Are Consumers Ready for Mobile Grocery Shopping?
Since few shoppers can wait for Amazon to ship their gallon of milk, smartphone usage in grocery stores is an entirely different beast than in big-box and electronic retailers, where the "scan and scram" phenomenon of price comparing runs rampant.
Consumers aren't price checking against the Piggly Wiggly down the street the way they compare the values at Target vs. Best Buy, so mobile apps are popping up as tools for shoppers to find manufacturer deals and make lists as they trawl the supermarket aisles.
"You see more scan-and-scram when you're buying a TV than when you're trying to save a $1 on Kleenex," said Daniel Blackburn, VP-mobile for interactive agency Rosetta's Level Studios.
Sixty-five percent of the 3,500 shoppers in five global markets wanted their cellphones to find in-store promotions, according to Omnicom's survey. Making shopping lists and finding items in stores are also top mobile priorities.
In recognition of this, last month, Catalina, the company that powers loyalty programs for 30,000 stores nationwide (including those coupons at checkout), acquired mobile commerce company Modiv Mobile.
Modiv, now Catalina Mobile, is behind mobile apps in 110 of Ahold USA's Stop & Shop stores in Massachusetts, Rhode Island and Connecticut. Here's how it works: A shopper walks into the store, opens the store-branded app and receives offers based on their shopping history. To skip the line at checkout, shoppers can scan barcodes of items they put into the cart to buy the haul right on the phone. Catalina says the app will be available in 200 more Stop & Shops this summer.
The Ahold partnership predated Modiv's acquisition by Catalina, which operates in more than 85 U.S. chains, including Target , Kroger and Safeway, and distributes coupons for major packaged-goods brands. Catalina reaches 75% of U.S. households across 30,000 stores, said Todd Morris, the company's exec VP-brand development and marketing innovation.
Its focus remains on using mobile to change purchase behavior in stores, rather than warding off online grocers such as Fresh Direct. "Sure, I'll use Red Laser to compare prices on electronics, but no one's going to do that with a box of cereal," said Mr. Morris of the price-comparison app eBay acquired in 2010.
"The whole use case of scanning dozens of boxes of Cheerios to see which is cheaper is a little silly," said Dhana Pawar, director-mobile product management at Coupons.com, which updated its Grocery iQ mobile app this month.
Coupons.com, a behemoth in digital coupons that 's raised $285 million in funding over the past several years, focuses on bringing packaged-goods brands into the list-making process with an app called Grocery iQ. In the first quarter, 71% of shoppers made their lists at home, according to the SymphonyIRI MarketPulse survey.
Shoppers create lists in the app by scanning barcodes or typing in entries, then the app organizes those items by aisle. The most recent update ports coupons into the search tool so that , say, a shopper may add one brand of yogurt to the list over another because Coupons.com offers 50¢ off. Coupons.com reports that Grocery iQ has "millions" of downloads and active users use it three to four times a week. It's also added brand advertising: Hormel has sponsored the meat and seafood tab in the app.
To redeem coupons from the app, users can email coupons to print at home or sync the app with their loyalty cards at participating stores, including Safeway, so savings are automatically deducted at checkout.