Can Mobile Enhance Supermarket Store Revenues?

A March 2013 study tracked supermarket shoppers using Radio Frequency Identification to determine if shopping paths affected the amount of money people spent in a store.  The researchers found that the longer an individual shopper spent in the store the more money he or she spent.  In fact, increasing path length by 10% or 140 feet led to increased spending of $2.54 per shopper, a gain of over 16%.  Of course, marketers have always tried to keep shoppers in the store longer to increase sales.  That is why supermarkets place milk in the back and Ikea sets customers on an endless path.

This study is unique in that it added coupons to the mix to extend the shopping path. The researchers gave subjects coupons for items that were either near or far from their expected path.  When consumers received coupons for their unplanned items that led them on the far path they spent more money overall as compared to those who were given coupons leading to a shorter path through the store.

The implication for supermarkets is that management can use mobile couponing or shopping cart coupons to direct consumers on farther trips through the store to increase spending levels.  Mobile can also be harnessed to examine shopping lists to determine which items would be best suited for couponing. Specifically, when customers are in-store to purchase specific items, they may be more likely to respond to a coupon for that item.   The strategy doesn’t cost a lot of money.  Subjects in the far coupon conditions spent almost twice as much with only a $1.00 coupon.

Source:

The Effect of In-Store Travel Distance on Unplanned Spending:

Applications to Mobile Promotion Strategies

by

Sam K. Hui, J. Jeffrey Inman, Yanliu Huang, & Jacob Suher

Journal of Marketing Research, March 2013

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