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Most Innovative Companies

Costco

The World's Most Innovative Companies 2016Warehouse shopping franchise Costco utilizes a membership-only model, which means it has loads of data on each of its customers: how often they shop, what they purchase, whether they're likely to take advantage of a coupon or a promotion, and personal information like phone numbers and email addresses. The wholesale titan applies this data to its marketing efforts, of course, but it puts it to work in more admirable ways, too. When vendors announce product recalls, Costco can quickly compile a list of customers who purchased the contaminated product and contact them--a tactic that is more likely to reach the consumer than, say, just posting a sign behind the checkout counter. The company also tracks the success of these recall notices, helping it further improve its process. In addition to these efforts, which could prove life-saving in the case of deadly bacteria outbreaks, the warehouse behemoth leans on big data to help itself save money: It has installed sensors in more than 50 of its buildings in North America, using algorithms to monitor water usage in real-time and alert the company when unusual activity could signal a leak or a breakdown. The system, created by a startup called Apana, has helped Costco reduce its water use by an average of 22%, and saves thousands of dollars at each building every year--a result that will make both environmentalists and executives happy.
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