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FreshDirect started out in Manhattan in 2002. When it decided to expand its operations, it has a lot of options. What made it select Philadelphia as its next target market?

????????????????????????????The answer is more complicated and detailed than you might expect. Philadelphia is another urban market, relatively close to its current New York operations. But FreshDirect instead focuses on the ways the two markets are different. In defining these differences, it relies on in-depth, constant, and detailed data analysis, achieved through close cooperation with the analytics firm SAS.

By using data analytics so extensively, FreshDirect aims to predict consumers’ shopping patterns in various locations. Then it can develop solutions that meet their detailed needs. For example, many shoppers in New York and Philadelphia spend extended time in the summer at beach houses at the Jersey shore or in the Hamptons. Accordingly, FreshDirect anticipates the need for an expanded delivery area during those months, such that customers never have to lack access to the service.

The element that sets its use of data analytics apart from the uses displayed by other retailers, according to FreshDirect, is its dedication to looking forward rather than back. It is easy, says Aaron Cano, the vice president of marketing planning, to count how many berries a shopper bought last month using analytics. But FreshDirect is dedicated to doing more than that, including determining which kinds of berries the consumer bought during which week, so that it can work more closely with farmers and vendors to ensure the proper proportion of berries at each moment.

Discussion Question:

How did FreshDirect decide to start its operations in Philadelphia?

SOURCE: Sandy Smith, “Applying Data to Decisions,” Stores, January 5, 2015, https://nrf.com/connect-us/stores-magazine

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