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Shoppers have sparked many changes in the technology side of retailing, from mobile and social media to greater reliance on data-driven applications — trends reflected in SN’s 2012 technology survey.
Testing Social Medias
Digital applications of various kinds are a growing part of food retailer’s IT portfolio. Social media, for example, has attracted most large retailers and the majority of smaller merchants as well. “Consumers spend an ever-increasing amount of time on social networks, so it behooves retailers to extend their marketing into those networks,” says “Social Retailing Blueprint,” published in January by the Association for Retail Technology Standards (ARTS), a division of the National Retail Federation, Washington. Social media represents a very cost-efficient way to connect with consumers, the document noted, but added that “the industry is still experimenting with the most effective [social media] campaigns.”
In SN’s survey, 32 of 46 respondents (69.6%) addressed a question asking for details of their social media efforts. Store and promotional information topped the list of what retailers provide via social media, cited by 84.4% and 68.8% of respondents, respectively. Coupons and targeted ads are next, at 59.4%, though larger retailers are far more active with those strategies. Facebook commerce and response to shopper-generated content are employed by around 40% of respondents while content analysis and check-in services like Foursquare are still relatively uncommon.
Mobile marketing is fast becoming a mainstream activity among food retailers as every day it seems another retailer is announcing a new smartphone app. This year, more than half of respondents (54.3%) addressed a question asking for details of their mobile marketing efforts.
Coupons head the list of mobile marketing activities, cited by 52% of respondents that use mobile marketing. Some retailers, like Stop & Shop, allow shoppers to download digital offers on a smartphone to their loyalty card for easy redemption at the checkout. Digital coupons redeem at a much higher rate than freestanding-insert paper coupons — between 5% and 20%, compared with 0.9%, according to ABI Research, Moreover, digital coupons can reach shoppers, particularly of the younger variety, who don’t bother with paper coupons.
Coupons are followed by recipes (44%), product information (40%), loyalty (36%) and text messages (32%) among the more popular mobile marketing options. Less popular apps include product locator (24%), price scanning (20%), product reviews (20%) and QR codes (20%).
Food retailers are also using their websites, in concert with social media and mobile phones, to build brand equity and earn the loyalty of shoppers who are increasingly digitized in their shopping habits.
In the SN survey, some standard website features, such as company history (65.2%) and store locator (60.9%) continue to be cited by the majority of respondents. Moving up in popularity are Facebook links, provided by 56.5% of respondents, Twitter (34.8%), email communication with customers (63%) and printable coupons (54.3%). Interactive features, such as lists, recipes and the weekly flier, are used by 32.6% of respondents.
While coupons are becoming increasingly digitized, they are also changing in the physical world with the emergence of a new bar code, the GS1 DataBar. After two years of delays, manufacturer coupons bearing the GS1 DataBar as the only bar code are set to enter the marketplace in substantial numbers, with the expectation that most retailers will be able to scan and process them at the checkout.
The appearance of DataBar-only coupons in large numbers will signal the impending conclusion of an interim mode that began in 2008, during which time coupons have contained both the DataBar and the UPC-A bar code, the original coupon bar code introduced in the mid-1980s. The DataBar contains far more data than the UPC-A code (from 24 to 74 digits, compared with 12), allowing manufacturers to provide more complex coupon offers, while enabling retailers to automatically validate expiration dates and other promotion information.
In the SN survey, 54.3% of respondents, including 71.4% of larger retailers, said they can scan and process the DataBar on coupons. This reflects an ongoing trend in which independent retailers have lagged in their DataBar scanning capability. Among smaller retailers that can’t currently scan the DataBar, 26.6% expect to do so by 2013. The rest will be doing a lot of manual input of coupon information.
The DataBar, in a smaller version, is also being used on loose produce stickers along with the price look-up (PLU) number. Scanning the DataBar on loose produce eliminates the need for cashiers (or shoppers at the self-checkout) to key-enter the PLU number. The accuracy gained helps to reduce the shrink that occurs when organic or exotic produce is not identified correctly.
However, only 32.6% of survey respondents, including 42.9% of larger retailers, reported being able to scan and process the DataBar on perishables. Of those that can’t, half expect to be able to do so by 2013.