Your iPhone Can Buy Your Groceries

A new iPhone app offers a preview of the personalized, self-service future of shopping.

An iPhone app launching today provides a glimpse into the future of shopping. Created by Modiv Media, the app lets customers scan items while they shop, presents them with personalized offers as they go, and speeds up their checkout. One of the first companies to deploy the app is Stop & Shop, which operates more than 375 supermarkets in the eastern United States.

Cash-register phone: To scan an item using a new mobile-shopping app, a user holds the bar code up to the phone’s camera.

Stop & Shop’s version of the app, called Scan It!, relies heavily on loyalty-card numbers for its smarts. Users install the app, load in their loyalty card by capturing it with the phone’s camera, and then take the phone to the store. The phone’s camera captures the bar codes of items the person puts in a shopping cart and adds their prices to a running total. The user bags items while shopping, thus avoiding having to unload and reload the cart at the register. A store might sometimes have employees perform checks to make sure users are paying for everything in their carts, but for the most part it’s an honor system.

The app uses data from the loyalty card to present offers based on the user’s past purchases and current location in the store. It works in addition to the existing loyalty program, offering savings on top of the deals already advertised on store shelves.

When the user has finished shopping, the app sends information about the contents of the shopping cart to the store’s point-of-sale system. The user can go to any register, scan the loyalty card, and pay for the order.

“The technology in the app puts you in control of the shopping experience,” says John Caron, Modiv Media’s senior vice president of marketing.

Caron says that Modiv always intended to launch a smart-phone shopping device but that until recently phones weren’t able to capture bar codes clearly enough. Instead, Modiv introduced in-store handsets that customers could use to scan items. Now that phone cameras have improved, Caron says, the company has been able to launch its app (which works on the iPhone 3GS and later models). Having the app stored in a user’s phone rather than on a special device lets retailers stay in closer touch with their customers, and vice versa. For example, a customer who’s installed the Stop & Shop Scan It! app on an iPhone can view personalized offers while making a grocery list at home, not just while walking the store’s aisles.

Caron says Modiv hopes its app benefits both customers and retailers—customers save time and get personalized deals, and retailers entice customers with more effective offers and can also employ fewer cashiers.

Retailers new to the system can choose to deploy the technology in both smart phones and in-store handsets, says Paul Schaut, chairman of Modiv Media. He expects some to jump straight to the smart-phone-only option, which will save them money since they won’t have to pay for dedicated devices. “It’s a huge hurdle that just goes away,” he says.

Caron says the app opens up many possibilities for enhancing the shopping experience. For example, Modiv could add features to make shopping more social, such as allowing users and stores to share recipe ideas and the shopping lists that go with them.

However, Schaut cautions, many apps have launched and died trying to offer such features prematurely. For users to actually adopt the app, he says, they’ll want first to have a solid experience with the basics of shopping, such as scanning items and paying. He says Modiv has deliberately focused on building that infrastructure before going on to add features. “Once you have that ‘dwell time’ with customers,” Schaut says, “you can have all these neat scenarios.”

The success and polish of the handset version of Scan It! bodes well for the app’s success, says Mark Beccue, a senior analyst at ABI Research specializing in consumer mobility. “Their first offering is a very good one,” he says.

The handset version of Scan It! launched in 2007. By 2009, Modiv found, customers who used the device spent an average of $7 more per trip and visited the store 10 percent more often than they had previously.

For apps like this, Beccue notes, the devil is very much in the details, and the user’s first experience is all-important. “The consumer’s going to make the decision based on how well it saves time, and if it’s more convenient,” he says. “They’ll try it once and judge based on that.”

Today’s launch of the iPhone app means that retailers can now buy it from Modiv. The app will reach consumers a little more slowly. Stop & Shop is piloting it in certain stores, building on its existing deployment of the Scan It! technology. Caron expects it will be available for general download to Stop & Shop customers by the end of the summer. Modiv is also working on a version for Android smart phones.

Beccue says that Scan It! will be an important indicator of whether consumers are willing to use their mobile devices to expedite shopping, and perhaps even of the future of the “mobile wallet.” He adds, “With a significant chain bought in, it’s going to be a canary in the coal mine telling us how this will go.”

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