DELIVERING THE KILLER SHOPPER APP

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1 COMPETITIVE EDGE By Jon Hauptman June 2015 DELIVERING THE KILLER SHOPPER APP An inside look at some of today s great shopping apps WillardBishop.com

2 MOBILE APPS It s not just our kids. It s all of us. We need our phones... for just about everything. And astute retailers are ahead of the curve as they create and refine apps that differentiate their customers digital shopping experience a very smart move considering shoppers are likely to spend 4x more time in a retailer s app than in the retailer s browser. In other words, many retailers are already harnessing the power of their apps to better satisfy today s mobile-obsessed shoppers, while others have apps in development, ready to leapfrog their competitors through superior digital engagement.

3 Shopping Apps are the Fastest-Growing Segment Mobile shopping apps are the fastest-growing segment of the app world. While the use of mobile apps in general increased 76% over the past year, the growth in shopping apps grew at a whopping 174%; beating out other uses such as social messaging (+103%), 174% Growth of Mobile Apps by Segment health and fitness (+89%), sports (+74%) and gaming (+30%). 103% 89% 74% Overall growth of mobile apps Shopping apps, designed for shopper convenience, productivity, price comparisons, Shopping Apps Social Media Health & Fitness Sports 30% Gaming and overall shopper enjoyment, offer a Source: Flurry Analytics basic set of capabilities and features, which typically include: Store information Locations, directions, hours of operation, etc. Weekly ads Access to the store s advertising circular. Shopping lists The ability to build a shopping list of what s needed to be replenished or for a new recipe, often by scanning products at home or accessing lists of previous purchases. Recipes To satisfy a myriad of shopper tastes and to provide guidance with meal preparation. Coupons Providing special offers that can be identified or activated via smartphone. Rx The ability to refill prescriptions quickly and easily. These features represent the blocking and tackling of shopping apps. While they are certainly necessary, they have become somewhat under-whelming.

4 Digital Differentiation In addition to the basics, leading retailers are including a variety of innovative and unique features within their shopping apps. These above and beyond features help to differentiate the retailer s offerings, which result in enhanced shopper satisfaction and improved loyalty. Special Promotions A retailer s mobile app is an ideal way to deliver special promotions to shoppers. For example, Target delivers special offers to patrons via their Cartwheel app, in which shoppers review a wide list of exclusive promotions and then load those in which they re interested, making it very personal. Cartwheel then produces a barcode that the shopper provides at checkout to ensure their special promotions are applied. Ultimately, mobile apps will be the preferred delivery vehicle for providing highly personalized promotions that cater to specific needs and behaviors.

5 Proximity Offers (ibeacons, GPS) A few progressive retailers are testing new capabilities that deliver highly relevant information and promotional offers as they approach a specific category or section. GameStop, the video game retailer, sends special promotions to a shopper s smartphone according to the types of games and consoles the shopper is examining. Similarly, Macy s is placing 4,000 Bluetooth transmitters (beacons) in their department stores across the country, in order to deliver promotions at the point of purchase. Safeway and Giant Eagle are also testing beacon technologies for real-time digital communications. Product Locator Hy-Vee s app offers a product locator, customized by store, to lead shoppers to the product they re looking for all without typing. Shoppers need only speak the name of the product into the app to receive the desired directions. Smart Lists While most grocery apps allow shoppers to make a shopping list for their next store visit, H-E-B s new mobile app organizes the list in the order that a shopper would find the item in their designated store. Expanded Assortment Some retailers use their apps to help shoppers purchase items that are not part of their traditional store s assortment. Costco s retail app allows members to shop Costco.com s expanded assortment, including thousands of items not found inside a a Costco store, and have these items delivered to their homes. It won t be long before we see supermarkets expanding their base assortment with specialty foods from across the globe, available via the chain s mobile app. Meal Preparation Videos While recipes are commonly available in-store and on mobile apps, the Wegmans app takes recipes to a new level. This app offers videos demonstrating how to prepare a wide range of meals. Additionally, the Whole Foods mobile app provides recipes and cooking tips tailored to an array of health needs and encourages people to post pictures of their meal preparation successes. Fuel Rewards Many leading retailer apps, such as Kroger s, help shoppers keep track of their fuel reward points and redemption, thereby making sure shoppers recognize the value delivered by these programs. Photo Processing The CVS app helps shoppers order same-day prints directly from their camera phones, which can be picked up at their nearest CVS store. Marketing H-E-B has established a world-class approach to promoting their new mobile app. They feature an engaging video on their website that skillfully introduces the app and illustrates the benefits of using it, all while tugging at heart strings and shining a bright light on the H-E-B brand.

6 Related Content An engaging, value-added app should be a priority for every supermarket retailer. Those with existing apps should have detailed application roadmaps for future releases. Retailers without a proprietary app have an opportunity to leapfrog competitors by introducing a digital experience one that best meets the needs of today s mobile-savvy shopper. To learn more about digital shopper engagement, please contact Jon Hauptman at jon.hauptman@willardbishop.com or at About the Author Jon Hauptman Partner Jon, a widely recognized pricing expert and retail strategist, leads the Willard Bishop retail services practice. In addition to developing innovative retail services and solutions, Jon is an accomplished speaker and frequently serves as a guest panelist for the retail industry. Jon is also featured regularly in major media venues such as The Wall Street Journal, USA Today, and National Public Radio. Prior to joining Willard Bishop, Jon served in marketing roles with United Airlines and Dominick s Finer Foods. Jon holds an M.B.A. from the University of Chicago. Want Willard Bishop to address a specific retail or CPG issue in an upcoming Competitive Edge? If so, send a request to jeff.rice@willardbishop.com stating your challenges, issues, or ideas. The Willard Bishop editorial staff will review all submissions and notify you if your topic is selected. This document may be shared freely. Copyright Willard Bishop, All rights reserved.

7 Solving Complex Issues for Consumer Goods Manufacturers and Retailers Willard Bishop uses its manufacturer expertise and unprecedented retailer knowledge to create performance-based strategies that work for the supply side, as well as for the demand side. Willard Bishop also integrates shopper-based analytics and cost modeling to identify and quantify hidden opportunities. The company further augments its solution matrix (manufacturer, retailer, and consumer) by providing custom-developed applications, models, and tools that improve client performance from concept to consumer. For Consumer Goods Manufacturers Capturing growth in mature markets and channels has always required a deep understanding of the manufacturerretailer-consumer relationship. However, the emergence of Omni-channel marketing and the evolution of the digitally-connected consumer, are creating new challenges and opportunities for consumer goods manufacturers. Willard Bishop helps manufacturers identify these opportunities; then develops specific road maps that enable clients to capitalize on these trends, while uncovering hidden growth opportunities. Areas of expertise include: For Consumer Goods Retailers Willard Bishop helps consumer goods retailers develop competitive platforms that attract and retain specific shoppers and optimize the sales floor. These platforms include a diverse solution set that connects the retailer s brand identity to the in-store experience. Using localized approaches to assortment, pricing, and promotion, Willard Bishop helps retailers increase shopper loyalty and basket size, while applying advanced analytics to increase efficiencies that span the extended value chain. Areas of expertise include: Growth Strategies Shopper Analytics Performance Optimization Store-Level Merchandising and Support Competitive Positioning Pricing and Promotion Profit/Productivity Optimization ecommerce and Delivery Products, Tools, and Data Through the years, Willard Bishop has developed products that bring new insights and understanding to the manufacturerretailer-consumer relationship. In addition to shopper analytics and merchandising data, Willard Bishop provides comprehensive decision support systems and promotion optimization solutions. AD-IN TM (Developed by Willard Bishop and Prognos) AD-IN TM is the first promotion productivity tool that optimizes the collective performance of retailers circulars (print and digital) and TPRs in order to gain margin and increase visits. Willard Bishop SuperStudy TM (Available for Grocery, C-Store, and ecommerce) SuperStudy TM is a subscription-based service for benchmarking product and category performance using expanded dataviews to provide critical financial insights that are not available from traditional syndicated data providers. Willard Bishop SuperShopper TM Database Improve decision making and business intelligence with the SuperShopper TM database, and benefit from more than two billion consumer transactions from key retailers, representing 20 million households. willardbishop.com