With technology budgets remaining slim for the foreseeable future, supermarket chains don’t have the luxury of adding technology simply for the sake of being considered “innovative.” However, cutting-edge solutions are a pre-requisite to delivering a unique, valuable shopping experience.
By adopting innovations to ease the shopping and checkout processes, chains are successfully drawing more cost-conscious shoppers into their stores.
To build loyalty among profitable shoppers, chains must provide a valuable shopping experience, one that helps consumers make educated purchase decisions, delivers streamlined checkout options and promotes items that fit their needs. Technology can help chains achieve these goals.
To quicken the pace of checkout while engaging shoppers as they rolls their carts down the aisles, chains such as Stop & Shop, the Quincy, Mass.-based division of Ahold USA., have been turning shopping carts into digital marketing vehicles and checkout devices.
Called the Shopping Buddy, the shopping cart-mounted touch screen device debuted at limited Stop & Shop stores in 2002. Bullish on the power of portability, Stop & Shop transitioned the program to a handheld device in 2007. The chain now uses MC17 wireless handheld scanners, from Motorola Enterprise Mobility Solutions, based in Holtsville, N.Y., which run software provided by Quincy, Mass.-based Modiv Media.
The project was one component of the retailer’s “Project Refresh Investment” program. The three-year plan, which began in October 2007, focuses on the remodeling and rebranding of a majority of Giant stores.
“This strategy was presented at a time when we still walked a tightrope when learning how to differentiate ourselves from our competition and draw in shoppers,” Steven Vowles, senior vice president of marketing for Stop & Shop, said during the L.E.A.D. Marketing Conference, sponsored by RetailConnections, Primary Communications and Somerset Productions. The event was held in Chicago in September.
The units are prominently displayed near each store’s customer service counter. Shoppers retrieve a device by swiping their loyalty card over a dedicated scanner on the display fixture.
As shoppers choose merchandise from store shelves, they use the unit to scan item barcodes and place products in their shopping carts. The scanner also delivers electronic coupons and promotions to various customer segments. All orders are electronically totaled and transactions can be tendered at a dedicated self-checkout lane.
Vowles reported that more than 260 stores are using the units and they process 10% of stores’ sales. “For consumers, the units are contributing to convenience and speed during checkout,” he said. “Internally, we have seen a 7% reduction in front end labor—resources that can be redirected toward other store-level operations.”
Positive results prompted the chain to augment the project with its “Order It!” program, an integrated kiosk- and LCD screen-based deli ordering system. Shoppers scan their loyalty card at the kiosk and the touch screen directs shoppers through the ordering process, which includes a history of recent orders and a price tally. Fresh food manufacturers can also deliver targeted discounts and promotions to users based on their order history.
Upon completion, shoppers receive an order number. They can also input their cell phone number to receive a text message once the order is complete.
Orders placed through the kiosk are electronically transmitted to a work management system that integrates all orders (those placed via kiosk or verbally with store associates). The system allows all orders to be viewed by the deli’s preparation line and an LCD screen also displays order statuses.
“It keeps consumers shopping instead of waiting around for orders to be filled,” Vowles explained. “Kiosk-based orders also tend to be larger than those verbally given to associates.”
Based on the 400 stores that feature the technology, “we have seen an uplift in sales, as well an increased in store visits by users,” he said.
Stop & Shop is now merging the two systems. Scanner users can place deli orders and the handheld unit displays the same information that appears on the deli kiosk and LCD screen.
The technology combination could also play a role in enhancing the chain’s pharmacy operation. Based on the loyalty shopper’s health and beauty purchases and prescription histories, the unit could deliver promotions on merchandise that is linked to fighting personal health issues or diseases.
“This technology is a great way to be innovative, deliver value and reduce operating costs,” Vowles says. “In the future, we expect the technology to uphold our reputation as being a better place to shop vs. the mass merchandisers.”
According to industry observers, too many chains forget that the shopping experience continues well after a customer leaves the store. Shoppers are conditioned to save receipts to ensure that prices are accurate and make returns less of a hassle.
“Some use them for tax purposes, others rely on them for warranties, rebates or potential returns,” Susan Harman, senior manager, product management, Mountain View, Calif.-based Intuit, explained at the conference.
“They are more than just a record of transactions that occurred with the retailer. Consumers treat receipts like cash.”
That is also when the trouble starts. They are shoved in shoeboxes, bags, dresser drawers and envelopes and can’t be located when needed. “Many times, consumers experience anxiety and stress if they can’t find them.”
Some chains are easing their pain and building stronger consumer relationships, with electronic versions of traditional paper-based receipts. While there hasn’t yet been mass adoption of digital receipts, they are making a statement in the grocery industry.
Smart & Final has been offering the service, with the help of Atlanta-based AfterBOT, for nine years, “at the request of our shoppers,” Tom Montano, Smart & Final’s director of customer relationship management, said at the conference.
The retailer allows shoppers to sign up for the service on its website, www.smartandfinal.com, and at their convenience, consumers can view and manage documents. All receipts are archived for three years. Shoppers also have the option to continue receiving paper receipts for in-store transactions.
The chain recently expanded the service in its Phoenix market through its partnership with AfterBOT and Intuit. Consumers can opt-in to download the receipts into a money management application that resides on a Web portal, managed by Intuit. Here, shoppers can manage their receipts with the supermarket chain, as well as those from other retailers participating in the program.
Syracuse, N.Y.-based Green Hills Farm is also preparing to launch the service. The grocer’s main motivation: “the hard savings associated with the program,” Gary Hawkins, Green Hills’ CEO, said at the conference. “We spend thousands of dollars a year on receipt paper,” he said. “Besides gaining a significant cost savings, it is also a move toward sustainability—an important factor for our shoppers.”
The program is on the verge of its debut, but the grocer is already considering future benefits. “Shoppers will have the choice to choose paper or digital and those opting for digital receipts could access information wherever they have Web access,” Hawkins said. “This could be at a desktop, an in-store kiosk or mobile device.”
The self-service store
As retailers pull out all the stops to attract shoppers in a saturated marketplace, Tesco is using self-service technology to carve a niche among time-starved shoppers. While self-checkout, price checkers and in-store kiosks are nothing new, Tesco’s self-service store concept takes the concept to the extreme.
The chain’s Tesco Express store in Kingsley, Northampton, England was outfitted with five self-checkout stations. While there is one associate available to help with scanning questions and tendering issues, traditional checkout is not an option.
While a completely self-service model is a bold move, other chains have been moving customers over to self-checkout and self-service technology. These units processed more than $192 billion in sales in 2008, according to Franklin, Tenn.-based IHL Consulting Group.