Anderson: Davis startup helps shoppers make deals on their groceries
10/15/2013 12:00 AM
10/14/2013 8:36 PM
When Kenneth Ouimet sets out to explain the purpose of ShoppingScout.com, his explanation is so simple: It will help people save time, save money and live better by telling them exactly where they can find the lowest prices on groceries they want to buy.
“We’re seeing our shoppers save 20 to 40 percent on their budget,” Ouimet said. “This is huge for a family of four living on $50,000 a year. What they’re spending in the supermarket tends to be one of their biggest expenses, about $7,000 a year. We want to help them save up to $2,000 on that with a free app.”
That math is easy enough, but Ouimet’s application depends upon advanced concepts such as probability theory, supply-chain economics and the next generation of the World Wide Web.
You see, the work of ShoppingScout.com begins with the shopper, but Ouimet promises that it will end with big data that will answer age-old questions for both retailers and manufacturers.
As consumers use ShoppingScout.com, it learns their preferences and becomes a personalized shopper. That’s what Internet experts say consumers will want as part of Web 3.0. At the same time that ShoppingScout.com is working on behalf of shoppers, Ouimet said, its algorithms are finding answers to such complex questions as: How does price influence consumer choice? What attributes do shoppers want in products? How much product should manufacturers supply?
“If you decide to go from some conventional product to a sustainable product, the manufacturer of the conventional product doesn’t know that,” Ouimet said. “There’s nobody counting that you switched and that you switched because you’re looking for something sustainable, so we’re measuring that and we’re helping to communicate that back so the manufacturing community sees that there’s a demand.”
ShoppingScout.com will make its money by supplying data that grocers and manufacturers want. Eventually, Ouimet said, ShoppingScout.com will negotiate personalized coupons for each consumer.
Putting theory to work
If Kenneth Ouimet’s name sounds familiar, then you’ve probably been in the Sacramento region for at least 15 years. Ouimet and his younger brother Timothy Ouimet launched KhiMetrics here back in 1997 to predict consumer response to how products are priced.
The two Del Campo High School graduates needed a cash infusion, though, to take their business to the next level, and venture capitalists would supply it only if they moved their headquarters to Scottsdale, Ariz.
“It was really sad that we had to leave Sacramento to get financing,” Kenneth Ouimet said. “We ended up going to Arizona. We did very well. It was one of the fastest-growing companies. We were in Inc. magazine’s fastest-growing companies two years in a row.”
The duo became multimillionaires after selling their company to the German multinational SAP in 2006 for what is believed to be hundreds of millions of dollars. It was validation for Kenneth Ouimet, who left the University of California, Santa Barbara, to start the company three months away from earning his doctorate in theoretical physics and engineering. He stayed on with SAP as head scientist for two years after the sale.
“We were working with retailers, and we really revolutionized how retailers set prices,” the elder Ouimet said. “We did a lot of mathematical modeling, and what that was doing was making pricing become much more dynamic, and we realized consumers needed tools to help them purchase as pricing was becoming more dynamic.”
They had launched their new company, Engage3, in San Francisco, but Kenneth Ouimet, the company’s chief executive officer, recently moved his family and the headquarters to Davis. His younger brother still lives in Arizona but commutes here for about a week each month. They have used their money to bankroll Engage3 so far, but they expect to look for venture capital starting next year.
Chips off the blocks
You might wonder how Kenneth and Timothy Ouimet ended up developing price optimization software in the first place.
Well, it all goes back to their parents, Roger and Colleen Ouimet.
“Our parents started a company in 1973, and … it was doing competitive price comparisons for the retail industry,” said Timothy Ouimet. “… We were effectively born into a company that was interfacing with the pricing departments of retailers, and most retailers wouldn’t admit that they even had a pricing department.”
Colleen Ouimet said her sons started working in the family business at the age of 7 or 8, running up and down aisles to fill in the prices of various products tracked by their company, Comparative Prices International. The business got its start in Canada, where the Ouimets lived when they were first married, but they continued doing it when they moved to Citrus Heights.
“We had them doing statistics on the surveys we’d done in stores in Canada,” Colleen Ouimet. “We did what we called an index report of products across time and across the stores.”
In summer, Roger Ouimet would take Kenneth along with him on summer trips across the country. Nothing was online in those days, and they had to type up every report. The Ouimet boys recall talking about grocery store prices and reports over the dinner table, and when they got older, they decided to continue their parents’ work. Their father has retired, but their mother works on ShoppingScout.com at the boys’ Engage3 business.
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