Four technologies to watch in 2012

Mobile POS, digital coupons, predictive analytics and mobile marketing promise to forge stronger customer relationships.

Rising commodity costs, fierce competition and other factors are driving grocers to seek an edge in 2012 and many are turning to technology for a competitive advantage. To attract and retain shoppers in the new retailing paradigm, grocers are using innovative technologies to intimately interact with consumers and deliver a more valuable shopping experience.

The following are four areas where supermarkets are using technology to step up their game:

1. Mobile marketing

More than one-third (35%) of American consumers over the age of 13 carry a mobile phone, according to comScore, a Reston, Va.-based research firm that measures the impact of digital media.

“These shoppers also expect their mobile phones to deliver a seamless shopping experience from their kitchen table or office to the aisle of the supermarket,” says Steve Cole, chief marketing officer of Gladson, a Chicago-based provider of syndicated CPG services.

In hopes of streamlining this shopping experience, St. Louis-based grocer Shop ‘n Save is partnering with St. Louis-based aisle411, a mobile-based store navigation service. Aisle411 helps shoppers plan their store visits and quickly find the merchandise they need. The app
allows shoppers to create a mobile shopping list prior to visiting the store, as well as “add other items to their aisle411 grocery list for a future shopping visit,” says Marlene Gebhard, president of the nearly 50-store chain. While in the store, the app directs them to merchandise on their list.

Shop ‘n Save launched the iPhone app about a year ago, when officials noticed that more website traffic was originating from mobile devices. “This is the perfect solution to support a quick visit to a Shop ‘n Save store, and allows the customer to leave satisfied, which is our ultimate goal,” she says.

Meijer, based in Grand Rapids, Mich., features a similar program with Point Inside, a Bellevue, Wash.-based provider of mobile solutions. Called Meijer Find-It, the app points customers to the location of specific products. The app, which is available for iPhone and Android users, is currently available in 200 stores.

2. Digital coupons

To stay competitive in the eyes of its tech-savvy consumers, grocers and CPG companies are augmenting paper coupons with more innovative promotions, including web-based coupons and those delivered on smartphones, tablets and other mobile devices. In fact, the ability to store digital information, including electronic coupons, on their mobile phone is appealing to 40% of consumers, according to First Data’s 2011 Prepaid Consumer Insight study. First Data is an Atlanta-based provider of merchant processing services.

Mobile coupons and rewards may be garnering attention industrywide, yet some companies still struggle to process them.

“Cashier training remains an issue, especially due to the high turnover in grocery,” explains Paul Stanley, vice president of marketing and product management for Cellfire, a San Jose, Calif.-based digital coupon resource. “If associates are not properly trained in electronic coupon redemption, it could lead to a poor customer experience.”

The need to add optical scanners and upgrade software is another barrier in accepting mobile coupons, say industry observers.

Some supermarket retailers are overcoming these challenges by merging digital coupons with their existing loyalty programs. Grocers, including D’Agostino, Marsh Supermarkets and ShopRite, are partnering with Cellfire to enable shoppers to electronically save their incentives to their loyalty cards.

Through a partnership with Palo Alto, Calif.-based Shopkick, Giant Eagle is also delivering mobile rewards to shoppers who buy specific products from Procter & Gamble, Kraft Foods and Unilever.

Shoppers download the Shopkick app on their smartphone and link it to their Giant Eagle Advantage Card loyalty card. Each time they enter their local Giant Eagle store the apps displays merchandise eligible for rewards. The program, which launched in October, is available across the chain’s 228 stores.

3. Mobile POS

As mobile consumer adoption continues to grow, 62% of American shoppers report that they would use their devices wherever their errands take them, according to a recent study by MasterCard, based in Harrison, N.Y. Stop & Shop Supermarket, a Quincy, Mass.-based division of Ahold, hopes to attract these shoppers with the next phase of its ScanIt! self-scanning program. Called ScanIt! Mobile, the app allows shoppers to use their smartphones to scan their groceries and redeem targeted promotions.

“Any organization that wants to engage with its customers needs to know where they are and how they shop. Mobile is a critical tool for this,” says Suzi Robinson, spokeswoman for Stop & Shop. “We make sure we are engaging them and by focusing on mobile, we can connect with them wherever they are and how they want to be communicated with.”

The evolution of ScanIt! Mobile has been more than a decade in the making. The mobile POS program debuted as a tablet mounted on a shopping cart (and bearing the Shopping Buddy moniker) in 2000. By 2007, the concept evolved into the ScanIt! self-scanning program. Comprised of compact handheld scanners from Holtsville, N.Y.-based Motorola, shoppers used the devices to scan groceries as they picked them off of store shelves.

“As the world began adopting smartphone and mobile technologies, it was natural to evolve the program and augment the ScanIt! offering with an app,” says Robinson. “Smart phone cameras have become bar code scanners, making it a seamless next step.”

Users download the app, which is available for iPhone and Adroid phones, and enter their loyalty card information. Shoppers scan product bar codes with their phones. The app keeps a running tally of their selections and delivers targeted coupons as they enter aisles.

Shoppers using the app then pay for orders at a dedicated self-checkout lane or a full-service check stand.

4. Predictive analytics

Grocers are collecting more data than ever before due to expanding retailing channels and customer touch points. Add in consumer-centric retailing strategies and retailers are finding their existing business intelligence tools are only scratching the surface.

“Companies that focus solely on historic data are finding it difficult to manage new data coming in and be more data-driven when making future decisions,” says Bill Franks, chief analytics officer, global alliance programs for Teradata, based in Dayton, Ohio.

As a result, the industry has a desire to move from “reports, or a series of numbers, to actual insights and recommendations,” says Patrick O’Reilly, president of Applied Predictive Technologies, an analytical technology and consulting firm based in Arlington, Va. “It is an increasing challenge as the volume of data increases, but this is where predictive analytics can help.”

It is no secret that traditional business intelligence tools allow grocers to report what happened yesterday, but “predictive analytics can help you anticipate what will happen tomorrow,” says Diana McHenry, director of global retail product marketing for SAS, a Cary, N.C.-based vendor of business analytics software.

SAS is working with Winn-Dixie to implement the SAS Merchandise Intelligence suite and SAS Customer Intelligence software, will help the grocer to predict buying behavior and identify customers who are at risk of going to the competition, McHenry says.

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