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In Control

In an age when consumers have become used to handling cell phones and iPods, are they ready to incorporate a portable electronic device into their grocery shopping trip? After much trial and error, Stop & Shop, Quincy, Mass., a division of Ahold, may be as close as any food retailer has come to answering that question with its rollout of a handheld scanning/marketing device dubbed Scan It! While Food

In an age when consumers have become used to handling cell phones and iPods, are they ready to incorporate a portable electronic device into their grocery shopping trip?

After much trial and error, Stop & Shop, Quincy, Mass., a division of Ahold, may be as close as any food retailer has come to answering that question with its rollout of a handheld scanning/marketing device dubbed Scan It! While Food Lion's Bloom division and others are testing portable shopping devices (see "Other Mobile Shopping Devices"), few have devoted the resources — or attracted the attention — that Stop & Shop has with its Scan It! implementation.

Stop & Shop's foray into the world of portable electronics began in 2004 with a shopping cart tablet called the Shopping Buddy. Shoppers would select their Shopping Buddy from a bank of these units and attach it to the front of the cart. It offered a menu of possibilities, including scanning, deli ordering, finding products and receiving personal offers.

But Shopping Buddy didn't gain enough traction with shoppers — only about 1% to 3% used it — and Stop & Shop never installed it in more than 24 of its 355 stores. The chain concluded that the tablet was simply too complicated for shoppers, and replaced it in 2007 with a simpler, less expensive handheld device initially dubbed EasyShop and later renamed Scan It!

Scan It! consists of hardware — the MC-17 handheld scanner — from Motorola, Holtsville, N.Y., and software provided by Modiv Media, Quincy (Stop & Shop has a minor interest in Modiv Media and its senior vice president of marketing, Stephen Vowles, sits on Modiv's board.)

Scan It! has caught on to a much greater degree than the Shopping Buddy. “Its pure intuitive nature caused a huge step forward in customer adoption,” said Bob Anderson, Stop & Shop's director of customer relationship marketing.

Loyalty card shoppers pick up a Scan It! device by scanning their card at a bank of devices and selecting the one that lights up. (Most stores carry 48 units.) Shoppers use the device to scan and bag products as they traverse the store, often filling their carts, with most finalizing their trip at a self-checkout lane. They can also take advantage of a dozen offers contained in the device that are tailored to their purchasing history, current selections and location in the store. (Disclosure: This reporter is a Scan It! shopper at a Connecticut Stop & Shop store.)

In the fall of 2007, Stop & Shop rolled out Scan It! to 90 stores. By May of this year, the chain had increased the number of outlets offering the device to 250, one-third of them operated by Stop & Shop's subsidiary Giant Food, Landover, Md. That represents about half of all Stop & Shop and Giant stores.

Now the question is: Where does Stop & Shop — and the industry as a whole — go from here?


The key metric defining the success of Scan It! is the percentage of shoppers who use it in a week. That number, said Anderson, ranges between 6% and 8%. Usage grew by 10% in the first quarter of 2009, and by another 10% in the second quarter, according to Mike Grimes, president of Modiv Media.

Stop & Shop's goal is for the percentage of Scan It! users to get to double digits, said Anderson. “We know this will take awhile, but we are listening to our customers on how to make this a core component of their shopping trips.”

At the same time, Anderson regards the current rate as constituting “strong adoption” and is encouraged that it continues to grow. “It's been a positive story and that's why we expanded to 250 stores.”

In addition to usage, Stop & Shop looks at the overall impact the device has had on the chain, finding three positive trends: It helps to secure the loyalty of certain customers, brings more shoppers into stores and increases basket size. One shopper, Brian Walsh of Danbury, Conn., said the Scan It! device “keeps me going to Stop & Shop. I wouldn't shop there as much if they didn't have it.”

On top of that, the chain derives revenue from the targeted CPG ads that appear on the device, and has been able to reduce labor costs thanks to shoppers' self-scanning efforts.

All told, said Anderson, Stop & Shop has achieved a “positive ROI” on its investment in the technology, which comes to about $70,000 per store.

All of the 250 Stop & Shop/Giant Food stores offering Scan It! also employ the DeliVision system, also from Modiv Media. This system includes a deli ordering kiosk and a ticket dispenser for shoppers waiting in line. An overhead display shows the ticket number being served.

By scanning their card at the kiosk, shoppers can call up their previous deli orders. Those shoppers receive a notification on the Scan It! device — or by text message, if they prefer — that their deli order is ready for pick-up.

Another 210 Stop & Shop/Giant stores have installed the DeliVision system without Scan It! While Anderson did not say Stop & Shop is committed to expanding the Scan It! rollout, he acknowledged that Scan It! is supposed to be integrated with DeliVision. “So the potential is there that we will continue to roll it out to the remaining DeliVision stores,” he said. “As we continue to get [usage] growth, we will certainly try to expand [the rollout].”

Grimes noted that some stores may lack the shopper demographics or the physical layout to support Scan It!


Other attempts by retailers to offer portable scanning devices, including a past effort by Albertsons and a current one by Bloom, limit the functionality to scanning. Scan It!, on the other hand, has added targeted promotional offers, and this has been critical to its success to date. Use of the device jumped 50% when Stop & Shop began including offers in Scan It!, said Grimes.

“There are a huge number of customers that redeem at least one offer,” said Anderson. “A large component of sales lift comes from the targeted offers.”

Up to 75 brands have run targeted ads on Scan It! “All the major CPGs have participated in the program,” said Anderson. Stop & Shop private label is also featured. The chain is beginning to test delivery of offers at the deli, including offers on numbered tickets and targeted offers at the kiosk.

While DeliVision has been implemented by other chains, including Giant Eagle, Ukrop's and Roche Bros., Scan It! has not been deployed yet outside of Stop & Shop. But Modiv Media began marketing Scan It! this year and has interest from three to four chains, including two in Europe, said Grimes.

Will other retailers implement a scanning/marketing device? Some observers have their doubts. “This technology in a general sense has been around since the mid-'90s in some form or other,” said Thomas Murphy, president of Peak Tech Consulting, Colorado Springs. “Consumer acceptance and ROI don't seem to have progressed much since then.”

But Bill Bishop, chairman of Willard Bishop, Barrington, Ill., who was a user and fan of a self-scanning device offered and removed by Albertsons several years ago, is bullish on these devices. “I'm amazed that retailers are not thinking hard about getting the benefits from this and minimizing the cost,” he said. “Most people want greater control of their shopping and this is the perfect device to do it.”

Bishop believes that concerns about theft prevent some retailers from adopting self-scanners, though he thinks that by restricting the device to high-spending customers, retailers would minimize that issue.

Stop & Shop's approach to preventing theft is to conduct random sample audits of Scan It! users. “We see absolutely no more shrink in stores with Scan It! than in stores without Scan It!,” Anderson said.

Self-scanning/marketing applications may ultimately wind up appearing on cell phones. Scan It! is already able to run on the Android operating system Google has developed for smart phones. “It's working in the lab now but we don't know when retailers will be ready for it,” Grimes said.

When they are, self-scanning/marketing “may end up being a killer application for smart-phone users,” said Murphy. “First, they are technology adopters. Second, they generally are from a generation who hate to clip coupons. Third, this is a generation that will pay $2.99 for a [smart-phone] app that simplifies their life. Then the benefits of the handheld shopper device may reach the tipping point.”