Sources: Dollar General, Google Play
Dollar General pilots scan & go tech
Dollar General has become the latest retailer and the first dollar store to introduce a scan & go app.
Being piloted at 10 Nashville-area stores and rolling out to 100 more in the second quarter, DG Go! enables shoppers to scan items as they shop and then use a self-checkout to pay. While saving shoppers time by allowing them to avoid waiting in a cashier-manned checkout line, the app also provides a running total of what shoppers have in their baskets.
DG Go! automatically applies digital coupons for shoppers and alerts them of savings on the items they have scanned. Said CEO Todd Vasos on the retailer’s first-quarter conference call, “All of this makes staying on budget easier.”
He added, “As we continue to develop this app, we intend to integrate more functionality to deliver an even more personalized shopping experience.”
The app complements other digital initiatives such as digital coupons and personalized marketing campaigns. Dollar General has more than 12 million subscriber accounts, and customers who more frequently engaged with its digital tools tend to check out with baskets about twice as large as the chain-wide average.
Said Mr. Vasos, “With nearly 75 percent of the U.S. population currently within five miles of a Dollar General, we have a unique opportunity to help shape our customers’ digital shopping behavior all while leveraging our nearly 15,000 brick and mortar stores to help them save time and money.”
So far this year, Kroger and Meijer both rolled out scan & go programs. Macy’s expanded its program and Urban Outfitter is testing the technology at its New York City flagship.
In May, Walmart discontinued its second test of the technology due to low adoption rates. Shoppers found it awkward to scan a large number of items, especially fresh products like fruit and vegetables.
For stores, reducing labor costs is seen as one benefit of scan & go, Further, a Progressive Grocer article notes that shoppers using in-store pickup are more likely to make add-on purchases for forgotten items with a scan & go option. The technology also enables real-time interaction with logged-in shoppers and insights into shoppers’ paths of purchase.
- Dollar General Corporation Reports First Quarter 2018 Financial Results; Reiterates Financial Guidance for Fiscal Year 2018 – Dollar General
- Dollar General Corporation (DG) CEO Todd Vasos on Q1 2018 Results – Earnings Call Transcript – Seeking Alpha
- 5 Ways Mobile Scan-and-Pay Benefits Grocers Beyond the Checkout Line – Progressive Grocer
- Dollar General Pilots Mobile Checkout App – Progressive Grocer
- Kroger Announces Divisions for Scan, Bag, Go Expansion – Kroger
- Meijer Announces Innovative New Technology To Improve Customer Experience – Meijer
- Urban Outfitters launches third-party marketplace, tests self-checkout – Marketing Dive
- Stance Takes the Store Experience to a New Level with Mobile Self-Checkout Powered by Moltin – Moltin/Stance/Business Wire
Discussion Questions
DISCUSSION QUESTIONS: Does scan & go checkout technology make sense for the Dollar General shopping experience? To what extent do you see scan & go tech being adopted across retail, and how will its use affect the customer experience?
Poll
BrainTrust
Laura Davis
Founder, Branded Ground
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
This is a convenience for some shoppers, but not a game-changer for Dollar General. There’s no question that scan & go technology is finding a place in retailing, but the technology is hardly fool-proof, and consumer demand so far (other than the Amazon Go PR flurry) is tepid. As these technologies become more robust and affordable for retailers, they will become more pervasive and anything that eliminates/reduces purchase friction in the store is worth exploring. However, Walmart’s decision to suspend its program due to low adoption is telling.
Hi Mark,
As a provider of mobile scan and go technology (FutureProof Retail) I have some expertise on why shoppers have had lukewarm reactions to many previous programs: They’ve been implemented more like POS software for associates than consumer-grade easy experiences. For example, most retailers who build their own systems have more than 12 taps in the signup process, and average over 7 fields of information to fill in. Kroger, Stop & Shop and others who tried even required customers to fill out a paper questionnaire and hand it to customer service for data entry, before they could use the program.
We recently launched another of our Scan & Go solutions for SPAR Belgium, and we’ve seen high adoption and retention there right off the bat by minimizing the up-front efforts for consumers to get in. I believe that the adoption of scan and go technology will only increase, as retailers start to build more polished and streamlined experiences as compared to their early attempts today.
Scan & go makes sense provided that it does not hurt in-store customer service for the overwhelming majority of customers who won’t utilize it.
On the upside, there is no doubt that customers love the convenience. Scan & go, as long as there are no technological glitches, is a fast and easy way to get in the store, get what you need and leave. I see more retailers rolling out scan & go in their stores. However, on the downside, the article mentions it’s another way for retailers to reduce labor costs and that is a concern. Too many retailers refuse to accept the fact that human interaction is one of the main benefits of the in-store shopping experience and the more we eliminate staff, the less opportunity for powerful customer engagement. Technology is great and I’m all for convenience, but having store associates interacting with customers and making them feel wanted, appreciated and valued is still necessary for mastering the customer experience. NO technology can do that.
I agree with Mark and Max. If they’ve unearthed a key friction point such as long, frustrating checkout lines OR if they are simply experimenting, great. But if this is a me-too strategy, I would love to see the funding supporting something that would make more of an impact on overall store experience. Yes, expectations aren’t super high for CX in a dollar store — but our firm sees that changing in the very near future as low price, high experience becomes more prevalent.
My initial reaction was that the Dollar General shopper profile would not be fitting for such a service but even if a smaller percentage of their shoppers use the app, double the basket size is a compelling KPI. The ability to keep a running tally of total basket cost and automatically applying coupons adds value and convenience to the budget-conscious shopper. Not every service or tool a retailer offers has to be a game changer — the combination of several things will ultimately be what adds up to making the difference of a shopper choosing one store brand over the other.
Hi David, as a provider of mobile self scanning solutions I have some expertise on the shopper profiles that adopt it: It’s not what you might expect (younger, wealthier) — in fact it’s equally distributed among older shoppers, across genders and across income levels. 90+% of shoppers now have compatible mobile phones, and when you’re shopping on a budget being able to see the total before the checkout is a bigger value than you’d expect!
The scan & go model may not be for all retailers and their corresponding customer bases. It will be interesting to see if scan-and-go is adopted by the Dollar General customer base, whose demographics are different than those of urban and suburban areas.
Mobile checkout, line busting and scan & go technologies are picking up momentum, and there certainly is a business use case within big box, general merchandise, convenience and dollar store formats such as Dollar General. It will add value as an add-on for the customer to help save some time, remove some friction from the dreaded checkout process and help make the shopping experience a bit more seamless.
Introducing scan & go technologies will not necessarily be a game changer for Dollar General or other retailers. Yet we are now seeing companies such as Macy’s and Bloomingdale’s pushing more of a self-service model, as mobile checkout will scale to all their stores nationwide by year-end.
As an option, it makes sense to provide these capabilities across most retail formats. But mobile checkout is not in itself a game changer.
Brandon I agree with you in the short term, that mobile checkout is not a game changer. However, I think it will become a game changer — because it encourages shoppers to adopt the retailer’s app — bringing the retailer into their pocket wherever they go. This is key to improving marketing, ecommerce, communications and customer service, you name it. Without a good reason to engage shoppers on their phones, brick and mortar retailers will struggle to gain their shoppers’ attention!
Anything that makes shopping easier, quicker and more convenient is worth taking a look at. There is a learning curve for customers, and for the ones that take a few moments to understand how to scan and self-check out they might like the ease and convenience, not to mention not having to wait in line.
Scan & go has many of benefits of self-checkout and some of the same negatives. Customers are more likely to use it if they have a few items than when they have a basket full. This can be a benefit for both groups as it can shorten checkout lines and speed up the payment process for everyone. Bottom line there is no downside for Dollar General or their customers other than what Art mentioned.
Hi Steve,
As a provider of mobile self scanning solutions, I can speak to whether shoppers are more likely to use it for small purchases. The surprising answer is: No. In all of our stores, grocery, micro market, stadium and fashion verticals, the average shopping basket in dollars and items is the same or greater than without mobile self scanning. In fact, we often see people on very large shopping trips preferring mobile self scanning because they get to track their total before the checkout: useful when you’re buying $400 worth of groceries for the week!
Real life sometimes gets in the way of a great idea. While *most* of the product in Dollar General has bar codes, there are a fair number of items in general/home merchandise that generally lack scan codes. I’m also shopping for smaller items that fit in a handheld basket (subtract one hand) while the other hand is grabbing the items I need (subtract a second hand).
If Walmart, with enormous shopping carts and two free shoppers’ hands, can’t make this work how would a Dollar General customer have a third hand?
Scan & go self checkout is one of several killer apps that are operational and customer experience game changers. There continues to be a lot of prospecting for that gold but yet little yield. The partnership of Dollar General and its scan & go suppliers is the possible big strike and so they, as others, should persevere in resolving the issues that could lead to a changed industry forever.
Scan and go technology has been around for years. It’s interesting how only now there’s a bandwagon effect happening just as the next technology is starting to be realized (Amazon Go style computer vision checkout). Dollar General making this move is a quarter step in the right direction. There’s a massive gap between tech available and most retailers being ready to adopt. That gap is an incredible opportunity for those that focus on the shopper, the experience and what’s possible (not just what the competition is doing).
The scan & go terminals are great for customers and lower the cost of cashiers for retailers. It’s a great idea until some savvy shoppers catch onto the fact that they can scan cheaper items and take more expensive ones home provided they are same weight. In recent months, U.K. supermarkets using these systems have found that they are selling massive quantities of carrots, in fact more than they have ever bought, while avocados are not selling so well yet they never have enough and certainly none left at the end of the day. Scan the carrot and take home the way more expensive avocado, seems like a great deal for the shopper but not for the supermarket. It certainly makes a mess of store inventory, forecasting and replenishment!
There have to be built-in checks to ensure that customers do not gain an upper hand and eventually this becomes an epidemic. Most customers are loyal and honest but it only takes a small percentage to damage profitability and if others see they are being affected they may also stray from the path! The rush of retailers down this road could cost the unwary very dearly.
Competitive retail forces and advancements in technology that directly affect customers demand that retailers continue to up their game. These advancements also educate the customer on what to expect (and competitively demand) on a store visit. With scan & go implemented and coupons being offered on selected in-cart items, along with special marketing messages — this fills the expectations and improves customer perception of the store. We should celebrate those businesses who wisely carve new paths to purchase for their customers.
When it comes to trends, better to be early than late. However, trends like scan & go do not apply equally everywhere. I agree with Mark Ryski — this will not be a game changer for a Dollar General-type store.
The customer base at dollar stores is far different than Amazon Go or Apple. The products and price points are different. Walmart’s cancellation of its scan & go pilot is a clear indicator that no, technology is not flawless or universal.
Customers are always right — they vote with their wallet. They must find a piece of technology to be a value, not a pain. The best news for Dollar General is that this is a pilot and the numbers will tell them whether this makes sense to scale.
Of all the retail verticals in which scan & go has been talked about, dollar stores make the most sense to me. I can warm up to the idea that I’m running in for some laundry detergent and I can scan and go.
As long as they can manage the shrink and the technology in the stores, (and those are BIG ifs), I see this as the right use of the technology.
Scan & go can help create a bond between the customer and the store. I personally do the grocery shopping with my phone in hand. That’s where I log my grocery list. It would be painless to scan items as I go down the list. It won’t change how I shop until they get to the level of suggesting items. “You bought peanut butter. Do you need jelly?” And if the scan & go works smoothly, it reduces the odds that I will do my regular grocery shopping elsewhere.
Scan & go technology is about maximizing convenience for the customer. This makes sense in a dollar store format for those customers who are coming in to purchase a few items that fit into a hand basket and get the added benefit of automatic coupons. As Walmart found, for customers intending to buy a full shopping cart of items, the value is diminished. I give credit to Dollar General for trying the technology and identifying which set of customers will benefit. Not every new in-store technology has to benefit ALL customers. As long as enough customers benefit, there can be a tangible ROI that may include larger transaction values. Other customers may benefit from a different technology. It’s the experimentation that’s required to find out which tech works for which shopper that matters, and Dollar General seems on its way to doing this.
This makes good sense for Dollar General and other dollar store retailers. The assortment is smaller (more manageable) in dollar stores plus there are less fresh products to scan. Customers constantly seek speed and convenience in their shopping experiences. This technology delivers both.
The question will be as DG increases the amount of functionality (mobile check-out, integrations, coupon/loyalty), what are they banking will be the realized benefit for the customer? DG saving on labor costs makes sense, but how specifically will they translate value for the customer? How DG navigates the chasm between adoption and realized convenience will be interesting, but it’s impressive to see this kind of investment and focus.
I think a better question for the poll might be “how likely is ‘scan and go’ to prove popular with DG’s shoflifters?” It’s not hard to think that the minimalist staffing levels at dollar stores already cause shrinkage problems — albeit mitigated by the low value of the merchandise — and those who think about it will wonder how this can’t help but make it worse.
Whether this is a long term thing or not, it’s great to see simply from an experimentation standpoint. Dollar General will learn a lot more about its customers – from the extent to which they shop using mobile to how it helps customers make the most of their dollar while shopping. The key use case here appears to be tracking your shopping list relative to your budget, and being able to apply maybe in real time savings via coupons and other offers. That in turn can help build a larger basket ring and sell into new categories.
The scan and go technology is the future of retail, since it increases the customer experience, and makes sense for most simple purchases (and dollar stores have many of these). Being able to translate this into higher customer satisfaction and lower selling prices (and sharing this with the customer) is one of the secrets to this technology’s success.
Dollar stores had a great run over the past few years – stock prices for Dollar Tree and Dollar General hit all-time highs in Q1 2018. The bifurcating economy is creating growth at the extremes of the economic spectrum, and this is one manifestation of that. But both stocks are off their highs (Dollar Tree ~-20%, Dollar General -~5%). Our data suggest traffic to their websites is showing a similar general pattern – now trending down after a good run.
Dollar Stores are facing strong competition, particularly in the digital space. Low-cost/low-quality overseas suppliers are increasingly selling via Amazon. The Wish app has been extremely popular, essentially selling dollar-store-style products with the convenience of online shopping. Dollar Stores need to innovate to keep pace, and leverage their strong retail geographic coverage — this new “scan and go” app is one strategy they are testing to respond to these competitive challenges.