Ahold Chains Put Scanners in Shoppers’ Hands

Discussion
May 23, 2011
Tom Ryan

The Wall Street Journal last week profiled the Scan It! handheld scanners that have been tested over the last few years and now rolled out to about half of Ahold USA’s Stop & Shop and Giant supermarkets in the Northeast. The system enables shoppers to scan items as they navigate aisles with a screen keeping tabs on purchases.

Shoppers activate the scanner by reading the barcode on their loyalty card. On average, about a dozen times per shopping trip a "Ka-ching" sound indicates that an electronic coupon has appeared on the screen. In many cases, loyalty card data helps present coupon offers based on past purchases and the user’s current location in the store.

"Last week, right after I scanned coffee, I got a coupon for coffee creamer, which I needed," Patty Emery, a shopper at a Stop & Shop, told the Journal. "It is really cool."

She estimated she saves 20 minutes as well as gets five percent off her weekly grocery shopping trip using the device. When done selecting items, Scan It! shoppers either go to a self-checkout station to pay or hand the device to a cashier. Dedicated self-checkout stations for Scan It! are being installed as the device gains popularity with customers.

As Scan It! users bag their own groceries and largely check out themselves, the devices free up more time for cashiers to help customers and may ultimately offer labor savings for stores, according to the article.

Erik Keptner, Ahold’s senior vice president for marketing and consumer insights, also said that shoppers who use Scan It! spend about 10 percent more than the average customer because of the targeted coupons and the "control" consumers feel when shopping with the devices.

In April, Stop & Shop began testing a Scan It! app at three stores in Massachusetts that enable shoppers to use their iPhones to scan, according to The Boston Globe. Connected to the store’s Wi-Fi network and also tied to loyalty cards, the app uses the phone’s camera to work similarly to the in-store Scan It! system. Kraft, Nestle, Perdue, and SC Johnson have signed up to offer coupons through the app.

Paul Schaut, chairman of Modiv Media, the developer of the app, told the Globe that applying the technology to smartphones will significantly cut to the costs of such scanning technologies for stores.

As far as risks, Ahold officials told the Journal that it spot checks customer receipts but hasn’t found shoplifting to be problem with in-store mobile checkouts. The risk to shoppers’ credit cards and identity security is also lessened if they are handled by store employees although Gartner Research’s Avivah Litan said such devices hold some risk to tampering if not completely secured.

The Journal’s article indicated that the arrival of customer-scanning technologies are complementing a push to provide scanning devices to workers at Home Depot, Nordstrom and others to both search inventories and enable checkouts on the selling floor.

Discussion Questions: How receptive do you expect consumers will be to mobile scanning devices? How would you assess the benefits to retailers as well as any potential hurdles and risks?

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20 Comments on "Ahold Chains Put Scanners in Shoppers’ Hands"


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Paula Rosenblum
Guest
9 years 11 months ago

This is a famous application, as it was in pilot for somewhere between 6-10 years, across multiple hardware vendors.

One of the RSR partners has used it in Boston. He tells us at first it was a great novelty, but now the devices tend to lie fallow.

To be candid, I thought they’d switched and just made “an app for that.” Why would anyone want to use a store-owned device when they can use their own? And why would a retailer want to provide and maintain those devices when he doesn’t have to?

Dan Berthiaume
Guest
Dan Berthiaume
9 years 11 months ago

I think this technology has a solid niche audience who will absolutely love it, but is not for everybody. As long as traditional checkout options remain available, self-scanning is a great feature to make available for more tech-savvy customers.

Ryan Mathews
Guest
9 years 11 months ago

This is really old news in parts of the world. Superquinn, for example, relied on hand scanning over a decade ago.

Does it work? Yes.

Do customers get used to it quickly? Yes.

Can people “beat it” and scam the system? More often than scanner manufacturers like to admit. But, cheats still represent a minority of all customers.

Thanks to cell phones, people are getting more used to pointing handheld devices at something–to read a barcode, to check prices at other stores, to receive a coupon and even to get on an airplane.

Nice to see 21st century retail is finally catching up with 20th century technology.

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
9 years 11 months ago

I am very familiar with the Scan It! technology and use it on most of my Stop & Shop shopping trips. Moving the technology to a consumer’s smart phone was the next logical step. The upfront investment for the retailer goes down significantly as does the training of the consumer.

I see retailers using this technology moving forward to not only promote national brands, but also their own private brands. The key is keeping it simple, relevant and targeted. For example, if I buy coffee, showing me a coupon for coffee filters or creamer makes sense. Don’t show me a coupon for Mac & Cheese.

To date, Ahold has done a great job at this and I expect they will continue to moving forward.

Steve Montgomery
Guest
9 years 11 months ago
Customers, like the supermarkets, are seeking was to enhance the shopping process. This system has the potential to do it in two ways. First is coupon matched to the items being purchased. Who doesn’t like a discount on something they need? The second is to shorten the checkout process. The downside I see in the current process is the article indicates the customer bags their own purchases rather than having a clerk do it. Ok if it’s just a few items–people do that now at the self checkout lanes. Alternatively the customer can bag their purchases as they go which for those not use to bagging groceries will certainly be a learning experience. If the customer buys a large number of items, this could result in an even longer process. Typically a bagger is working while the items are being scanned so the delay between paying and leaving with the bagged groceries is not long. Second, a trained bagger can perform this function far faster than an untrained customer who has to dig through the… Read more »
Gene Hoffman
Guest
Gene Hoffman
9 years 11 months ago

Shoppers must quickly perceive that hand held scanners will make their shopping experience better, quicker and more interesting. Otherwise it could be seen as an extra impediment, even in this age of ubiquitous technology instruments, to the shopping trip … and that would destroy the ROI for hand scanners.

Will shoppers cheat? Some will but most won’t.

Are hand scanners worth the experiment? Let’s wait and see what happens.

Paul R. Schottmiller
Guest
Paul R. Schottmiller
9 years 11 months ago

Consumer scanning has largely failed to gain mainstream adoption. Two areas that have some traction worth noting are self checkout and price comparison. Despite this track record of limited success, there is good reason to believe more widespread adoption is on the horizon.

Smart consumer devices (smart phone at entry level in next couple of years), no checkout lines, reduced labor cost, product info, service, and personalized promotion at POP, and multichannel assortments continue to raise the potential value for customers and retailers.

David Zahn
Guest
9 years 11 months ago

On a related note–I teach a graduate school course in consulting skills at University of New Haven and use Stop & Shop as a case study assignment. I provide the students with financial background, a task to “improve” the shopping experience, and then ask them to visit at least 3 stores (plus competition) and make recommendations. 4/5ths of the “proposals” I receive include doing something to improve the use of the devices. Students feel it is under-promoted and few know when, how, or why to use it. If the store would educate them, they would be more likely to use it.

Dan Frechtling
Guest
9 years 11 months ago

I agree with Paula, John and Paul. The dedicated handheld unit will have difficulty reaching profitable scale. It serves as a proof of concept before smartphones take over.

Why have self-scanners at all? Benefits include labor savings, targeted offers, shopper experience, and a platform for greater things. We only need to look to last week’s discussion on mobile payments to envision a platform of e-solutions.

Risks include theft, cost of maintaining the devices, training and customer service, and slow uptake by shoppers. Mobile solves most of these. The more personal information people share the less likely they are to steal, shoppers cover hardware costs, and geographic rollout speeds up when not bound by unit installation.

Uptake is contingent upon the retailer, not the shopper. Dedicated scanning units will prove out the benefits, then go the way of the PDA to extinction.

By that point, a retailer’s smartphone suite will blend scanning, offers, checkout, payment, e-receipt into a “smart-to-mart” shopping experience.

Bernice Hurst
Guest
9 years 11 months ago

The first and only supermarket in England to use handheld scanners was Waitrose. They’ve had them for quite a few years. Anecdotally, whenever I shop, only a small minority of customers can be seen with them. Having tried them early on, a few times, I gave them up as well–too tedious, not time saving and, as mentioned by others, packing my purchases as I shopped was a pain. Also, fewer shoppers use coupons than American shoppers so there is no application of that here (although I suppose it could be seen as a massive opportunity to tempt and educate us).

The other supermarket chains offer scanners at the checkout counter and some customers do use them but there are generally lines and, again, no advantage that I, personally, can see. But then you all know that I am the Queen of Technology Klutzes.

Ted Hurlbut
Guest
Ted Hurlbut
9 years 11 months ago

I can’t tell you the last time I was in a Stop & Shop and saw a customer using a hand-held. But I still see them sitting in their stand, at the front of the store, unused.

This technology may have a place, but I think wide-spread adoption is still beyond the horizon.

Aldata Apollo
Guest
Aldata Apollo
9 years 11 months ago
Bringing this kind of technology into the store is extremely exciting, even if it has been tested previously by other retail outlets, with varying degrees of success. It is obvious that shopper based rewards need to be tailored to the need of each individual shopper, and a cell phone approach (texting for example) can be a little invasive. Using solutions like this, and applications designed specifically for mobile devices are certainly the future for in-store rewards. The key is, ensuring customer security, especially in relation to sensitive data, is achieved without risk. Too often, customer loyalty programs fail based on a generic approach to reward loyalty. Schemes like this allow the customer to “opt-in” to the process by using the device, and then receive rewards based on their previous shopping habits, and potential associated product purchase. A true customer-centric approach to drive satisfaction, and enable efficient shopping in-store, removing vary degrees of frustration. The key will be to see how these devices and applications can be tied into other data feeds–both pre and post–to enable… Read more »
Larry Negrich
Guest
9 years 11 months ago

Allowing the customer to utilize their own device would require the IT dept to supply and maintain the software on multiple OS and hardware platforms. And as the mobile device market is moving quite briskly, that may be quite a burden for IT.

If the retailer is looking for adoption of this device they may need to give the consumer more of an incentive. I don’t mind doing the traditional grocery store functions of scanning, bagging, and paying but as I’m now acting as an employee I would expect to be compensated in some manner.

Bill James
Guest
Bill James
9 years 11 months ago

Great idea but there are two data market forces Ahold should listen to: 1) Android, iPhone and Symbian smartphone O/S have an 88% market share in North America and Europe. This application will have to logically migrate to the smartphone in order to truly scale. 2) And the iPad and other tablets. If it’s not on a smartphone or on a tablet-read app, it simply won’t matter long term.

David Dorf
Guest
9 years 11 months ago

Shopping Buddies have been around for a while, and migrating to consumer-owned devices was the next logical step. Its a win-win as it saves the consumer time, saves the retailer labor, and offers a new marketing platform for offers. What’s not to like?

Tim Henderson
Guest
Tim Henderson
9 years 11 months ago

Given the control (or perceived control) that mobile scanning offers consumers, I think many shoppers will welcome the tech.

Re: Scan It, while I like it, I also wonder why retailers would make the hardware investment when consumers are already pocketing smart handheld devices in growing numbers. Along with various apps created by retailers, CPGers and third parties, the smartphone seems to be the better hardware choice. That’s why it’s also nice to see that the Stop & Shop/Giant application is, in part, proving that smart devices can be used for mobile scanning/checkout solutions. For any retailers considering such tech, I’d say the smart choice is the smartphone.

Mark Burr
Guest
9 years 11 months ago

The opportunity lies in other mobile devices–enough said.

Ed Dennis
Guest
Ed Dennis
9 years 11 months ago

This sounds like a valid concept. However, my last trip to the market yielded 4 mispriced items of the seven I purchased.

Needless to say the success of scanners will depend on the input of timely, accurate data. My current experience indicates that only the very best grocers have a handle on accurate data management. Maybe Stop & Shop is better, but I doubt it. Why won’t they just focus on having inventory properly priced and store personnel trained and motivated. After you get those two taken care of the you can move on to merchandising and sweeping the floor.

Herb Sorensen
Guest
9 years 11 months ago
I have followed Modiv Shopper for ten years, and though never a client, I have been privy to some of their data, and can vouch for the effectiveness of their device. I attribute this to ten years of making all the mistakes that others are just now getting engaged with. 😉 Having said this, I believe that building a shopping device around the idea of paying shoppers to buy (coupons) is misguided. It doesn’t mean it doesn’t work, just that profits are needlessly being ceded. But for this fact to get proper recognition just might require brain transplants all around. 😉 I do believe that the gateway app that will drive massive adoption of smart phones into Modiv-type applications will be “pay as you shop,” so that at the end of the trip, the shopper can immediately head home, do not pass go–to the checkout. This will persuade shoppers to have an ongoing relationship with their device as the trip proceeds. That is, as each item is selected or evaluated for purchase, the shopper will… Read more »
Gina Rau
Guest
Gina Rau
9 years 11 months ago

While I can certainly see the novelty in such a device (from the shopper’s perspective), I’d be concerned that this will wear off and the only enticement will become the targeted offers. In the long run, this doesn’t help retail profits.

Having used self-scan checkout at Fred Meyer’s for as long as they’ve had them (years), I can honestly say that self-checkout is a big opportunity for the shopper and store–time, money and convenience for all.

Shoppers have one goal when they enter a grocery store: purchase the items on their list in as little time possible. They want to get in, and get out. Scanning as they shop, being redirected all over the store with targeted offers, and still having to stop to scan/bag groceries doesn’t help them achieve their goal.

I agree with earlier comments that there’s likely a niche audience that this service fits and assume that the preferred device will be our own smartphone over a store scanner.

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