Stop & Shop·s Scan It! App The grocery store and supermarket shopping industries have combined annual revenues in the hundreds of billions of dollars. Just food and beverage sales in the United States (U.S.) brought in $600 billion in revenue in 2014. Grocery shopping was a highly commoditized industry with over 85,000 stores in the U.S. at that time. With little variation in available item selection and less money being spent on groceries in the down economy, competition for customer loyalty continued to grow. By – using business analytics to help process buying habits of its customers, Stop & Shop, a Quincy, Massachusetts-based grocer, tried to get a better grasp on the hard-to-understand concept of customer loyalty in grocery shopping. 27 Thomas Stewart, “The Case Against Knowledge Management,” Business 2.0 (February 2002), 81, http://providersedge.com/docs/km_articles/fhe_ Case_Against_KM.pdf (accessed September 7, 2015). flll Business Intelligence. Knowledge Management. and Analytics In 2009, Stop & Shop introduced Scan It!, a portable electronic device for customers shopping in its stores. The device allowed customers to “scan and bag” products, expediting checkout times at the end of their shopping trip. Additionally, the device offered deals based on the location of the scanner (and therefore the customer) in the store. Location-specific discounts in real time became increasingly popular among customers as use of Scan It! grew by IO% in both the first and second quarters of 2009. The most beneficial aspect of the Scan It!, however, came with the powerful analytics software built into the device by Modiv Media in which Stop & Shop owns a minority interest. The software kept track of each customer’s purchasing habits both past and present in order to individualize coupons in real time for the customer. The scanner resulted in three positive trends for Shop & Stop. Customer loyalty grew, allowing the company to secure an increased customer base than area demographics would predict. Additionally, each shopper’s basket size increased as the individually tailored coupons enticed customers to buy more. Lastly, Shop & Stop’s customer base grew as word of mouth marketing brought in more customers to try the state-of-the-art device. However, after a couple of years, Stop & Shop saw customer adoption plateau. In October 2011, the grocer created the Scan It! app for the iPhone and Android. By eliminating the need to sign in and retrieve a scanner at the store, customer adoption of the device continued its upward climb. Additionally, as customers became increasingly concerned about saving money while shopping, Stop & Shop built in budgeting software to allow customers to track their spending more effectively. Ads for the new app proclaimed, “New Mobile App Allows Customers to Shop, Bag, and Tally Their Grocery Order with Their Personal iPhone® and Android Devices.” Scan It! was heralded as “a first of its kind grocery app that allows customers to use their personal mobile device to scan, tally, and bag their groceries while they shop.”28 Stop & Shop had bundled an app that not only rewarded customers who shopped at its stores by helping them save money but also tracked information on sales, which the company loaded into its data warehouse and used to understand its customers. Analytics then helped Stop & Shop put the right items on its shelves to maximize sales and create customer loyalty.
1. What is the benefit of the Scan It! data to Stop & Shop? What are some of the questions the company could answer about its customers?
2. How would you assess the level of capabilities of Stop & Shop’s use of analytics? What might the company do differently with the data to gain more value?
3. What is the benefit of Scan It! for the customers? What concerns might shoppers have about their privacy? How would you advise Stop & Shop management to respond to these concerns?
Sources: Adapted from http://www.internetretailer.com/2011/10/26/stop-shop-expands-availability-scan-it-mobile-app (accessed September 6, 2015); http://stopandshop.com/shopping/shopping-tools/scanit/ (accessed September 6, 2015); http://southeastfarmpress. com/vegetables/supermarket-guru-seeking-next-big-trend (accessed September 6, 2015)
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