The system, dubbed SmartShop, provides participating shoppers with relevant discounts and promotions based on purchase history, and is being pitched as the quick and easy alternative to clipping coupons. Here's how it works (courtesy of the press release they put out):
1. When shoppers enter the store, they simply scan their finger at the SmartShop kiosk to get personalized offers based on their purchase history.
2. Shoppers receive an 8 ½ x 11 print out with 12 to 16 customized offers for the products they buy most, and then head into the aisles to shop.
3. Shoppers scan their finger again at check-out to automatically redeem their offers. They do not need to bring the print out; no paper coupons are required.
The first grocer to trial the system was Green Hills Market of Syracuse, New York, who apparently found some value in it:
"The SmartShop service has been extremely popular, and shopper participation is already impacting 50 percent of store revenue," said Gary Hawkins, CEO, Hawkins Strategic and Proprietor of Green Hills Market. "We have seen offer redemption rates exceeding 20 percent. Of the customers enrolled in SmartShop, who also shopped last year during the same period, their shopping visits have increased by 10% per week."
"Most importantly," Hawkins added, "SmartShop is driving a significant increase in revenue in a time of new market competition from big box stores. It has given us the tools to compete more effectively and not only retain customer loyalty, but attract new customers."
We can assume that the overall effect has been positive, since many grocers assume -- and in fact count on the fact -- that only a tiny fraction of printed coupons will be redeemed. But I'm sure that if these kiosks prove to be popular those models would be revised. Typically, though, when customers frequent your store more often and buy more product, there's a way to profit from it, even if you are giving out more discounts in the process.
Tags: Pay By Touch, loyalty kiosks, coupon kiosks, instant coupons