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An introduction to in-store supermarket apps

Background

Many retailers are now offering in-store supermarket apps to improve the CX (customer experience). This quick blog explains why supermarkets are investing in in-store apps. Key points include changing shopper behaviours and supermarkets embracing technology.

The Progressive Grocer (3 Retail Trends Impacting Grocers in 2020) article highlights that Interactive Apps will be a retail trend to impact grocers in 2020.

Online supermarket sales

In most developed markets shoppers have had the option of ordering groceries online for approximatley 25 years. Nielsen research (Connected Commerce, 2018) highlights that still, online sales are a small percentage of total sales in supermarkets. Some estimates from the Nielsen research include:

% of FMCG sales online

Global 6 – 7%
Germany 1.4%
Australia 3.1%
US 5.6%
UK 6.3%
China 18.0%

Source: Nielsen , Connected Commerce, 2018

This research highlights that apart from a small number of markets, e.g. China, online sales are still a small percentage of total supermarket sales. From a retailers’ perspective then, most of the shoppers’ purchasing decisions are still made in store. Other research, such as Nielsen (It’s not just about the shelf, creating the ideal in-store experience, 2016) estimates that 70% of consumers’ purchase decisions are still made in store.

Some US research by Valassis (Unpacking the dynamic online shopper, grocery & retail, 2019) highlights:

  • 72% of supermarket shoppers who bought groceries online still made most of their purchases in-store
  • 1/3 of online supermarket shoppers still read through printed store circulars (brochures) before ordering online
  • 61% online supermarket shoppers are more likely to buy an item after seeing an ad in both print and online

This research highlights that even online shoppers are still shopping in store and responding to traditional media, e.g. brochures and print ads.

So, the reason supermarkets are investing in in-store apps is because the vast majority of sales and purchase decisions are still being made in-store.

Digital influence on purchasing

Despite the small percentage of supermarket sales online, grocery shoppers are increasingly influenced by online during the shopping decision making process.

“It’s undisputed that internet availability, mobile technology and digital innovations are redefining consumers every interaction and will continue to enable and disrupt many aspects of consumers’ lifestyles into the future.”

Source: Nielsen , Connected Commerce, 2018

General shopper research by Khalid Saleh (How digital influences in-store shopping behaviour – statistics and trends) highlights that:

  • 87% of in-store shoppers look for information online before shopping
  • 79% of in-store shoppers look for information online while shopping
  • 35% of in-store shoppers look for information online after visiting a store
  • 56% of in-store sales are influenced by a digital interaction
  • 46% of grocery in-store sales are influenced by a digital interaction

This research highlights shoppers buying behaviours have evolved to include more digital. In response to this change supermarkets (that are forward thinking) have embraced technology and are offering shoppers in-store apps.

Also, supermarkets are now offering apps due to the increasing use of smartphones by shoppers. Research by Khalid Saleh highlights that 71% of in-store shoppers, that use smartphones for online research, say their device has become more important to their in-store experience.

A key point to note is that in-store apps are an example of shoppers using digital / online whilst still shopping in store. This is a good example of technology improving the traditional shopping experience – not replacing it.  In-store apps are also an example of retailers offering a seamless omni-channel experience.   

So, another reason why supermarkets are investing in in-store apps is because shoppers’ behaviours have evolved to include more digital in the decision-making process.  

Personalisation

Traditional media, e.g. brochures, would present the same information to all supermarket shoppers. The issue with this approach today, is that many shoppers expect personalised offers. Research, such as Precima (Personalization in Digital Food Retail – Shoppers Expect More, 2019) highlight 63% of shoppers say personalisation is important. The Precima research of shoppers expectations was:

  • 65% pay attention to in-store prices
  • 63% say personalization is important
  • 62% want the right assortment in nearby stores
  • 61% expect high-quality products
  • 45% say they respond to in-store promotions.

This research highlights how important personalisation is to grocery shoppers today.

Technology, such as in-store apps, offers retailers the opportunity to personalise the offer to shoppers. In-store apps can empower the shopper to search for information / offers that are relevant for them. Also, the retailers can analyse the data to better understand their shoppers.

An important reason why supermarkets are offering in-store apps is that the technology will help enable them to offer personalised offers to shoppers.

Examples of in-store supermarket apps

Some examples of supermarket in-store apps include:

USA Amazon Go. This app allows shoppers to exit the store without using a checkout. Simply put the app, and in-store technology, records what items the shopper places into their basket. Then after leaving the store the shopper is charged for those items.

USA – Kroger shopping app. Some of the in-store functionality of the app includes finding items in-store by aisle location and to use a barcode scanner to check prices.

USA – Kroger OptUP app. This app helps shoppers make healthy choices. The app makes healthy recommendations based on what the shopper buys (personalisation).

Australia – Aldi Australia Healthy Picks app. This app provides nutritional information on Aldi Australia packaged foods. Simply put the shopper can scan the product barcode in store to view product nutritional information.

These few examples of supermarket in-store apps highlight the different functionality. The apps can do everything from enabling a shopper to access more information about a product to managing the entire check out process automatically.

Summation

Grocery shoppers have been slow to embrace online ordering / delivery. What has changed is that grocery shoppers are using more digital during the decision-making process. To assist shoppers during the decision-making process supermarkets are now offering in-store apps as part of their overall omni-channel retail strategy. Importantly these apps empower shoppers and allow supermarkets to offer an improved CX (customer experience).

The information provided in this blog post was general in nature. If you require more information I offer a free initial consultation by completing a contact us form.

Thank you,

Tim Bowen