people that they feel it’s worth their while to contribute information to make it smarter.
“What surprised us when we started was how much prices changed, and how much variation there was for the same shopping basket between different retailers, sometimes 30-40%, which on a big shopping trip can make a huge difference.”
It doesn’t matter how much you earn, he added. “No one wants to overpay.”