Smartphones are starting to fundamentally change the way people shop—and how retailers market to them.
According to the Wall Street Journal, supermarkets have begun to experiment with smartphone-related technology although usage is small and below the levels other retail segments such as consumer electronics are experiencing. For example, one recent study from Deloitte suggested that about one third of shoppers have used their smartphone while grocery shopping, well below the 50% of people who say they have used their phone while shopping for consumer electronics. Not surprisingly, the shoppers who do use their phone in the store use them primarily to manage shopping lists and find coupons and other savings.
The mobile phone is positioned to fundamentally transform the grocery shopping experience by providing shoppers with an always on, always present shopping tool. For brick-and-mortar retailers seeking to grow sales and loyalty using this omnipresent new channel, there are significant opportunities — and risks.
The risk for retailers is that they could eventually lose control of their store floors as shoppers check prices, get coupons, and engage in promotions that are driven by CPGs or third party service providers in ways that are not aligned and perhaps even in competition with retailer’s own sales programs. To turn this risk into an opportunity, retailers must provide mobile experiences that are unique and relevant, and work with savvy partners that make it easier to shop and save by:
- Delivering value not gimmicks. The best mobile apps will provide real value – for example by saving shoppers money, getting them out of the store quicker, helping them find products that fit their health needs, or providing last minute meal ideas at 5 pm with the family at home as dinner time nears. ShopRite for example is already seeing significant engagement with its shoppers by adding digital coupons to its mobile app. Other mobile services that provide interesting stand alone ideas that could be integrated into a broader retailer solution include Modiv Media (self-check out), Pushpins (coupon search at the shelf), HarvestMark (trace where food is grown) and Fooducate (health ratings for broad range of CPG products).
- Engaging shoppers in real-time. Shoppers expect mobile (and really all digital) services to work in real-time – if they download a coupon in the store, for example, they expect it to provide them savings when they check out, even if it’s only a few seconds later. To meet these expectations retailers must provide: 1) real-time connections to their POS in order for shoppers to redeem coupons and promotions (no one wants to be stuck having to print a coupon when they are trying to pay for their groceries); 2) Wi-Fi or other technical solutions to improve typically weak in-store mobile reception. Mobile also provides retailers with the opportunity to engage shoppers beyond the four walls of the store. For example, Tesco has created a virtual store in a subway station in South Korea that lets shoppers use QR codes to order food for home delivery (if you haven’t seen it yet, it’s worth watching the YouTube video).
- Personalizing the shopping experience. Even with newer models, it can be frustrating for shoppers to review a long list of offers or information on their mobile phones. By incorporating purchase, demographic, location, and perhaps even social data, retailers can create uniquely relevant shopping experiences that provide just the right offer or information to reward loyal behavior and deliver incentives to increase share of wallet by buying more of preferred brands and trying new categories, brands, or products. For example, a retailer could provide offers that vary widely based on factors such as whether the shopper is loyal, the time of the day, the location in the store, whether the shopper has children or not, whether they regularly shop the store, etc.
For most grocers, mobile may still be in the experimentation stage. By testing new solutions now, however, retailers can start down mobile’s inevitable growth path, improve the experience for their shoppers, and avoid losing control in the store longer term.