New Mobile Devices Help Keep Customers Happy -- And Spending Their Money

Shaving Time Off the Weekly Grocery Run To Keep Consumers in Stores and Spending

Wall Street Journal
By Ann Zimmerman

A device that looks like a smartphone is making supermarket shoppers—and stores—happier. Perched on the handle of the shopping cart, it scans grocery items as the customer adds them to the cart.

Shoppers like it because it helps avoid an interminable wait at the cashier. Retailers like it because the device encourages shoppers to buy more.




With the system called Scan It—in use at about half of Ahold USA's Stop & Shop and Giant supermarkets in the Northeast—shoppers scan and bag their own groceries as they navigate the aisles, while a screen keeps a running total of their purchases. About a dozen times per shopping trip, the device lets out a "Ka-ching" as an electronic coupon appears on the screen. "Last week, right after I scanned coffee, I got a coupon for coffee creamer, which I needed," says Patty Emery, a Caldwell, N.J., dental assistant, who estimates she shaves 20 minutes off her weekly grocery shopping trip at Stop & Shop. "It is really cool."

Stores have been under siege in recent years, not just from the rise of online shopping but also from the way mobile phones empower people to compare their store's prices, item by item, with a rival store nearby. Now, stores are fighting back with their own mobile technology.

Shoppers who use the Scan It system spend about 10% more than the average customer, says Erik Keptner, Ahold's senior vice president for marketing and consumer insights. He attributes this to targeted coupons and the control consumers feel while using the Scan It (actually, Ahold calls it "ScanIt!") device.

Nordstrom is issuing mobile devices that workers on the sales floor can use to scour the company's inventory for a garment in a size a customer is requesting. The shopper pays on the spot, with no need to locate and wait at a cash register.

Home Depot, encouraged by strong customer and worker feedback during a trial in the fall, outfitted each of its approximately 2,000 U.S. stores with contraptions called First Phones. The tricked-out, Wi-Fi-enabled phones work as inventory trackers, walkie-talkies and cash registers.

Scan-as-you-go mobile devices are a logical next step after the self-checkout lanes that are now common in big food and drug chain stores. When finished selecting items, Scan It shoppers either go to a self-checkout station to upload their bill and pay, or hand the device over to a cashier—options that could, of course, involve waiting in line.

Ahold says dedicated self-checkout stations for Scan It users are becoming more common as the devices become more popular. In such cases, wait time, if any, would be short because customers have already done the time-consuming chore of scanning and packing up groceries.

If shoppers scan an unwanted item by accident, they simply select "Remove" from the menu option, scan the item again, and it is removed from the cart. The total is updated.

Patrick Bearden, a salesman at a Home Depot in Dallas, used a First Phone to rescue several sales on a recent Saturday. A customer needed six seat cushions for an outdoor dining set; the store had only three. In the past, Mr. Bearden would have had to walk to the front of the store and look up available inventory on a personal computer. But using the First Phone device, he knew within a few seconds that the cushions were in stock at a nearby Home Depot. He told the store to hold the items until the customer arrived.

Retail experts predict the new retail gizmos could eventually bring about the end of traditional cash registers.

More retailers are likely to adopt the type of mobile checkout stations pioneered at Apple stores, which use portable tablets equipped with credit-card readers. And as more customers load their smartphones with debit, credit and loyalty card information, more stores will adopt streamlined checkout technology.

If the technology takes off, it could become a new opportunity for stores to shrink payrolls. For now, though, most say they see it as an opportunity to free up workers to provide more customer service.

Mobile checkout technology also might seem to invite shoplifting. Ahold says it spot checks customer receipts to deter shoplifting and so far hasn't found much of a problem. Leslie Hand, an analyst at IDC, an information technology research firm, says research indicates that losses from shoplifting by mobile checkout customers are far less than losses from cashiers who ring up prices incorrectly.

Mobile devices that don't accept payment don't pose a separate risk to shoppers' credit cards and identity security. As for systems that do take payment, risk is minimized if they are handled only by store employees. Of course, unless payment devices are kept under lock and key, there is always some risk of tampering, says Avivah Litan, payment analyst at Gartner Research.

Stores have good reason to fight back hard against Internet retailers on convenience. A recent National Retail Federation survey on customer service ranked Internet retailers in the top five spots, with Zappos.com ranked No. 1 and its parent, Amazon.com, ranked No. 2.

Ms. Emery, the Stop & Shop shopper, says she has shaved 20 minutes and 5% off her weekly shopping trip, which now clocks in at an hour and $200.

Last year on Black Friday, the discount-fueled shopping derby that starts before dawn on the day after Thanksgiving, Target Corp. tested rapid check-out services at stores near its Minneapolis headquarters. In its Bloomington store, where every front register had at least 12 shoppers waiting, Target moved a mobile checkout station to the busy electronics department, with a clerk waving a scanning gun at product bar codes and ringing up sales on a tablet-like computer with an attachment to read credit cards.

Brittney Watters, who had arrived at the store at 3 a.m. and had two GPS devices and several toys in her cart, appreciated the speed. "It works well," she said. But there can be hiccups: The scanning gun sometimes stopped scanning, slowing the process down.

Retail experts predict that before long most of these mobile shopping gadgets will be supplanted by customers' own smartphones. Ahold is testing a way for customers to download Scan It software directly into their own iPhones and is exploring ways for customers to use smartphones to pay. Starbucks is already taking steps toward a digital-wallet model. Sam Stovall, a Dallas computer software consultant, bought a Starbucks gift card and entered its number into the Starbucks app on his iPhone. Each morning, after placing his order, he calls up the bar code on his phone and flashes it in front of a scanner. A second later his phone tells him how much is left on his card. "If it was up to me, I would pay for everything with my phone," Mr. Stovall says.

Be Your Own Cashier

New devices aim to make shopping smoother and speedier

Scan It

Where: Stop Shop and Giant stores in the Northeast

Why Shoppers Like It: Customers scan and bag groceries while they shop, getting targeted coupons and a running tally.

Be Advised: Can be cumbersome to use. The company says shoppers spend more.


First Phone

Where: Home Depot

Why Shoppers Like It: Workers use it to track inventory, check prices and check out purchases.

Be Advised: The devices may not receive signals outside the store—a problem when used in product displays in the parking lot.


Starbucks Mobile Payment

Where: Starbucks

Why Shoppers Like It: No need to carry wallet and credit cards, or wait for a paper receipt.

Be Advised: The transaction doesn't provide a way to leave a tip. Money remaining in the account isn't available for use outside a Starbucks.


Mobile Checkout

Where: Nordstrom and test locations at Target

Why Shoppers Like It: Various devices enable stores to add an extra register on the selling floor where needed.

Be Advised: The machines can have glitches, and shopping bags may be hard to dispense.