What do your receipts say?

[amrutraj]

Hi, I have built a software to use our shopping data to educate ourselves, rather than educating MNCs to model their next marketing campaign. No spam here. Not going to post a link or anything.

Here is my big idea,

"Every financial decision, from shopping for cherries to buying a 16/64GB iPhone, from deciding on a cruise to Alaska, to deciding on your sons college, can be made stronger by analyzing your previous receipts."
(or rather by looking at a computer generated summary.)

Hypothetically, if you have a complete categorized record of all of your spending (kinda like expensify / onereceipt etc.), how can you use that to increase your spending prowess?


Here is a though experiment.


Suppose you get your digital receipts (a spreadsheet with all the items and prices from your cart) along with your paper receipts. How would you use it to save money? What would you like to know from it? I would like to

1. know the prices over time, of regular items that I bought, from all the nearby grocery stores.
2. anonymously share that info online, so that friends in my neighborhood too can analyze the prices.
3. There are some items that have huge profit margins for the shops, so are often with ridiculous discounts. I would like to know about those discounts (maybe from other people who shopped there)

I would love to discuss with tightwads, who want (and are excited) to model their spending habits, risk appetite, impulsive buying patterns, materialistic happiness and other funky metrics.


My OCR software digitizes printed receipts and categorizes them, and makes graphs across various dimensions. (I dont think I can post a screenshot unless I have made 15 posts.) I have completed the private BETA test with my friends and family. But I am not here to promote my software, but rather learn from you.
PS I have worked with an online retail MNC, and its amazing how much one can know just by knowing the items in a persons shopping cart. I want to let consumers know about themselves, at least as much as MNCs know about them.

[disneysteve]

I'll give you the benefit of the doubt for the moment that this isn't going to turn into spam (although I'm not so sure).

I think some of what you said makes perfect sense, such as tracking what certain items you buy regularly cost. In "The Tightwad Gazette", the author shows you how to do a low tech version of that in the form of a price book where you record prices in your area. Then you can recognize a good sale and take advantage of it. Today with the internet and forums like this, that information could easily be scaled up to a searchable database so that I could easily check, for example, who has the best price on Tropicana orange juice this week.

Now I have no idea how that would help me get a good price on a cruise to Alaska or how it would impact my daughter's choice of colleges. That's where you lost me.

[amrutraj]

Correlations.

There is something called customer lifetime value (or Customer value for short). However rude it sounds, a very helpful metric for retailers neverthless. It kinda tells how much a customer is going to respond to a certain incentive (value of product), in a nice mathematical way. Now taking the previous example of cruise and college selection,

I meant that, having a detailed financial model of a family, can help deciding on a cruise AND deciding on college education.

But your point is still valid, and insights from your cruise selection can be used for selecting college education.

Suppose you did some research and took a cruise that costs much less than average price, but also has a a bit lower reviews due to not so great service. You decided that the cruise itself is important and your would rather not spend extra for other cruises that have better service since you are gonna "spend time chatting with your family anyway." Now a very important insight Orbitz gets is that "you are more likely to respond to an offer on reduction on price, instead of upgradation offer to the conceirge service." They also get the exact metrics about your inclination towards various aspects of a product (brand, product features, looks, after sales service etc.) THESE ARE THE EXACT METRICS THAT I AM TALKING ABOUT. Because you already know that you are a thrifty guy, but to use this insight into everyday automation, you need a number, or a mathematical function.

Now everyone knows that there many colleges that have almost the same quality of education in one particular branch or another, industrial scope, safety etc. but are massively different in tuition fees. I am from USC and I went there because I valued the exuberant culture and networking with the industrialists, and was willing to pay for it. Some parents might not. Due to weird rating system of USNews its almost impossible to select a college without doing detailed research of princeton review and others. I am not saying that some software will analyze everything about all colleges, and will find out at which college you will be able to maintain your creativity, standard of living, expectations, get good education etc. But human mind can't, especially while taking life altering decisions decisions, process all the information about itself and the world. (In last minute panick I almost selected arizona state because they were offering TA and USC wasn't.). I strongly believe that having a computer do the number crunching and showing us very basic scenarios, call them simulations if you will, can help us think in different ways. It can be like having a very informed college advisor with us who also knows about our dreams, fears and expectations.

I really hope I made it clearer than it was before, but if not, please ask away.

UPDATE: reply to, " a price book where you record prices in your area."
The problem that I have faced while working at my previous job creating diagnosis assistant for doctors, was, patient thought it was too cumbersome to enter the date + the prescription medicine they took, in to a spreadsheet. I think we have almost equal regard for our long term financial well being, as for our long term physical well being. Thats why I said, what if we can get complete itemized digital bill, sent to our account, along with the paper bill!

[disneysteve]

But your point is still valid, and insights from your cruise selection can be used for selecting college education.

Suppose you did some research and took a cruise that costs much less than average price, but also has a a bit lower reviews due to not so great service. You decided that the cruise itself is important and your would rather not spend extra for other cruises that have better service since you are gonna "spend time chatting with your family anyway." Now a very important insight Orbitz gets is that "you are more likely to respond to an offer on reduction on price, instead of upgradation offer to the conceirge service." They also get the exact metrics about your inclination towards various aspects of a product (brand, product features, looks, after sales service etc.) THESE ARE THE EXACT METRICS THAT I AM TALKING ABOUT. Because you already know that you are a thrifty guy, but to use this insight into everyday automation, you need a number, or a mathematical function.

Now everyone knows that there many colleges that have almost the same quality of education in one particular branch or another, industrial scope, safety etc. but are massively different in tuition fees. I am from USC and I went there because I valued the exuberant culture and networking with the industrialists, and was willing to pay for it. Some parents might not.

That all makes sense in general. I do think, however, that completely different types of purchases (like a cruise and a college education) are so unrelated that how I shop for one won't really influence how I shop for the other. To stay with the cruise/college example, we are pretty thrifty when traveling, something we love to do. My wife and I thought long and hard when booking our last cruise before deciding on a balcony cabin, something we hadn't done on our previous cruises. It was hundreds of dollars extra and we weren't sure it was worth it. Once on the cruise, we only did one upcharge restaurant and only because it was our anniversary. Otherwise we would have done the included dining every night. So generally pretty budget-minded.

We are currently in the college search process. Despite our frugal nature, cost is barely a factor at all in the process. Far more important is if we all feel the school will be a good fit for our daughter. I don't care if that costs 20K/year or 50K/year. the bargain school is worthless if she isn't happy there. And the 50K school isn't worth the added cost if she doesn't like it. This is a decision where cost really doesn't influence the outcome. Certainly, in lots of other purchase decisions, cost is absolutely a factor.

[amrutraj]

Wow you reply fast. Thanks.
I admit that the college comparison was not a very well correlated with the cruise. And even in real life your choices about cruise per se, wont affect your college choices much. But you see, its the other choices, like did she go to a summer camp? or some skill camp! or how much did you spend on extracurr compared to the average of your income group. (Paid not necessarily in money, but in time and efforts). Thats where current marketers are going now, and it would have seemed batsh!t loony a decade ago, but now its commonplace in google adwords algorithm. That information and the right to loan it, MUST be made available to the end users.

I sometimes get carried away when there is a talk of correlation and causality. But thanks for sticking. I do have a few specific questions for you though.

1. What is the chance that you will upload your receipts without any personal information to an unknown company's portal (website/ web app) even if the benefits are immediate? I mean, it can be (as is always) used against you too. e.g. If demand is known, prices can be increased by deliberately restricting the supply. If amazon knows that you have to buy some stuff at X$ but the seller is happy selling it for (X-2)$, they will sell it to you for X$ and for X-2$ to somebody else. Its a very powerful business model.

2. If your purchase info is anonymously, immediately made available to the world, so others can also instantly benefit from it, would you be concerned that you wont get those benefits for longer, even though you worked for it? e.g. You buy 1 lb of apples for a ridiculous 1$ and now instantly everyone in your neighborhood knows about the price drop, without the store marketing anything. But its very likely that those apples will be sold out and you wont get the same price tomorrow. No good deed goes unpunished, you guess?

These are the two, absolute major concerns I am going to face, just like in the case of the diagnosis assistant. But that time we had the doctors to vouch for our integrity. Now it seems unless you spend insane billions like Groupon, its hard to establish a give and take platform, for really valuable anonymous information.

[disneysteve]

Wow you reply fast. Thanks.

I'm on here way too often, as my post count will attest to.

1. What is the chance that you will upload your receipts without any personal information to an unknown company's portal (website/ web app) even if the benefits are immediate? I mean, it can be (as is always) used against you too. e.g. If demand is known, prices can be increased by deliberately restricting the supply. If amazon knows that you have to buy some stuff at X$ but the seller is happy selling it for (X-2)$, they will sell it to you for X$ and for X-2$ to somebody else. Its a very powerful business model.

There are already examples of this in use today, particularly online. If you are at a website and do a search, when you come back to the site and do the same search again, you'll get the same results - unless you clear cookies - in which case you may get different results.

2. If your purchase info is anonymously, immediately made available to the world, so others can also instantly benefit from it, would you be concerned that you wont get those benefits for longer, even though you worked for it? e.g. You buy 1 lb of apples for a ridiculous 1$ and now instantly everyone in your neighborhood knows about the price drop, without the store marketing anything. But its very likely that those apples will be sold out and you wont get the same price tomorrow. No good deed goes unpunished, you guess?

That is a valid concern. If I share a great deal with the world, the deal may go away. I'd rather keep it to myself.

[amrutraj]

Yup. If you linger on amazon for long enough, you often see price drops in the items that you visited. Just a final push for an impulsive purchase

How about only your friends and family can benefit from your discounts, as long as they share some too. Kinda like torrenting with 1:1 ratio. You can only receive as much discount as you have shared?

But anyway, I have another question. Regarding independent small grocery stores. Once a huge opportunity for anybody to be an entrepreneur/self employed, now an impossibility due to high tech, highly dynamic pricing models.

If the small grocer offered the same competitive prices as the superstore, would you buy from them?
The only catch being that you would have to order 5-7 days earlier, so that they can buy in bulk or from farmers/manufacturers to reduce the prices.
Do you think the sense of community would triumph, the efforts needed to make a list of your purchases 5 days in advance? You might also save a lot of time, compared to superstores.

Kinda like an Amazon for local grocers?
e.g. What if all the resources of superstores that make them sell cheap, like, customer profiles, market demand, trending product info, farmers/manufacturers connections. etc, is made available to the small grocers. They will be able to replicate megastore model at a small scale without the need for warehouses, but at the cost of requiring customer demand a few days earlier, than the actual purchase.