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[23 comments]

Walmart's Scan & Go is a no-go

August 14, 2014

Speedier checkouts are a holy grail-like pursuit for many retailers, and Walmart is no exception. The retailer, which is not known for moving people quickly through the front-end of its stores, tested a mobile app that would allow people to scan items as they shopped and, in turn, use that data to speed the checkout process.

The reality, according to an Associated Press report, is that Walmart's "Scan & Go" app didn't past muster with its customers. Turns out Walmart shoppers in the 200 stores where the app was tested couldn't figure out how to use it. In the end, the retailer pulled the plug on its experiment.

The failure of Walmart's app is a knock against the use of consumers' mobile devices to scan items while shopping to move them more quickly through the checkout. Perhaps the perceived complexity of using an app on their mobile phones may be part of the reason that 41 percent of consumers, per CFI Group's Retail Satisfaction Barometer 2014, would prefer to use a device supplied by a retailer.

As previously reported on RetailWire, the Stop & Shop supermarket chain has been testing Scan-It! hand-held devices since 2007. Catalina Marketing, which provides the devices to the chain, reports that while 71 percent found the devices very helpful, only 15 percent of Stop & Shop customers regularly use them.

On the plus side for Walmart, Scan & Go was not a complete failure. According to AP, the retailer learned through the test that its customers like to be able to keep track of what they are spending. This insight led to the development of a program enabling Walmart's customers to store their electronic receipts.

Discussion Questions:

Why have programs such as Scan & Go and Scan-It! had trouble connecting with consumers? What have retailers learned from these and other mobile scanning tests and what will it mean for in-store shopping technology in the future?

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 likely is it that future programs using mobile devices to scan items before checkout will succeed?

Comments:

In spite of the relentless push to make customers do more when they go shopping by looking into the palm of their hands, this is indeed a knock. Especially since smartphone users are, by nature, much more savvy in adoption.

Bill Barr does a great riff on on all this, "Whoa, was I on the schedule today?" Whatever is being brought to market for retail customers must be an improvement, not another solution looking for a reason to exist.

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Bob Phibbs, President/CEO, The Retail Doctor

Not all consumers want to be early adopters of new technology, and while the Walmart test may have ended in failure, I'm sure the retail giant gleaned valuable information from the test. Look for retailers to continue testing until an acceptable outcome is reached.

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Max Goldberg, President, Max Goldberg & Associates

It seems more testing and research were necessary given the adoption problems. Assuming you get over that hurdle, then offering the option of adding greater value to the app via integration with loyalty point collection or similar should help as well.

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Gib Bassett, Global Program Director for Consumer Goods, Teradata Corp.

"The failure of Walmart's app is a knock against the use of consumers' mobile devices to scan items while shopping..." Sorry George, but I would never conclude that one or two failures out there are a "knock against" mobile check-out apps. I have not seen the Walmart app nor used Stop & Shop's device, but if neither are very good, that's likely a reflection of those particular deployments and the companies' failures to know their customers, provide value to their customers, educate them, encourage them (properly), adapt and iterate, and more. To imply that mobile check-out is a failure because Walmart got it wrong is in my view a very strong argument that third-party developers with better skills need to lead on these projects.

It's coming and it's going to happen, so the lessons for other retailers are to focus on consumer benefits, user experience and test/iterate until it really works for the shopper. And in the case of some market segments (likely Walmart's!) wait for your customer base to be psychologically ready and technically proficient enough to replace ingrained habits with new ones.

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

These can be complicated like self checkouts. What if the item doesn't scan? Coupons? Ad match? Just doesn't work? The customer feels stupid and frustrated. So why put yourself through it? Just let Ethel the cashier do it and let it be her problem.

David Livingston, Principal, DJL Research

I recently had the opportunity to try out Walmart's Scan & Go, but I did not discover this until I reached the checkout. And that, to me, is the number one issue with these technologies: consumer education. At the Walmart store I was at (a neighborhood store) there was no signage on the front or right inside that told me this store had Scan & Go. I have the Walmart app. There was no badge or alert on my phone. So I picked up my items, and then got to checkout to find—oh, yeah, I could've used my phone to scan.

I think retailers have two things going against them. One, immediate awareness (when a shopper walks in a store) and two, long term awareness that can lead to behavior change. In the end, that is what we are asking of shoppers: for them to shop in a different way. This is not a natural extension of their existing shopping behavior, not really. So it requires a large and sustained interruption in order to get their attention, and I have yet to see a retailer make that kind of awareness investment. Which is sad, considering how much retailers have invested in getting these technologies to market in the first place.

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Nikki Baird, Managing Partner, RSR Research

Customers don't cotton to adding more chores to their shopping trips. Retailers have learned little from these mobile scanning tests but they will continue experimenting. No retailer wants to be behind the curve on any new workable techie breakthrough.

What is not known today: Will in-store technology play a vital role in the future so long as so many "analog-trained" customers still roam the hallways of food land.

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Gene Hoffman, President/CEO, Corporate Strategies International

Let's accept that "technology is a wonderful thing—if it is used." Just because some form of technology is new, doesn't mean that it's going to be embraced by the masses, anymore than a "new" box of detergent is going to pop off the shelf merely because it's new.

Stop & Shop's experience may have some lessons. If only 15 percent of shoppers are using the Scan-It device regularly, some very basic questions to ask are: 1.) Does Catalina/Stop & Shop know who, demographically, these consumers are? 2.) Do they know the reasons that consumers use the device regularly? (speed, save time, remain within budget, early innovators of technology, etc.) 3.) The 15 percent of regular users have to make up the lions share of the 71 percent of the consumers who find it "very helpful." Can Stop & Shop get an acceptable ROI from this group of their customers?

Merchants have to continuously tweak their operations to find value and opportunity for their customers and themselves. At the same time, retailers have to encourage their operations teams to address the great thinker/management consultant, Peter Drucker's principle of "Find what you have to start, stop and sustain."

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Roger Saunders, Managing Director, Prosper Business Development

My only guess is it adds more work for the consumer as they shop. I tend to use the self-checkout lane, so would probably be inclined to use this, but I am not sure that I align with the majority of shoppers.

And based on this, "customers couldn't figure out how to work the Scan & Go app," it sounds like the primary issue was related to usability rather than ending this. Walmart might want to consider improving the app's design, as that could increase the usage rates.

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Bill Davis, Director, MB&G Consulting

A couple of lessons learned: 1.) Sometime technology is ahead of the customer, 2.) Customers need to be educated on usage as well as benefits.

This having been said, this was a test, with lessons learned. Scan & Go will not go away.

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

It is important to recognize that the objective is not just to speed the checkout process, but to improve the shopper experience and satisfaction. This can be lost in the rush to implement new technologies and reduce costs.

We have done extensive research at the checkout, including interviews with shoppers using the self checkouts and the scan-and-go type systems. Shoppers often require "training" on these systems to become comfortable. The self-checkouts have been around for a number of years and now represent about 40 percent of transactions where available.

It is important to note that no single checkout system will be favored by all shoppers for all shopping occasions. Customer satisfaction is maximized when each shopper can complete the checkout process in the manner they prefer.

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Raymond D. Jones, Managing Director, Dechert-Hampe & Co.

I've not tried the Walmart system but I did try Stop & Shop.

My experience is that they needed a new type of shopping cart, one that enabled putting the groceries directly into the bag as you shopped. When you got to the front end all you would have to do is weigh your variable-weight items.

It sounds like Walmart tried to let the customer use their own device. I bet most people only use five percent of a smartphone's features. The learning curve probably varied across devices.

The obvious answer to all this is RFID, but item-level RFID in the grocery department is still a long way off. The pick-up-at-store model is probably the most sensible answer. The really time-strapped consumer can go online, order their groceries, have someone else gather them and then show up at the store to pay and take them home.

More sophisticated scheduling and front-end management software can address the front-end capacity issues. Between better monitoring of queue lengths with video and the use of predictive software based on parking lot and cart activity, there is really no excuse for staffing shortages at the front end. I think Walmart could also address issues with a greater variety of lanes based on the number of items, so that customers could choose an appropriate lane.

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Bill Bittner, Principal, BWH Consulting

Customer adoption is driven by a couple things: 1.) Is it easy to use? 2.) Does it fulfill a need for the customer (or the retailer)?

Based on the app approach in Walmart, maybe an app is not top-of-mind the way a separate device in the store would be. No one discussed the shrink implications but I'm sure that is a consideration as well.

One of the things that could help Stop & Shop is the placement of devices. In my local store they are at the entrance, almost behind you when you walk in. That is never a good placement. Put them in the shopping zone vs. the transition zone. Maybe as a free-standing fixture.

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Robert DiPietro, GVP Product Strategy & Business Development, Affinion Group

Perhaps this is just a case of being too new and too soon. Customers need to learn how to use the technology and embrace it. For example, in my travels I've noticed hotels are starting to have "mobile check-ins." This obviously can speed up the process and help the hotel's guests from having to stand in line. Nice idea, but so far I've not seen one guest taking advantage of it. It doesn't mean it's not a good idea. Other than some early adopters, it simply means that not enough guests are using it. However there will be a tipping point. That's what happens with many technologies. Maybe Scan & Go isn't a great idea. Or, maybe it's just an idea before it's time. Maybe customers have to be taught to use it. Maybe they need an incentive to use it. Like the mobile check-in at the hotels, it seems like a great idea. Let's just give it a little more time for the customer to figure it out.

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

If the complexity of the tools greatly outweighs the perceived value, then there needs to be a decision to either investigate improvements and iterate or simply move on to other efforts at improving customer experience.

I think often that usability testing methodologies are lacking in having a clear definition or measure of value. It's not just about how easy the technology is, but how much is it worth?

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Matt Schmitt, President, Chief Strategy & Innovation Officer, Reflect

Customers come to applications like this with a healthy dose of skepticism. Every one of us, savvy shoppers all, have had an uncomfortable moment at self-checkout, and we don't assume that mobile apps will be different.

Frictionless checkout is coming, but we're not there yet.

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Cathy Hotka, Principal, Cathy Hotka & Associates

Scan & Go was great for me, an impatient techy person who isn't the biggest WM fan in the first place, to get in, put items directly in my reusable bag, and get out.

The audits were AWFUL and occurred seemingly every other store visit—find manager, wait, rescan EVERY item, rebag, apologize. Associates rarely knew how to override. No trust, no spot checking.

'adamnet123'

It's hard to imagine a retailer more ill suited to test this idea: I realize smartphone usage among Walmart shoppers isn't zero percent, but it certainly isn't 100% either, and whatever it is, it must be relatively small.

But beyond the demographics here, this idea sounds like it combines the worst of all worlds: (still) having to wait in a line, but being asked to do work yourself (AND supply your own tools). At least with self-check, the time saving is obvious (assuming, of course, the availability of scanners).

'notcom'

Let's face it: Scan & Go on the mobile phone didn't make the in-store experience more pleasant convenient. It it did, shoppers would have used it in higher proportion.

Any process that adds effort to the search-and-obtain journey by adding tasks in the aisle must deliver clear offsetting benefits to the shopper. Did Scan & Go meet that standard? It would seem not.

I'd argue that even grocery shopping list apps are in some ways an impediment to efficient progress in the aisles. Add the requirement to scan and bag each item

So maybe our thoughts about the tech adoption curve or the version 1.0 problem should be put aside until we learn more about what shoppers really want to use. Surveys about "What would you do?" may not be reliable enough. Only field tests like Scan & Go just experienced can yield reliable insights drawn from actual behavior.

Walmart has gained important lessons from this test, learned the necessary, hard way.

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James Tenser, Principal, VSN Strategies

Walmart required a download of the app to the consumer phone; the app was only available for the iPhone; the program was not well promoted; and there was no real value in the app to the customer. So the customer has to use their own device, had to take the initiative to learn about the process, and gets only the ability to check themselves out—unless these is an issue in which case the customer must seek out assistance. Too many obstacles for this program to work.

These mobile programs need to make the shopping process easy, they need value for the customer (points, rewards—heck, the consumer is supplying the labor), and they need to improve the immediate shopping experience. Grocery may not be the best format for mobile self-checkout as there are lots of items, lots of coupons, large carts, etc.

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Larry Negrich, Vice President, Marketing, nGage Labs

Walmart told me that while Scan & Go was only a test, one of many it is conducting, the learnings from Scan & Go were important toward the development of Savings Catcher and e-receipts—two programs that have been recently been rolled out on a national level.

From e-receipts, there is a whole new host of possibilities such as predictive shopping lists and auto-shipments that customers will have a change to evaluate in the near future.

I don't believe Walmart ever intended to make Scan & Go a widely used offering. There was a loss prevention issue hurdle as there is too much risk in merchandise theft in stores with very high traffic The self-check corral which is widely used today gives customers a fairly quick check-out option if they only want a few items and it is manned by one sales associate.

Kim Souza, Editor, The City Wire

They require the shopper to work while shopping. This concept is foreign to shoppers and until there is an easier, less-troublesome way for customers to do this, it will not be successful.

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Kai Clarke, CEO, American Retail Consultants

It will take time, and Walmart consumers are probably the laggards in this. Remember the automated checkout's introduction and it's pain? Now that is all I use, especially for the one-to-eight item purchase.

On a side note, a cultural change and better training may help the checkout times. In Canada we have some Asian grocery stores that can process checkout much faster than any Walmart.

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Gajendra Ratnavel, CEO, L Squared Digital Signage

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