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D’Agostino Offers Shoppers Automated Grocery Lists Via Ikan Scanning Technology

 

In an age of increasingly time-poor and Internet-savvy consumers, the Ikan grocery scanner is designed to do for grocery shopping what Netflix did for DVD rentals. Manhattan retailer D’Agostino Grocery introduced the device to its customers in early 2008.


The device is a small countertop application, reminiscent of a kitchen appliance, which enables consumers to scan the barcode of empty items via their wi-fi network to a digital shopping list, serving as a reminder of what items (typically staples) should be purchased during the next trip to the grocery store. Or, in some cases, consumers can arrange to have their groceries delivered via the digital shopping and receive a brief follow-up communication from a grocer.

“We’re finding that people want to save time,” says Anderson Chung, spokesperson for D’Agostino Grocery. “For the most part, people do enjoy shopping for their groceries, but some chose to order it online — there’s a huge convenience factor” with the Ikan scanner.

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To introduce the new scanning technology to its customers, D’Agostino sent an email blast through its Web site informing shoppers of in-store product demonstrations. The company offered an introductory price of $100, discounted from the $399 suggested retail price.

Opportunity for behavioral merchandising
Although designed to provide shopping convenience, the scanner also offers merchandising potential. “I do think that it’s designed for the brand loyal (and time constrained consumers),” says Laura Davis-Taylor, principal of Retail Technology Consulting. “Retailers may miss opportunities to up-sell and cross-sell as well as spontaneous purchases.” She adds: “I would imagine the brands would be dying to get into the database of groceries each home scanner has (and refills) to cross over with other loyalty database information. It’s a golden ticket for behavioral merchandising”

D’Agostino recognized that opportunity and implemented behavioral merchandising into the personal shopping feature of the scanner. Using customer intelligence and reviewing the items selected on consumers’ shopping lists, the grocer is able to target offers for specific customers as an incentive to shop.

Analysts are skeptical
Some industry analysts question the potential for the scanner to have a positive impact on sales and brand marketing. “I have serious doubts about whether such a device will have any meaningful impact on brand marketers,” says George Whalin, president of Retail Management Consulting. “For the past several years we have seen a number of technology tools that were supposed to make it easier for people to shop for and buy groceries. Yet, only a very small percentage of shoppers use the various delivery services that have been launched.”

Another analyst believes the time-saving feature may not draw consumers’ interest as anticipated. “Yes, the device saves time, but mainstream grocery shoppers are willing to spend some extra time to save on their groceries,” says Mark Lilien, consultant with the Retail Technology Group. “. If the device asked about substitutions that are cheaper, shoppers would save time and money: a compelling combination. And why not just attach a bar code scanner to your home computer?”

Ignoring the reasons for shopping?
“For most shoppers a visit to the grocery store is an integral part of their lives,” says Whalin. “While the device may help with the buying and delivery of some kinds of merchandise it does not eliminate the need to visit a grocery store for meats, produce and other perishables.”

Lilien adds that New York City-based D’Agostino Grocery may not be the best test market for this device. “Manhattan isn’t a good place to test market anything meant for mainstream America,” he says. “Manhattan is largely a place for the rich and the poor, not the middle class. Mainstream grocery shoppers look for specials. They aren’t brand loyal because most brands’ quality, including private label, is so similar. So reordering the exact same item, if it isn’t on sale, means giving up opportunity buys for equal substitutes.”

Operational and implementation barriers
While most analysts agree that the device is geared toward consumers who are technology adopters, operational costs are a concern. “A lot of retailers lost their shorts with home delivery and may be loathe to jump in again without good reason,” says Davis-Taylor. She adds that the scanner will have to clear many operational obstacles to reach market penetration. “This device will be changing human shopping behaviors as well as internal retail operations — and it’s not easy to do either.”

 

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