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[20 comments]

Shop & Stop and Giant Put Scanners in Shoppers' Hands

May 7, 2009

By George Anderson

Stop & Shop and Giant Food have added handheld scanners at 250 stores to help consumers track the cost of their purchases as they shop while also providing them relevant coupons and promotions on items throughout the store.

The devices branded as "Scan It!" were introduced in stores going back to last fall. The scanners, which were developed by Modiv Media and Motorola, are being used on roughly one million shopping trips per month between the two chains.

To make use of the system, customers use their loyalty card to pick up a scanner as they enter the store. The device presents them with exclusive offers based on their purchase history and current shopping behavior. Shoppers are presented money-saving coupons as they near promoted items located throughout the store. As customers pick up items, they scan them and bag them in the cart. Purchases are totaled as they go, helping to speed the checkout process.

"One of our key goals at Stop & Shop is to increase customer loyalty," said Bob Anderson, director of customer relationship management at Stop & Shop, said in a press release. "Scan It! allows Stop & Shop to differentiate itself from the competition, by producing a superior shopping experience that results in increased savings for our customers."

"We had customers ask for it," Bob Bennett, director of front-end operations and customer service for Giant Food, told The Washington Post. "Customers have wanted another self-checkout type solution."

Food Lion and Bloom also make use of handheld scanners in some of their stores.

Discussion Questions: What do you see as the biggest potential benefit to be gained from the use of handheld scanners in retail stores? How can these devices and supporting programs best be used to provide an improved customer experience?

Discussion Questions:

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How big of an effect will handheld scanners have on a retailer's ability to differentiate in today's market?

Comments:

I can foresee benefits for all parties involved--the customer, the retailer, and the manufacturer. The customer gets discounts on items that they frequently purchase; the retailers gain "impulse" sales, faster checkout, and a differentiated shopping experience; and the manufacturers increase their unit movement.

Depending on the sophistication of the programming, such a devise might be able to track the customer purchased certain items every X shops and remind them to do so on this trip as the get near the category.

A potential downside for the retailer is pantry loading at the sale/coupon price lessening the likelihood the item will be purchased at full retail.

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Steve Montgomery, President, b2b Solutions, LLC

I see the possibility of an entirely new dynamic in shopping behavior. Currently as shoppers pick up products in the store, they are making independent purchase decisions. Do I need? Do I want? ...Salad dressing, snacks, a new cereal for the kids? The environment for making that decision is the display, the packaging, the price, and perhaps a list written at home.

Add the scanner and consumers have one more component influencing the purchase decision. And that is the running total on the scanner.

"I'm up to $96.00. Maybe I'll wait for another time to pick up the new cereal." "Oops, this tally is getting higher and higher faster and faster. Let me take another look at the private label salad dressing."

Consumers have had devices that allowed them to keep track of their purchases. Usage has not been prevalent. The Stop & Shop and Giant scanning device is a desirable service and convenience. It is also potentially a major influence on new patterns of shopping behavior.

It will be an added value for the shopper and undoubtedly engender loyalty to the store. The ramifications for the revenue stream realized by the retailer and the brands in the store will be very interesting to monitor.

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Joan Treistman, President, The Treistman Group LLC

I agree with Steven: I think the hand scanner finally overcomes some of the issues of other in store technologies in that it provides visible benefits (deals, coupons, offers) to the shopper as they shop. A lot of other programs either require a separate stop on the way in or don't give benefits until the consumer is on the way out the door. I like the integrated shopping aspect--although as a shopper, I'm frightened by the prospect of people being even more distracted as they walk down the aisles heads buried in another machine!

There's real opportunity to enhance and streamline the shopping experience--but retailers shouldn't forget the basics of customer centricity--available friendly staff, clean wide aisles, properly curated selections--the technology is great but it needs to enhance, not replace human efforts.

Lisa Bradner, principal analyst, Forrester Research

I shop at Ralph's here in LA, using a loyalty card, and they are obviously keeping track of all purchases. I just got a bunch of coupons in the mail for a list of items I purchase regularly. Recently, to promote a particular (remodeled) store, they sent three or four coupons (with specific use dates) for $10 off on a minimum $25 spent shopping (in that store only). You can bet I am a loyal customer.

The idea of having a hand-held scanner and getting coupons right in the store as I am buying sounds even more appealing. And as a retail analyst and consultant, of course I approve of the customization aspect. If loyalty and repeat (and increased) business is the goal (and it should be), then this seems a promising path.

Roger Selbert, Ph.D., Editor & Publisher, Integrated Retailing

The next generation of cell phones, or the one after that, will have the ability to "read" barcodes, making this technology superfluous.

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Ron Margulis, Managing Director, RAM Communications

Marketers have long known the value of speaking to shoppers directly at the point of decision. On-pack coupons and neck hangers, the SmartSource Coupon Machine and similar devices, and even CBS Outernet and other in-store media attempt to influence at the "point of decision."

The power of Modiv's SCAN IT!, besides reducing a store's checkout costs, is that it can deliver personalized messages. Imagine two shoppers both receiving a promotion for the same product, but with different messages and face values tailored towards their preferences and past behavior. The hand-held technology makes this possible, but the challenge will be managing the tremendous number of combinations and permutations of offers without overwhelming marketers, brand managers, and category managers. In contrast with online advertising systems like Google's AdWords, current promotion management tools in grocery are sorely lacking in this regard.

On the flip side, brands will need to weigh the time and effort required to set up a promotion with the actual number of shoppers reachable through the SCAN IT! touch-point. Unscientifically, I have observed about 10% usage at Boston-area Stop & Shop stores, and sometimes much less.

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Ben Sprecher, Business Development, Google

The major consumer benefit will ultimately be a further reduction of the need to interact with those annoying, time-wasting humans in the store at the checkout. And, if it works correctly, will be even less frustrating than the scanner that continually needs a "cashier approval" for over twenty one items and such. The key is in how those approval and payment processes are streamlined as a result of the scanner itself.

A short-term risk Joan pointed out is that consumers will use the devices to gate their purchasing due to the immediate feedback--but that will be short-lived as well. We will ultimately revert to buying what we want when we want it.

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Ben Ball, Senior Vice President, Dechert-Hampe

This will be attractive to a certain demographic. The younger, tech oriented consumer will love this feature and won't be overwhelmed at it. So the young Mommy's will benefit. It depends on the demo that the retailer is going after whether this is beneficial. The Hispanic, lower income, aging demos would not benefit from this feature.

Susan Rider, President, Rider and Associates, LLC

Aren't customers already multi-tasking enough? Call me old school but I don't want to carry around an item and do the job of a merchant. Plus with Microsoft's new Tag Reader, not sure this is that "cutting edge."

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Bob Phibbs, President/CEO, The Retail Doctor

This biggest benefit I see so far is that it makes for a good press release for a struggling retailer. I wonder why the more successful, privately-held grocers are not rolling this out? I don't have to wonder, I know why. Generally we see companies moving towards more self-checkout solutions when they can't find qualified employees to enhance the exit experience. Often the last impression a customer has is at the checkout so when you have employees fouling up this experience, then it's time to use machines.

David Livingston, Principal, DJL Research

Stop & Shop and Modiv are on the cutting edge of the implementation of the internet in the aisles of the supermarkets, and this is a phenomena that WILL transform retailing. In this case it is a handheld device provided by the retailer, and replaces the earlier cart mounted device that Stop & Shop had been working with for several years.

IRI was here first with VideoCart, which was an excellent initiative, but about 20 years too soon. Quite a few efforts in this direction have crashed and burned, including Safeway's Magellan. MediaCart has an outstanding cart mounted device, much more powerful than the Modiv device, which has been successfully piloted, with a new generation moving into global roll-outs.

But Modiv has the longest continuous development effort, and are deployed in the workaday retail stores, well beyond pilot testing.

What makes all of this work is that something like 80% of a shopper's time is wasted in the store, largely lost in moving somewhat aimlessly around the store (or maybe "aimed" at hidden or indeterminate targets.) Anything allowing retailers and brands to make context-sensitive OFFERS to shoppers during this wasted time, allows additional sales to accrue intelligently, turning wasted time into productive time for shoppers, retailers and the brands.

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Adjunct Senior Fellow, Ehrenberg-Bass Institute

As someone who's been using these scanners at Giant since they started the trial, I think you're overblowing the promotional aspects. Sure, some people are paying attention when it beeps an offer. Most of us scan, put it down and only look at the display to make sure we've scanned the item correctly.

Among my cohort of friends, we like the scanners for one reason only: a little bit more work up front, but it means that when we're done shopping, we're done. Enter our number at the checkout stand, pay, and we're gone. No unloading the cart, valiantly trying to get the scanner screens to read the product. No more having to bag our groceries before the next person sends a big box of detergent sailing down the ramp to squish our bread and tomatoes. Pay and go. Emphasis on GO.

Whether the time up front scanning and packing is less than the time we'd spend at the end, unloading, scanning and packing, it almost immaterial. Once you've selected your purchases, it just feels so good to get the heck out of there, instead of having to engage in a whole different activity. I will drive out of my way to go to the branch that has the scanners.

'MEriksen'

Hand-held scanners cut down on total shopping time (by eliminating checkout), and they make use of wasted time by making offers via the hand-held. Its a win-win for both shoppers and retailers. I discussed this further here-->

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David Dorf, Sr. Director of Technology Strategy, Oracle Retail

There are a lot of positives as mentioned, but there are a few downsides. One thing I believe is happening is the further deterioration of the 'shopping experience'. Some would entirely disagree with that for sure, as they see it as an enhancement. Yet, I think that it's a distraction yet again to the overall experience.

Certainly, it's a vehicle to make offers. Certainly it's a vehicle to track purchases. Certainly it's a vehicle to assist at checkout. All good stuff. It's also a vehicle to help the consumer track the amount that they are spending. That may be a good thing for the customer, but does that help sales? Is the value to the consumer greater than the retailer's need to increase sales? Sales are generated by 'the experience of merchandising'.

I am just not so sure if we really need one more electronic device in our hands to distract us yet again from what we are doing at the time. Certainly it can be said that we are never doing just one thing at a time any more; so what's the difference? The difference is that if we can actually get the customer to experience shopping, they might actually buy more of what we are selling.

'Scanner'

Thanks for Merikson's comments who has had first hand experience with these devices. Anything to improve the shopping experience is a good thing. Gets you out of the store quicker, keeps track of what's in the basket with total cost, and is likely more environmentally friendly as these people would likely bag their groceries in recyclable bags as they are shopping - not to mention better loyalty offers.

Everything I have read on this has shown customers like it, and that's what counts most. It certainly is not for everyone and doesn't have to be. It's got to be way simpler than some of the wacky self-checkout devices currently being used. Perfect RFID execution with screen on cart would be much better implementation of this, but I don't think we will see that for a looooong time. I would love to try this first-hand.

Rick Boretsky, Retail Data Integration Specialist, RIBA Retail (www.ribaretail.com)

The biggest potential benefit is hard to determine. There are way too many. This is a game changing technology for the grocery retailer. Those retailers that adopt this will surely be winners. And, don't fret the hardware...the value is in the software. Yes, it will eventually work on cell phones, but the real kick is the connection to the retailer.

Products merchandised on this device will unquestionably sell more product efficiently than any tool used in the supermarket today. Consider, what would move more Pepsi? Displays with $2.00 off a 12-pack or a message of $4.00 off a 12-pack on the Coke buyer's device and $1.00 off on the Pepsi buyer's device?

And consider the next generation of application. With an account connected to their favorite retailer, a shopper randomly adds to a shopping list in between trips. When the shopper gets to the store and logs in, the shopping list pops up with the items in an order that would take the shopper efficiently through the store.

In marketing, segmentation will soon be out the window as the ability to execute personal marketing grows. Similarly, the more retailing connects with the individual shopper rather than the broad marketplace the more successful it they will be.

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Gene Detroyer, Professor, Independent

There's a HUGE potential benefit here -- changing the behavior of young men.

Grocery shopping is detail-oriented and tedious, and largely the responsibility of women. Put an electronic device in a man's hand, particularly a young man, and watch him offer to do the shopping. Increasing the number of people who are willing to come to the store means that sales can increase. It would be really interesting to monitor the pilot stores to see if the customer mix changes.

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Cathy Hotka, Principal, Cathy Hotka & Associates

Hey! Enable cellphones using downloaded datum as handheld scanners. What, you didn't know this is already being done? Anyone with the technical ability to twitter gets this concept, and there's millions of 'em (you could look it up.) Retailer provision of handheld scanners falls into the category of "too little, too late." Instead, they should tap into their customers' insatiable cellphone addiction to meet this (still-to-be-proven) need. Instead of in-store stations to recharge handheld scanners, they should install stations to recharge every brand of cellphone. And, retailers should offer any cellphone scanner software updates available for downloading on their websites. Check the marketplace--there are any number of cellphone platforms converted to barcode scanners.

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

It demonstrates a level of consciousness and responsiveness to customers' needs: times are challenging, budgets are tight, and many shoppers need to stay within their means, only buying what they came in for. They don't want to be embarrassed or shocked when the total is rung up at the cash register (sorry for the ancient symbolism but it still works). The store hope is that customers will remember this when they don't have to worry so much. The other thing to do may be to remove candy at the checkouts to keep kids and adults from adding on that little extra item to a shopping trip.

I think it is a great move. Of course it also is convenient.

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Jerry Gelsomino, Principal, FutureBest

Scanning on cell phones; very interesting. The main difference is that the cell phone is not connected to retailer item files like the handheld device from Modiv. I'm not sure how the two link up.

'MrQScan'

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