Moving targets

Consumers want to use their mobile phones at every step of the shopping process. How can grocers appeal to this growing segment of connected shoppers?

By Deena M. Amata-McCoy

According to a number of studies, about 90% of shoppers have mobile phones, but they are not necessarily using them to make calls. They are downloading coupons, comparing prices and perusing product information, among other functions, all from the palms of their hands.

While smartphones tend to be the device of choice for many shoppers, industry observers say consumers are experimenting with a variety of Internet-enabled devices, including tablets, and using them to interact with their favorite retailers. These consumers want to use their mobile devices throughout the entire shopping experience, from product research to payment.

“The explosion of this new shopper and the power of mobility can easily be compared to the e-commerce explosion in the 1990s,” explains Frank Riso, senior director of retail solutions for Motorola Enterprise Solutions, based in Holtsville, N.Y. “At the time, everyone knew they needed a web page to compete. Today, everyone needs some sort of ‘app’ to remain competitive.”

Industry observers say that retailers who think that this trend only applies to younger consumers are mistaken. According to Boston-based Chadwick Marin Bailey Specialties, 67% of smartphone owners under the age of 35 use their smartphone as a part of the shopping experience, but 51% of smartphone owners between the ages of 35 and 49 use their devices when shopping. Not to be left out, 33% of consumers aged 50 or older are using their smartphones when shopping.

“Mobile is clearly a game-changer,” says Adam Blake, Advanced Marketing Solution General Manager for Atlanta-based NCR Corp. “Apps allow the retailer to directly connect with the customer in the store, at home or online. Besides being richer than a e-commerce engagement, [mobile retailing] is also a cost-effective way for retailers to communicate with shoppers.”

As more consumers embrace mobile solutions, it will be imperative for grocers to integrate mobile strategies into their overall marketing initiatives, observers say. “In contrast to other retailers, many consumers visit their local supermarket several times a week, providing grocers with a unique opportunity for an ongoing relationship with their customer,” says Mike Adams, manager of Dell Retail Solutions for Dell, based in Round Rock, Texas. “Each visit is an opportunity to increase ticket size, build loyalty, provide incentives and reward patronage.”

While the mobile landscape offers retailers many opportunities for entry, observers say the easiest way to jump into the game is by establishing a mobile couponing program. Shoppers are clearly ready for this next step, as 44% report they would like to download coupons that can be redeemed via a barcode scanner at point-of-sale, according to NCR officials.

Observers say consumers initially use mobile devices to seek out the best deals and information from their favorite retailers. If retailers cannot meet their needs, they look for information from their favorite brands and then access third-party mobile shopping apps. “Grocers can easily release more shopping solutions and promote them around the stores,” says Molly Garris, director of digital strategy for Arc Worldwide, a Chicago-based provider of digital communications, direct and database marketing.

Plantation, Fla.-based Savvy Penny is providing retailers with its own flavor of mobile couponing solution that company officials say promises to build customer interaction. Shoppers enter their mobile phone number on a screen, and then are prompted to set their phone to Bluetooth discovery mode to receive discounts.

As shoppers approach iPads that are affixed to store shelves, they are prompted to enter the last four digits of their cell phone number. The iPad device detects the phone’s Bluetooth function and then presents shoppers with individual discounts.
While checking out, shoppers are again prompted to enter the last four digits of their cell phone on a dedicated device at the POS. All discounts are applied to the order and printed on the final receipt.

Besides increasing opportunities for customer interaction, mobile solutions are also eliminating expensive processes of managing paper coupons, explains Mariana Quintana, vice president of marketing and business development for Savvy Penny. “By automating the process with digital incentives, grocers are improving the level of service at checkout, and more positively impacting their bottom line,” she says.

Next generation

Among the next generation of mobile solutions will be those that “help shoppers organize their grocery lists, match list items against digital coupons and provide meal idea and recipe inspirations,” explains Nick Jones, executive vice president, retail practice lead, Arc Worldwide. “The key to the success of all of these efforts will also be bringing the solutions to life in retail through call outs and other awareness drivers.”

Some retailers are rolling out apps that can replace POS systems. Quincy, Mass-based Stop & Shop, a division of Ahold USA, recently expanded its mobile POS system to enable shoppers to scan and pay for groceries using an app that they download to their 3GS or 4G iPhones. Called Scan It! Mobile, the app also delivers promotions and discounts as users move between aisles and departments. Incentives are electronically applied when they checkout directly through their app.

“Rather than pick up a portable shopping handheld device when they enter the store, shoppers can now use their personal smartphone,” Motorola’s Riso explains.

The area where mobile retailing will make the biggest impact is merging the online and offline retailing worlds. “A majority of business is still conducted offline, however the online world clearly influences the offline shopping experience,” says Cyriac Roeding, CEO for Shopkick, a Palo Alto, Calif.-based developer of a mobile rewards app that integrates online and offline shopping channels.

A few retailers are already testing the waters. Target, for example, partnered with Shopkick to reward mobile shoppers as they walk in the door.

Vons, a banner operated by Pleasanton, Calif.-based Safeway, and Pepsi recently launched a similar program with Foursquare, a location-based mobile platform. The grocer encourages shoppers to link their Vons Club loyalty card to Foursquare. As mobile shoppers use Foursquare to check in at a store, they can earn reward points and coupons when they purchase Pepsi products.

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