Ten years ago, the rise of grocery shopping via the web was hailed as revolutionizing the retail grocery business. Just click on desired items from your favorite market’s web site, check out by credit card, name a delivery time, and greet the delivery person.
The problem with this approach was that, with warehouse, loading, transport, and driver costs factored in, it ended up costing consumers at least 20 percent more than driving to a store, finding what they wanted at the price they were willing to pay, and checking out with cash. Stores simply passed on their increased overhead costs to shoppers. And web-based delivery services weren’t terribly different from how our grandparents just phoned in an order to a local grocer.
Changing the Way Retail Functions
But today, innovative grocery chains are adding mobile, analytics, intelligent processes, and Fast Data to the formula to provide considerable savings to customers via in-store scan-and-buy programs—and they have real green to show for it in return. As an example, Gartner featured an innovative context-aware shopping program from Boston-based Stop & Shop last week in its keynote at the Gartner Business Process Management Summit in London.
Gartner cited the Stop & Shop app as an example of context-aware grocery shopping that has employed the Internet to disrupt traditional business processes. This app provides an example of how consumers are willing to trade personal data (their shopping habits) in exchange for convenience and savings. Gartner VP and Distinguished Analyst Daryl Plummer illustrated how the chain’s free shopping app for smartphones allows shoppers to scan items as they put them into their baskets, then pay via credit card within the app to avoid the checkout line.
Beyond the immediate convenience to shoppers, Plummer explained that Stop & Shop’s app allows the chain to make real-time offers to shoppers for commonly purchased items—such as two-for-one deals or heavy discounts on particular brands—in the moment, when shoppers are far more likely to accept such offers, therefore increasing the size of their overall basket purchase. Century-old Stop & Shop runs more than 375 supermarkets throughout the Northeastern US.
Consumer Information Reborn
Plummer predicted that by 2017, 80 percent of consumers will collect, track, and barter their personal information in exchange for convenience and cost savings.
“The Stop & Shop app embodies three of the four Gartner Nexus of Forces: mobile, cloud, and information,” explained Plummer. It’s a mobile gateway to engagement and provides real-time response via the cloud. And by analyzing and matching shopping patterns to individuals, it leverages stored and real-time information to deliver the right offer to the right consumer in the right context at the right time.
The app also converts centuries old business processes within grocery stores into an intelligent business process where data feeds kick off extending special offers based on each shopper’s buying patterns, as well as other predictable factors, such as shopping for holiday meals or imminent storms approaching a community.
Fast Data Keeping Up While You Shop
Context-aware shopping is also a striking example of Fast Data in action. Behind the app are systems that capture, correlate, and analyze data on thousands of individual items in hundreds of stores, as well as the shopping patterns of thousands of app users who’ve opted in for the convenience and savings. Those same systems deliver real-time, in-context offers that are far more likely to work when received while the shopper is scanning shelves for the best bargain than when sitting at home perusing a coupon book.
Fast Data is the actionable side of the big data challenge, where the timeliness of data is being captured and employed, rather than just its size, speed, or variety. Today, streaming data flows are being profitably harnessed by thousands of companies like Stop & Shop in hundreds of vertical markets.
While context-aware in-store shopping is still in its infancy, Plummer reported that Stop & Shop has already seen a 10 to 15 percent increase in the quantity of groceries purchased per an app user’s visit, and a significant increase in active engagements with customers that reinforce brand loyalty and repeat visits.
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