Grocery retailers compete with mobile shopping tools
Shoppers can use smartphones to download deals, scan bar codes, get personalized offers
Steve Neibergall, president of Safeway's eastern division, demonstrates the company's new mobile app in the Canton store. (Barbara Haddock Taylor, Baltimore Sun / June 12, 2012)
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They may have been texting or checking Facebook updates, but now grocery customers could use mobile devices to plan meals, organize lists, download coupons, compare prices, check rewards points, get personalized sale offers and scan bar codes
Mobile technology is the latest front opened by a growing number of supermarket chains in their fight for customers. Many grocers are rushing to offer mobile tools that they hope will differentiate their stores and boost customer loyalty.
On Wednesday, Safeway launched "Just For U," a mobile shopping tool that lets customers use their smartphones for features such as downloading personalized deals to Safeway rewards cards. The Pleasanton, Calif.-based chain, with 30 Baltimore area stores, hopes the savings in time and money will persuade shoppers to visit its stores more regularly.
"This will make it more convenient for people to shop more exclusively at Safeway," Steve Neibergall, president of Safeway's Eastern Division, said in an interview last week. "Everyone is looking for savings and bargains. When people see how much money they can save … they won't feel they have to go to Target or Walmart."
Safeway is the latest chain to offer a mobile application. Giant rolled out a program last year that links to the grocer's loyalty cards and allows customers to access store circulars, download specials to rewards cards and monitor gas reward points. Wegmans, Harris Teeter and Peapod, the online delivery service, have also launched or upgraded mobile shopping tools recently.
Grocers, like other retailers, want to be in the smartphone realm because that's where customers can be found.
"They want to go where the consumer is going, and this is one way they can do it," said Darren Seifer, food and beverage analyst for NPD Group, a market research firm. "Food marketers have a huge opportunity to connect directly with tech-savvy consumers. … Retailers will find ways to find out where the consumer is and connect with them at that point, on phones or tablets or some other device to be invented down the road."
Seifer said targeted marketing, such as Safeway's Just for U program, appears to be a twist on grocers' long-standing frequent-shopper programs.
"It seems as though Safeway [and others] are trying to harness a new technology that goes beyond the physical structure of the store," Seifer said.
Research points to increases in mobile device use when it comes to finding grocery deals, shopping for food and connecting with brands. Coupon apps are used by about 25 million Americans each month, most frequently in households with children, according to NPD's National Eating Trends report released in May.
Another NPD study found that consumers who use smartphone apps say they are more loyal to brand-name items versus private label — another explanation for the flurry of retailers trying to get their names on consumers' devices, Seifer said.
Still, shopping online for food is far from mainstream. NPD found that only 7 percent of consumers shop for food and beverages at least every two to three months on Amazon.com, and that percentage is higher than for grocery sites such as Peapod.com.
While retailers have long tracked consumer trends and behavior, mobile apps link spending history and interests to a consumer's identity. That may be fine, especially if consumers get something tangible, such as a coupon, said Rebecca Jeschke, a digital rights analyst for the Electronic Frontier Foundation, an advocate for privacy and consumer rights in the digital world.
But she warned that "when you are helping retailers or anyone else create a data trail on you … it's important to look at privacy policies and try to figure out who else can get access and if your information is sold or traded.
"There are all sorts of mobile apps in phones, and so many can do cool things," she said. "The question is what do these companies do with this information. Right now, consumers don't have good access to the answers."
The retailers say they are not only following, but staying ahead of, consumer trends.
Wegmans has monitored how customers are shifting from desktops or laptops to mobile devices to access its stores electronically, said Josh Culhane, an application development manager for customer technology in Wegmans' IT department.
The retailer's iPhone app, also available for iPads and iPod touch devices, lets shoppers click items online or scan them at home to build shopping lists. The app also offers access to hundreds of recipes and a way to move each ingredient to the shopping list. The lists are automatically organized by aisle in the store where the customer shops to ease the shopping experience. As customers add impulse buys in the store, they can use their mobile devices to add them to their list, which then can be used to speed check out.