Retail TouchPoints: D’Agostino Offers Shoppers Automated Grocery Lists Via Ikan Scanning Technology

By Amanda Ferrante

Through a special arrangement, what follows is an excerpt of a current article from the Retail TouchPoints website, presented here for discussion.

In an age of increasingly time-poor and Internet-savvy consumers, the Ikan
grocery scanner is designed to do for grocery shopping what Netflix did for
DVD rentals. Manhattan retailer D’Agostino Grocery introduced the device to
its customers in early 2008.

The device is a small countertop device, reminiscent
of a kitchen appliance, which enables consumers to scan the barcode of empty
items via their wi-fi network to a digital shopping list, serving as a reminder
of what items (typically staples) should be purchased during the next trip
to the grocery store. Or, in some cases, consumers can arrange to have their
groceries delivered via the digital shopping system and receive a brief follow-up
communication from a grocer.

“We’re finding that people want to save time,” said Anderson Chung, spokesperson for D’Agostino Grocery. “For the most part, people do enjoy shopping for their groceries, but some chose to order it online – there’s a huge convenience factor” with the Ikan scanner.

To introduce the new scanning technology to its customers, D’Agostino sent an e-mail blast informing shoppers of in-store product demonstrations. The company offered an introductory price of $100, discounted from the $399 suggested retail price.

Although designed to provide shopping convenience, the scanner also offers merchandising potential. “I would imagine the brands would be dying to get into the database of groceries each home scanner has (and refills) to cross over with other loyalty database information,” said Laura Davis-Taylor, principal of Retail Technology Consulting. “It’s a golden ticket for behavioral merchandising.”

D’Agostino recognized that opportunity and implemented behavioral merchandising into the personal shopping feature of the scanner. Using customer intelligence and reviewing the items selected on consumers’ shopping lists, the grocer is able to target offers for specific customers as an incentive to shop.

Still, some industry analysts question the potential for the scanner to have a positive impact on sales and brand marketing.
.
“For the past several years we have seen a number of technology tools that were supposed to make it easier for people to shop for and buy groceries,” said George Whalin, president of Retail Management Consulting. “Yet, only a very small percentage of shoppers use the various delivery services that have been launched.”

Another analyst believes the timesaving feature may not draw consumers’ interest as anticipated. “Yes, the device saves time, but mainstream grocery shoppers are willing to spend some extra time to save on their groceries,” said Mark Lilien, consultant with the Retail Technology Group.

Finally, operational costs are a concern. “A lot of retailers lost their shorts with home delivery and may be loathe to jump in again without good reason,” said Ms. Davis-Taylor.

Discussion Questions: What do you think of the rollout potential for the Ikan grocery scanner? Is there enough consumer demand for such a device? What are the hurdles to its greater adoption?

BrainTrust

Discussion Questions

Poll

14 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Bernice Hurst
Bernice Hurst
15 years ago

How much do I hate this idea? Let me count the ways. Wrong time, wrong place, wrong audience, WRONG concept.

If, as I guess (I confess to not knowing for definite), D’Agostino’s audience is fairly affluent and interested in food, they may well prefer to do their own shopping. Even so, they may also be noticing price rises and starting to shop in more than one place, especially for the kind of staples that the scanner would scan. Granted, they may also be the techie types who love new toys and things to play with but, on balance, would this gadget really be worthwhile? Is the shopper in chief the player in chief? The kind of shopper who might find this thing fun and/or useful is quite possibly not a D’Agostino’s kind of customer. It might be better to have a gizmo that keeps track of what you buy from where. And what about price comparisons? D’Agostino might think this will help customers stay loyal to them but I think that comes under the wishful thinking heading at the moment. And finally–charging shoppers to shop? At this moment in time? No way can I see this as a golden ticket.

Mike Spindler
Mike Spindler
15 years ago

Good idea? Bad idea?

The more connected the “list” becomes with what is actually needed, the more convenience is offered to the consumer…and the more reward (additional convenience) they get for scanning items. Nice loop!

I am pretty familiar with the company and the CTO knows loyalty and understands the use of the internet to create convenience. Is this the right vehicle…time will tell. There are other capabilities out there that seem to have quite a few advantages including cost. But that doesn’t mean that there won’t be a place for the Ikan.

What the system, D’Agostino and their online grocery shopping supplier MyWebGrocer have absolutely correct, is that true shopper convenience is about minimizing the “chore” aspect of staples shopping. It’s not about greeters and “pop-up companion purchase opportunities.” At least not in the grocery store and not on 48 out of 52 weeks each year when from many consumer’s perspective…it’s just toilet tissue!

Oh, and the folks who “lost their shirt” offering online grocery shopping…did it wrong. It is routinely profitable and can be a terrific source of both incremental volume/customers AND customer super-loyalty.

Ben Ball
Ben Ball
15 years ago

One major technologically driven consumer habit change that may make the Ikan go this time is self-scan. Millions of shoppers who had no idea how to scan an item now do it routinely and find it more convenient than dealing with a person. Might this spill over into the humble grocery list? Simply scanning something before pitching it or carrying it to the recycle bin, then printing a list before heading out to the store sounds like a great idea to me. We are ‘list people’ at home–but I still forget to do it.

Now, if only they would add a feature where you could scan your wine labels and the vintner, year, etc. would pop up. Then put a notes page with it to record impressions and thoughts about the wine, along with a scoring system. Then create a searchable database by varietal–“Hmmm…what was that zinfandel that was so good with the lamb?” suddenly becomes a simple sort query. Ikan, are you listening?

Max Goldberg
Max Goldberg
15 years ago

I don’t see this being adopted by many consumers. Those that crave the latest and greatest technology might give it a try, but most will find it impractical.

Warren Thayer
Warren Thayer
15 years ago

I’m with Ryan, and will continue with the big Post-It note stuck to the sliding glass door by the kitchen phone, with a pencil nearby.

David Livingston
David Livingston
15 years ago

I agree with Mark; the device might save time for some but mainstream shoppers won’t use it. They will spend more time trying to figure out how to use it. Seems to me if someone is that time-starved, maybe they should hire a personal assistant to do their shopping for them.

Is the shopper handcuffed to using one store when using this device? Most likely only the higher priced stores will offer this service. Mainstream stores like Walmart or Aldi probably will never go near this. Seems it’s just easier and a lot cheaper to simply drive down to Aldi, get in and get out in 10 minutes.

Phil Rubin
Phil Rubin
15 years ago

Conceptually this is indeed the “golden ticket” that Laura Davis-Taylor suggests it is, or at least the beginning of one. The challenge is that it must be easy for the customers (scanning items on a small device at home might qualify) and come with a reasonable value proposition. At $100 for the device this becomes problematic, especially given economic pressures.

There are at least two things needed to make this a home run for everyone: 1) Incorporating other purchase data from store visits to create better suggestive selling (simply having manufacturers promote other items might become too irrelevant and thus turn customers off…unless there were adequate discounts to generate trial); and 2) Having manufacturers or payment processors further subsidize the cost of the home appliance.

When the cost to the customer goes away and it becomes easy, this can become a part of customers’ grocery shopping habit and it will be here to stay.

Ryan Mathews
Ryan Mathews
15 years ago

This “new” idea is, of course, fairly dated. Prototypes of this system have been floating around for decades. The question is what’s changed to make this the time the idea becomes scalable? My guess–not enough.

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
15 years ago

Efficiency for creating a list is great. However, given that people have 3.2 loyalty cards, having the system be tied to a specific store is not as desirable. Consumers want a list but then want to purchase their goods at whatever store offers the best price that week or they divide their purchases among stores depending upon price or convenience. Having the device connected to one store will limit it desirability.

Joel Warady
Joel Warady
15 years ago

Having another gadget that people have to keep on their table at home is a product destined for failure. But the concept is a sound one. The company that has developed the software should figure out how to create an application for the iPhone, and other mobile phones, that will allow people to do the same things, but carry the list of needed items with them when they go to the store. That might possibly make this a success.

But I would not run out to invest my money in this technology. People still are happy to use a pencil and paper to jot down the items that they need.

James Tenser
James Tenser
15 years ago

The evolution of “home pantry management” solutions continues, with this development. So long as the design and operation of the Ikan system is oriented toward the shopper’s convenience and benefit it has a fighting chance. The minute it emits the aroma of behavioral engineering, shoppers will turn up their noses.

For me the basic problem is that home scanners are bar-code and replenishment oriented. Handy for re-ordering packaged items like cola or laundry detergent; not so great for price look-up items like produce, meats, etc. When it can scan a naked grape stem, record whether they were green or red, then tell me which variety looks fresher in the store, sign me up.

John Gaffney
John Gaffney
15 years ago

They key here is branding and information retention. If D’Agostino, or any other retailer, can use a device like this to capture shopper information and brand that device, I think this is a winner. It’s a logical technology extension for the grocery channel, and a logical evolution for cross-channel retailing.

Gene Detroyer
Gene Detroyer
15 years ago

Do we really think that people are happy with a pencil and Post-It note? Adoption may be slow, but anything that can simply automate the shopping list will be successful. The automation of this process will follow the automation of hand written letters.

jack flanagan
jack flanagan
15 years ago

As previously noted, this device is simply yet another iteration of a “Solution” looking for a problem.