It's no secret that technology has become a dominant driving force for consumers when it comes to grocery shopping. Online shopping and cashier-less checkouts are now expected by customers seeking to maximise convenience. So much so that supermarkets are now creating apps to empower the shopper. But are New Zealand retailers truly taking advantage of the smartphone application?
The demand for mobile applications is only increasing. Research reveals that 80 percent of online adults use a smartphone while the use of apps now accounts for 86 percent of the time spent on a mobile device. And with signups to loyalty programs seeing a 24 percent decrease in recent years, developing a mobile app for consumers is more important than ever, especially when you consider that the use of apps has only increased, with 43 percent of millennials reportedly using an app to grocery shop.
Overseas, supermarket chains are using apps to create unique experiences for their customers. These apps are great for providing information, growing brand awareness, building customer loyalty and creating individualised shopping.
Last July, American supermarket giant Kroger developed an app that assisted customers in making more informed, health-conscious food decisions. The app works by scoring products from one to 100. If a grocery item is given a score of more than 71, then it is placed in the “better for you” green category. Groceries which score 36 to 70 fall in the yellow category while products that score lower than 36 land in the red. The app then reflects on a customer’s purchase history to give them an overall score out of 1000. Kroger recommends that a shopper with a healthy lifestyle should ideally have a score of 600 or over.
Walmart's app offers an array of convenient initiatives such as Search My Store which provides customers with turn-by-turn directions to a product in-store. "Convenience, access, simplicity, and saving money are what customers are looking for, and that's what we aim to deliver," said Ojonimi Bako, Director of Innovation for @WalmartLabs.
Other app initiatives being used by overseas retailers are ‘next step’ rewards programs offering customers tailored rewards, such as U2 concert tickets and spa packages, for engaging and shopping with them.
Save-A-Lot supermarkets also offer rewards for healthy purchases, giving registered customers one point for every dollar spent on fresh fruits and vegetables. The points are then able to be redeemed via gift card or as health care rebates. Through the same app, shoppers can also view easy to follow recipes, win prizes and receive special offers. “Healthy food rewards are the offering today’s busy shoppers are seeking: incentives matched with valuable health-and-wellness content,” said Sam Jones, CEO of Centennial, Colo-based Green Piranhas.
Meanwhile, in New Zealand, Foodstuffs has been using its app to gain a loyal following. "We launched our I Shop New World app in mid-2017 and it’s clear that customers love the increased convenience and savings it gives them. To complement this, we launched a web-based I Shop New World option in early January to provide more convenience and simplicity for shoppers. We also recently launched PAK’nSAVE Click & Collect, which will be rolled out to all PAK’nSAVE locations in the North Island this year, which is web-based, but provides shoppers with a user interface that is web and mobile compatible," said Antoinette Laird, head of external relations, Foodstuffs NZ.
Supermarkets overseas are embracing the power of the app to keep customers coming back but why should NZ retailers harness this technology:
An effective app can make online shopping or “click and collect’ features easy for consumers. To achieve this, an app must be able to learn from a previous purchase, be able to show the correct products and have the ability to adapt depending on location.
Enhance Brand Awareness
It is crucial that an app is recognisable. Retailers should create an atmosphere and a sense of exclusivity to develop a unique brand identity.
Not Just For Business
Consumers like to be rewarded, but traditional loyalty programs no longer appeal to the new generations of shoppers. Creating a sense of ‘play’ for customers where they can earn points by playing games on the app will ensure a returning customer.
In addition to it being used as a fun, interactive tool, apps are also a great way to create a ‘Human Brand’. Providing not just a platform where shoppers can give feedback and report complaints but where the shopper actually gets a response, creating a personal two-way dialogue.
Laird believes that retailers need to use technology to their advantage. "It’s important whatever technology we embrace, that our customer is always at the centre of that decision. Everyone shops differently and the more we understand each shopper’s individual journey, the more we can leverage technology. Whether physical or digital, the brand experience we provide needs to be memorable."
Supermarkets needn't fear the power of the app but instead, embrace it as a way to create a personalised experience for every individual customer.