Case Study 122 Stop & Shop's Scan It! App

The grocery store and supermarket shopping industries have combined annual revenues in the hundreds of billions of dollars. With little variation in available item selection and less money being spent on groceries in the downtrodden economy, competition for customer loyalty continued to grow. By using business analytics to help process buying habits of its customers, Stop & Shop, a Quincy, Massachusettsbased grocer, tried to get a better grasp on the hardtounderstand concept of customer loyalty in grocery shopping.

Stop & Shop introduced Scan It!, a portable electronic device for customers shopping in its stores. The device allowed customers to "scan and bag" products, expediting checkout times at the end of their shopping trip. Additionally, the device offered deals based on the location of the scanner (and therefore the customer) in the store. Locationspecific discounts in real time became increasingly popular among customers as use of Scan It! grew by 10% in both the first and second quarters after it's introduction. The most beneficial aspect of the Scan It!, however, came with the powerful analytics software built into the device by Modiv Media in which Stop & Shop owns a minority interest. The software kept track of each customer's past and present purchasing habits in order to individualize coupons in real time for the customer.

The scanner resulted in three positive trends for Shop & Stop. Customer loyalty grew, allowing the company to secure an increased customer base than area demographics would predict. Additionally, each shopper's basket size increased as the individually tailored coupons enticed customers to buy more. Lastly, Shop & Stop's customer base grew as word of mouth marketing brought in more customers to try the stateoftheart device.

However, after a couple of years, Stop & Shop saw customer adoption plateau. In October 2011, the grocer created the Scan It! app for the iPhone and Android. By eliminating the need to sign in and retrieve a scanner at the store, customer adoption of the device continued its upward climb. Additionally, as customers became increasingly concerned about saving money while shopping, Stop & Shop built in budgeting software to allow customers to track their spending more effectively. Ads for the new app proclaimed: "New Mobile App Allows Customers to Shop, Bag, and Tally Their Grocery Order with Their Personal iPhone and Android Devices." Scan It! was heralded as "a first of its kind grocery app that allows customers to use their personal mobile device to scan, tally, and bag their groceries while they shop."

Stop & Shop had bundled an app that not only rewarded customers who shopped at its stores by helping them save money but also tracked information on sales, which the company loaded into its data warehouse and used to understand its customers. Analytics then helped Stop & Shop put the right items on its shelves to maximize sales and create customer loyalty.

Discussion Question

List three questions that STOP AND SHOP management could answer about its customers through their use of the Scan It! App data.