A start-up that's trying to help people get lower prices on their groceries is fighting an uphill battle against grocers but has found a way around them with crowd-sourcing.
Josh LowensohnFormer Senior Writer
Josh Lowensohn joined CNET in 2006 and now covers Apple. Before that, Josh wrote about everything from new Web start-ups, to remote-controlled robots that watch your house. Prior to joining CNET, Josh covered breaking video game news, as well as reviewing game software. His current console favorite is the Xbox 360.
Grocery comparison site Grocio is inching closer to a public launch. On Monday it opened up its doors to beta users in Tulsa, Okla.
The site, which helps people comparison shop for goods at local grocery stores, is still a long ways from being available nationwide. Its methodology, though, is sound. Each week founder Gerald Buckley sends out scans of the latest grocery circulars--yes, the ones that turn Sunday's paper into a phonebook-size behemoth, to Amazon's Mechanical Turk. Once there, they're transcribed into text files that Grocio's search engine can use to do its magic.
The whole process takes about two hours. After which, users can see how much the items on their grocery list would cost, then pick out the lowest-priced store--complete with any coupons that they'd need to print out and bring with them.
Getting that pricing and coupon information from the circulars is not exactly the fastest or most cost-effective method, but so far it's been one of the only ways to play. Buckley says that since its launch, grocers have perceived Grocio one of two ways: some have gladly handed over the latest pricing information, while others look at the service as a threat--something that could chase away potential customers.
Despite the fact that most shoppers aren't likely to go across town to pick up the other half of their shopping list, some grocers worry that Grocio's system means they won't come at all if they're getting an all-around better price elsewhere.
Part of Buckley's strategy at winning both sides has been to start low, and to play them off each other. He's gunned for the "value-leaders," or stores that are running big sales on what they're selling. Getting these stores into the system means shoppers will have to compare those prices to the higher-margin competition, who in turn have to step it up to get noticed.
To augment that, last month Buckley introduced a widget that takes some of the information he's been harvesting and puts it out there for users to browse coupons and create shopping lists. This puts all of the grocers' coupons online, where they're more easily accessible to potential customers who don't subscribe to a local paper where they'd usually see them. It can also be placed outside of Grocio's site and into places like Pageflakes, Netvibes, and on blogs.
One of the site's biggest hurdles may continue to be that it's a digital solution in an analog market, and that the conversion of that data could never be fast, or accurate enough to keep pace. Between that, and the hundreds of thousands of price localizations and differences, it's a very tough data set to keep current. Whereas many coupon sites have flourished with national pricing deals for a single product like a digital camera, there are hundreds of brands of butter with prices that fluctuate wildly depending on what time of year it is, and where it's being sold.
The one way to get around that is with participation from the grocers, which Buckley continues to fight for.
The site may also face an uphill battle against consumers who just don't shop the way the site wants them to. While shopping lists work--and work well, people don't always stick to them, and can (and often do) make impulsive purchases. Preparation may save a few bucks, but the key for grabbing the attention of this, and future generations of shoppers may be letting them know of deals once they're at the store in a way that grocers haven't been able to nail.