$142.5B 2015 U.S. ad spending for 200 LNA
If investor and brand interest in grocery shopping apps and data is any indication, they're betting there's a true shift in the way everyday consumers employ mobile tech while shopping.
InfoScout, a shopper-research firm fueled by mobile shopping apps has closed a $16 million Series B funding round. The firm will use some of that cash to buy grocery shopping app Out of Milk to bolster its access to supermarket purchase data.
For years food brands have nurtured and harvested crops of data in the hopes of uncovering new kernels of information about grocery shoppers -- information grocery retailers have historically hoarded. Now they're investing in new technologies that circumvent the sellers and go straight to consumers for data on who's buying what and where.
Even before the mobile shopping-app explosion, CPG brands had a variety of data sources showing information about product purchases and shopper demographics as well as helping connect dots between promotions, ad campaigns and sales. But brands still complain about not having enough insight into who's buying their stuff and why or how their products fit into the larger shopping cart of purchases. They also feel they're not getting data fast enough.
For example, a CPG manufacturer might have access to data showing a brand promotion resulted in a sales lift, but still have no idea whether the campaign attracted new buyers or brand loyalists who simply stocked up.
"The retailers weren't sharing any data that would allow for that," said Jared Schrieber, co-founder and CEO of InfoScout, the first company funded by seed-stage investor Dunhumby Ventures. InfoScout's first funding round last year totaled $13 million. The company counts Unilever, P&G, PepsiCo and Anheuser-Busch among its clients and gathers data derived from around 55,000 actual shopper receipts each day, up from 7,000 in December 2012, according to InfoScout.
Bain Capital Ventures, Horizon Partners and MHS Capital participated in the recent round of investment in Infoscout.
Until now, InfoScout has relied on consumers who use two shopping apps, Receipt Hog and Shoparoo to scan their grocery receipts in exchange for cash back and other rewards like donations to a school of their choice. Now it will add Out of Milk data to its information pool.
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Because the apps work with receipts from any retailer, weekly reports can give market-share data and help brands uncover markets where they might acquire new customers. For instance, a CPG manufacturer could learn about customer segments who purchased a specific fabric softener, in addition to how many people bought it at a different store -- the idea being to help brands determine where there's overlap and where there's opportunity to attain new customers.
Nielsen has offered data collected from consumers in its panel who use handheld scanners to archive their purchases, and layers on point-of-sale data from retail partners. Meanwhile, another new data provider, Gigwalk, uses mobile tech to fill in retail information gaps for brands on the backend. The company deploys troops of secret shoppers in stores, where they inspect product inventory on shelves or check prices, and get paid to submit the information via the Gigwalk app.
Mondelez, maker of products such as Chips Ahoy and Ritz Crackers recently expanded a mobile shopping-app test with mobile tech firm Checkout 51 from Canada to the U.S.
"It made a lot of sense to continue to partner and scale across the border," said Laura Henderson, Mondelez's associate director-media and communications in the U.S. Checkout 51 grabs data from receipt scans but unlike the apps InfoScout gathers data from, it offers discounts on a set of products each week. The app also works on receipts from any retailer, collecting historical data on past purchases, and targeting offers based on that information.
"We were built from the ground up as a data and analytics company," said Noah Godfrey, Checkout 51 founder. Still, he said the company does not have plans to sell aggregated data to brokers, and will stick with providing custom reports to clients like Mondelez. "We don't see ourselves as just another company that's going to sell data and be a firehose for data," he said.
While Mondelez can access shopper data from elsewhere, such as what people bought along with its brands, said Ms. Henderson, "[Checkout 51] can actually show incremental sales. This is a really consistent measure…. We get the same level of information across our brands."