Is the 21st century destined to enhance high-tech supermarkets? In the future, trips to the grocery store may no longer be an ordinary, begrudged errand thanks to new technologies that aim to make supermarkets a breeze, more interactive, and more cost-friendly.
Here’s a glimpse of the future: Automatic checkout enables customers to gather radio-tagged groceries and simply walk out the store, as the tags are read by a scanner on their way out, and their credit card is automatically charged. Self-serve scanning offers in-store scanners that allow shoppers to ring up each item’s purchase as they walk through the store, making the checkout line a thing of the past. Mobile app Aisle411 enables mobile phone users to locate the precise aisle location of an item and plan their whole shopping list throughout the store.
While some of these technologies are most likely years away from widespread adoption, one new technology is seeing more growth in grocery stores across the country: targeted location-based marketing.
The shift to mobile
Day-to-day research, particularly when it comes to shopping and finding local businesses, has switched to mobile in a big way. Because smartphones connect to the Internet and apps and can be toted everywhere, smartphones now also play a major role in consumer shopping.
According to a comScore report, “smartphone shoppers” make up 79% of total smartphone users (at an estimated more than 159 million just in the United States), and 84% of smartphone shoppers bring their mobile phones into stores to use while browsing and buying. These statistics prove that there is an enormous opportunity for retailers to capitalize on the new era of mobile shopping.
Benefits of location-based marketing
Location-based marketing offers grocers a chance to connect with customers who are already nearby or entering the store and who could be potential customers. This type of connection is more than a quick smile or “hello” in the aisles. It reaches people in a way that potentially fulfills their needs or desires and makes their experience in the store better or easier. Customers love value and convenience, and location-based marketing has the power to do both.
With location-based marketing, grocers aren’t focused on driving people to the store. Instead, this form of marketing aims to drive sales from customers who are already in the store using beacons that connect directly with customers’ mobile devices.
How supermarkets can use location-based marketing
Grocers have several ways they can employ location-based marketing in their stores:
As one of the most common and popular uses for location-based marketing, couponing takes on an entirely new face and function in the mobile era. Instead of clipping coupons from the newspaper, customers can have coupons targeted to them based on what store they enter or even where they are in the store. According to eMarketer, in 2014, approximately one in four mobile users was predicted to use a mobile coupon, and that number is growing each year.
Direction to promotions/discounts
Similar to offering coupons, location-based marketing can simply highlight a current promotion or discount. For example, when a customer using the Donky app walks into the produce department, he or she might receive a message advertising a sale on apples. Now that the customer knows about the promotion, he or she might stroll over to the apples and pick some up, which he or she might not have done before. This helps to personalize the customer's experience and may boost sales for the store due to the targeted ads that location-based marketing provided.
Increased store app downloads and engagement
If a grocery store already has its own app, it may be one step ahead of many of its competitors who haven’t yet embraced the mobile shopping movement. Wegmans' app, for example, uses a tool that is similar to but not exactly the same as location-based marketing. The app has a built-in shopping list function that helps customers find the items they need by organizing them by the aisle of the store that the products are located on. If customers have good reason to download and use a store’s app, the more likely they are to download and engage with it.
Who’s already using location-based marketing
The time for location-based marketing in grocery stores has already arrived, and some of the country’s major chains are integrating the strategy into their locations. More than 200 Safeway and Giant Eagle stores had iBeacons, which connect to iPhones, installed by location-based marketing firm InMarket starting in January 2014. Tesco and Waitrose, two leading U.K. supermarkets, started trials of iBeacon some months later in 2014. Duane Reade announced last year it was outfitting some of its stores with iBeacons.
As mobile phones integrate with more facets of life, becoming an inseparable part of the grocery store experience may not be long in the future. With many stores already taking advantage of this promising technology, it’s only a matter of time before grocery stores and customers begin connecting on a cellular level.