Personal Shopping Devices Preparing For Tipping Point
In Adoption In 2009
By John Gaffney
From Retail Touchpoints, September 11, 2008
Personal shopping devices for consumers are reaching
their “tipping point.” With at least one high-profile retailer
signaling success with an initial test, experts say 2009 could be the
beginning of the handheld device era for grocery, warehouse clubs and
pharmacies.
That retailer is Stop & Shop. As a strong regional
supermarket chain with a lot at stake in its current rebranding effort,
Stop & Shop could have focused on any number of changes to call
attention to itself. It shows some confidence that in addition to its
new logo, color palette and employee uniforms, Stop & Shop’s
publicity effort is highlighting its personal shopping devices.
Called Easy Shop, the device allows consumers to scan,
track and bag their purchases as they shop. The software application is
provided by Modiv Media; hardware is from Motorola. All parties in the
Stop & Shop initiative are playing business models close to the
vest. However, Modiv Media’s new CEO Paul Schaut says “we are
absolutely saying that we can influence key metrics. We’ve proved that
for the last eight months.” Among those metrics Schaut is willing to
prove to potential clients: Larger basket size for grocery retailers,
higher purchase levels for time-pressed shoppers, more total trips to
the store, and higher coupon redemption rates.
The universe of consumer-facing handhelds at retail is
still small. According to Retail System Research analyst Paula
Rosenblum, it is in the “early adopter phase.” However, employee facing
handheld devices and consumer facing devices are ranked numbers two and
there by retailers as opportunities fro improving the in-store customer
experience. The Stop & Shop rollout is one of the only high profile
consumer handheld retail applications. The question is how to drive its
success to more chains, and increase the awareness of its capabilities
to more consumers.
“The challenge is right now to get these devices into
stores,” says Schaut. “I’m very confident that they will be of huge
value to retailers, consumer packaged goods companies and consumers.
They’re very logical and they provide new touchpoints within the
store.”
If they do achieve widespread adoption, retailers should
be prepared for handheld devices to affect two key areas. The first is
in-store marketing: After signing into the system, targeted marketing
programs can be easily sent to consumers based on their past purchase
behavior and even their position in the store. That screen can produce
coupons for suppliers as well as retailers. It also creates a situation
in which in-store marketing becomes competitive. The “at shelf”
decision to buy a certain toothpaste, for example, can be disrupted by
a wireless message from a competitor.
“When they buy on the Internet consumers are used on
having a lot of data at their fingertips,” says IHL: retail analyst Lee
Holman. “The handhelds bring that data into the store. You can compare
promotions. You can compare competing offers.”
The second is loyalty programs. Motorola industry
solutions principal Scott Moreland believes cross-channel retailing
will be greatly impacted by handheld devices. He believes loyalty
programs, in particular, will be enhanced. Consumers can join the
programs more easily, enter recent purchases, see their loyalty point
accrual in real time and redeem them immediately.
The business model for the retailer-handheld supplier
relationship is starting to get some attention, and attract some
controversy. Off the record, suppliers say that many retailers want to
have a skin in the handheld game. The “skin” model would mean that
suppliers charge retailers very little per unit, and then share a
percentage of purchase revenue with the supplier. The straight model
would sell the handheld units for full-price, and have no claim on
revenues gained by having the handhelds in store. Suppliers would
rather see the straight model.
The wild card in the evolution of personal shopping
devices is the involvement of CPG companies. Technologies have advanced
to the point where a cola brand could alert a valued customer when they
come into the store that a sale is on. It could send coupons via the
wireless device. It could also send an ad for another brand, and then
capture the customer data from registered information. Retailers will
want a share of that revenue if it’s called advertising. Hardware
suppliers and software solution providers will want to be involved in
selling those deals.
To that end Modiv Media recently added Microsoft’s Atlas
AdManager to its Modiv Shopper 1.0 and Modiv MediaHub platforms. The
Modiv platforms were designed to enable campaign management and media
delivery based on scan-and-bag activity. Atlas AdManager expands those
targeting opportunities to include media delivery based on real-time
activity in-store. For example, a shopper buying hot dogs can now be
delivered a message to "remember to buy the ketchup," accompanied by a
branded discount. That kind of targeting will be hard to resist for CPG
companies, according to Schaut.
“For the future I think this will be an evolution
rather than a revolution,” says Schaut. “Retailers need to know that
they can make more money through more sales, increase the amount of
data they generate for each customer and potentially provide some very
valuable impressions for advertisers.”
Direct Link: Retail Touchpoints
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