Supermarkets add mobile to the shopping list
Grocery shopping seems like a great fit for mobile because it enables consumers to always have a shopping list and coupons handy on their smartphones. However, while supermarkets have moved slowly into mobile so far, there are signs this is beginning to change.
The number of grocery retailers with a mobile presence increased 110 percent in the first half of 2012 as these merchants, according to MyWebGrocer. While the increase is off of a small base and many of these are tests, more grocery retailers are expected to jump into mobile this year and next.
“There’s been huge growth this year in grocery retailers building a mobile presence for the first time,” said Rebecca Roose, senior product marketing manager at MyWebGrocer, Winooski, VT. “We noticed a big spike in Q1 2012 – there’s been a 110 percent increase in grocery retailers with a mobile presence year-to-date over 2011, and that’s just in the past six months.
“Most supermarkets have not adopted a mobile presence yet and the majority of those who do have the basic mobile features,” she said.
“Mobile is different from any other tools they have offered so it’s a learning curve for them. And many retailers take the approach of ‘set-up and forget it,’ launch an app but never update it.”
Mobile shoppers spend more
In a competitive space such as grocery retailing, where margins are around two percent, mobile can provide supermarkets with a direct connection to customers as well as opportunities to acquire and retain new customers if they provide strong value.
As a result, grocery retailers are able to build stronger loyalty ties with customers and, ultimately, drive increased sales.
“On our platform, we know that mobile shoppers spend 68 percent more than in-store shoppers and those mobile shoppers will build a shopping list based on things that are on sale that week, they become more loyal – they’re not going to shop anywhere else,” Ms. Roose said.
“Mobile shoppers want content that will save them time and money, they’re looking for an app to bring convenience and make their life easier,” she said.
“Smartphones are the most accessible devices, so retailers need to be present there. If a retailer doesn’t have a mobile presence, they’re missing an opportunity.”
Grocery retailers increasingly are recognizing that one of the key ways they can drive loyalty via mobile is not with a cookie-cutter approach but by bringing meaningful, personalized services.
Such personalization can be a challenge at scale, which is why there have not been a lot of examples to date.
With mobile, there is an opportunity to use loyalty data, purchase behavior and in-store location services to personalize the shopping experience in a way that drives value for both the grocer and the shopper.
For example, grocery retailer Ahold has a mobile shopping app called Scan It! that is available at 270 Stop & Shop locations in the Northeast. The app, which combines personalized offers, mobile self-scan and bag, and express checkout, helped boost the chain’s loyalty and drive an increase in sales, per John Caron, vice president of mobile at Catalina Mobile, St. Petersburg, FL.
Additionally, Brookshire’s offers users of its mobile app and mobile site a way to get personalized rewards based on their shopping habits every time they engage with the app or site.
The grocery chain saw a huge increase in visitors and new acquisitions when it launched the personalized reward features, per Ms. Roose.
“With shoppers ignoring 98 percent of the SKUs in a grocery store, personalization has an even greater importance with mobile,” Mr. Caron said.
“Bombard me with irrelevant offers and I’ll shut off,” he said. “Engage me with smart offers that are tailored to my needs and buying behavior, and I’ll reward you by spending more. And, in grocery, that’s where you win.”
Driving regular app usage
More grocery retailers are likely to follow Brookshire’s and Ahold’s example in the coming months and introduce a wide array of mobile functionalities.
“While they are the only one with a mobile commerce app, other grocers are not far behind them in adding functionality such as instantly-usable coupons, in-store navigation, geo-fencing, shopping lists and more,” Mr. Caron said.
“Grocers have quickly learned that basic things like store finder and non-actionable circular are nice, but they don’t drive repeat – and frequent – usage,” he said.
“Over the course of the next year, you will see more utility driven into grocers’ apps as they look to add features that drive regularly usage – two or more times per week.”
One of the biggest challenge grocery retailers face in mobile is scale, as customers make frequent trips to their grocery store and are expecting up-to-date and fresh mobile content each time.
If grocery retailers do not get it right, they risk losing these valuable customers.
Another challenge grocery retailers face is deciding upon the best mobile products and services to offer their customers.
In some cases, purchasing groceries via a mobile handset may not be what customers are looking for.
“We need to remember that supermarkets and grocery buying is a very different mindset than other retail environments,” said Joy Liuzzo, president of Wave Collapse, Washington.
“For example, Wave Collapse’s research last quarter showed that consumers are as hesitant to purchase groceries on their mobile as they are to buy insurance and financial products,” she said. “That tells me that supermarkets cannot and should not take the same approach to mobile as other retailers.
“Consumers are using their apps to look at circulars, find promotions and coupons and do price comparisons.”
Another challenge facing retailers is integrating mobile into all of their other initiatives.
“It’s not enough to have a few QR Codes throughout the store or to develop a mobile app, the supermarkets need to plot out how mobile will flow through all their current touch points,” Ms. Liuzzo said. “Getting the integration right will give supermarkets one of their biggest opportunities – repeat and loyal shoppers.”
Chantal Tode is associate editor on Mobile Commerce Daily, New York