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Few digital solutions embody the digitally connected consumer more than one of this year’s Progressive Grocer Tech Technology Innovation Awards winners, Ahold USA’s Scan It! Mobile app, which took the prize in the In-store/Mobile category.
Indeed, the fact that we needed to merge two previously stand-alone technology categories (in-store and mobile) for this award shows just how much digital technology has infiltrated the path to purchase, beginning inside the consumer’s home, continuing while she’s on the go, and culminating with the final transaction inside the store itself.
“A lot of the planning prior to a shopping trip happens outside of the store, such as meal planning and shopping list creation,” says Rebecca Kane, VP of customer-specific marketing and digital at Quincy, Mass.-based Ahold USA. “With the Scan It! Mobile platform, we are creating that connection before the shopper enters the store, and then making it easier to shop once they get inside.”
According to Kane, there are two key reasons the app has seen strong adoption. First, it gives the user complete control and visibility into the shopping trip. On top of this, it provides special offers that users wouldn’t otherwise receive. “We do about 4.5 million offers per month, and so there is a lot of extra value to the customer in addition to the value of using the tool to help improve the shopping experience,” she says. “Redemption rates are actually higher than typical coupons, because you’re actually at the point of purchase, and so they are very relevant to the shopper.”
The current version of the Scan It! solution, available in more than 400 Stop & Shop stores, combines mobile scan-and-bag with loyalty and personalization functionality, and is seamlessly integrated with the banner’s point-of-sale system.
The Scan It! mobile app is the latest iteration of a program that started more than a decade ago, involving a touchscreen device that slid into a carriage on a shopping cart and included a built-in scanner. Over the years, the hardware decreased in size and increased in mobility to hand-held scanners (which are still in use at participating stores), and ultimately placing the hardware — and its capital expense — in the hands of the consumer in the form of a mobile app that shoppers use on their own mobile devices.
“The two big differences between the original Shopping Buddy system and where we are today with the mobile app are the capital expenditure for the retailer, and adoption by the shoppers,” says Mike Grimes, SVP of mobile commerce for St. Petersburg, Fla.-based Catalina Marketing, which developed the Scan It! Mobile solution with Ahold USA. “Back then, as it was, it still had a six-figure capital expense for the retailer per store. Now, it’s a few thousand bucks to implement the app. And the adoption, which is critical, has probably tripled from back then, due to the convenience and usability of the app, and the savings shoppers get along with it.”
The Scan It! Mobile app consists of three main components: The self-scanning module, which enables the shopper to scan and keep a running tally of the items she purchases; the media component, which is the interface to the shopper through which the personalized offers are delivered; and the audit function, which consists of the process and algorithms that were developed to prevent theft via the system.
The basic self-scan component of the app gives the shopper’s phone virtual register capability via an API in the point-of-sale controller. It’s what enables the shopper to scan product bar codes and retrieve the pricing information from the POS over the store’s Wi-Fi network, including any pricing logic around promotions, coupons or other specials.
According to Grimes, it’s the presentation of this information to the shopper that makes the app so effective and has resulted in the spike in adoption. “If the presentation of the price and the management of the cart don’t flow like all the other apps on my phone, then I’m going to be very annoyed,” he says. “When you are inside a store shopping, you have a very low tolerance for anything that is inconvenient or annoying. So if it’s on the iPhone, it better look and feel like my other iPhone apps; if it’s on an Android phone, it better look and feel like an Android app.”
There are two types of media that get delivered to the shopper: pre-targeted offers based on the shopper’s purchase history, and offers based on the shopper’s real-time location in the store.
“The pre-targeted offers are inserted into the customer’s offer wallet,” notes Grimes, “so they open up the app and may find eight offers in the offer wallet that are based on their purchase history. During the trip, we know where you are the store, so if you have an offer for cranberry juice, when you’re in the juice section you’ll get a reminder — just one because we don’t want to overdo it — but people really appreciate these reminders, especially since usually their No. 1 goal while in the store is getting out of it, and sometimes they might overlook coupons.”
Striking this balance between delivering relevant promotions and not interfering with the shopping trip has led the grocer to adjust the types of messaging the customer receives during her trip through the store, with the messages toward the beginning of the trip leaning toward the promotional, while those pushed during the trip are more practical. “When they are shopping, we have to be a lot more functional and make sure we are helping them through the trip, whereas at the beginning of the journey, we can remind the shopper of some of the offers that we have available to help her prepare,” explains Kane.
The system also has the ability to tailor these real-time alerts to specific dietary needs, such as for shoppers interested in gluten-free foods or who are on restricted diets of some sort, such as low-sugar or low-salt regimens.
For the participating Ahold USA stores, approximately 6 percent of transactions are logged in via the Scan It! devices or the Scan It! Mobile app, and 10 percent of those stores’ shoppers use the systems on a regular basis.
No Gaming the System
While one might think that such a self-scanning system — with shoppers tallying their own orders and checking out themselves — would invite theft, the solution has a sophisticated set of algorithms and random audits developed to keep folks honest.
“The audit is a points-based probability algorithm that is very sophisticated,” says Catalina’s Grimes. “It figures out from audit history and real-time behavior which shoppers we need to keep an eye on.”
According to Grimes, 98 percent of shoppers are honest and competent in using the system, and audits on these customers are infrequent. Approximately 1.5 percent of shoppers are honest but not competent in using the system, and these people are audited more frequently in an effort to help them learn to use the system better. Then there are the 0.5 percent of users who always try to steal, and these individuals are audited all the time, he says.
“The system is very good at figuring out who is who,” he points out. “For example, one regular shopper usually spends $80 in a 35-minute trip, but just spent an hour in the store and only spent $20. That is a trigger for an audit. There are a lot of real-time components to the audit. And it’s very customized, not just to the retailer, but to the store and the store manager as well. You might tell it not to audit anyone on a particular winter day between 10 and noon because it’s snowing and the store will be mobbed. You can adjust things in accordance with the need.”
As the solution continues to evolve, Kane expects the level of personalization and relevance to keep growing. “The Holy Grail of loyalty is that when somebody walks into the store, you would immediately know who they are as well as their needs, and you can immediately engage them in a personal way,” she says. “This solution is a step closer to that.”