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Shopping 'buddy' provides next level of service

November 2, 2005

Grocery retailers were among the first to venture into the self-service arena with the installation of self-checkout lanes, and consumer response to the service has been resoundingly positive. Some grocers are building on that response and taking self-service to the next level by introducing personal shopping assistants (PSAs).

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PSAs, a.k.a. intelligent shopping carts and smart carts, are small, fully functioning Internet-capable computers mounted on the handle of shopping carts. Shoppers log in using a store-issued PIN or by swiping their loyalty card. The application recognizes the shopper, accesses past shopping history and offers promotions based on which aisle he is in, said Gregory Thompson, retail spokesperson for Armonk, N.Y.-based IBM.

By using a PSA, customers can keep a tally of their selections by scanning them as they put the items into the cart, find a product in the store, download their shopping list, order from the deli and be prompted when the order is ready for pickup, and find a recipe and have the ingredients added to their list, and receive personalized coupons, among other features.

One of the most compelling reasons for retailers to consider adopting PSA technology is to improve customer service. Loyalty programs abound, but the rewards are mostly the same for all shoppers. PSAs can help retailers provide individualized service to each customer and build loyalty based on something other than discounts.

Current loyalty programs only let retailers know when a customer is leaving the store. But because customers using a PSA swipe their card when they enter the store, retailers are better able to cater to those customers while they are on the premises.

Thompson said that personalized promotions allow two customers in the same aisle to each get different coupon offers. In the test-marketing of its PSA at three Massachusetts Stop & Shop stores, IBM is finding that these types of campaigns are especially important to cash-based consumers. Consumers feel that they are getting value because they can actually use the coupon.

Before heading to the store, customers can take advantage of the Web-connected devices and e-mail a shopping list to their store accounts. As they scan the items and place them in the cart, the application will mark them off the list. Customers can also call up dietary information or select a wine for a specific meal.

Stop & Shop retail spokesperson Robert Keane initially expected the device to appeal to a particular demographic group, but the Shopping Buddy is popular across gender, age and financial groups, he said. The Massachusetts-based chain is expecting to deploy PSAs in another 17 stores in 2006.

IBM's device relies on GPS-type technology and RFID to help shoppers map out their trip through the store or find products. By making items easier to find, the mapping functionality of a PSA can potentially help retailers sell more products.

One soft benefit to retailers is the advertising revenue that's to be gained. Because advertisements reach consumers at the point of decision, they are more effective - and, therefore, more valuable to advertisers.

This article appeared inRetail Kiosk & Self-Service Executive Summary, Fall 2005.