iStock.com/JHVEPhoto
Are Personalized Ads on Shopping Carts Ready To Roll?
Instacart announced a pilot to deliver personalized ads to its in-store smart carts. Beyond past purchases, the recommendations and coupons showing up on smart cart screens promise to be based on the shoppers’ aisle location and cart contents.
Instacart stated, “For example, if a customer adds ice cream cones, they might see a complementary item recommendation, like Dreyer’s ice cream.”
The program is launching at Good Food Holdings’ Bristol Farms stores in Southern California. Del Monte Foods, Dreyer’s, and General Mills are initial CPG brand partners.
The ads will appear on Instacart’s Caper Carts, which use scales, sensors, touchscreens, and computer vision to enable customers to place items in the cart and checkout without manually scanning items. Loyalty accounts can also be linked to the carts to secure personalized promotions.
With personalized ads arriving on smart cart screen, customers will be able to discover new products and receive timely suggestions and promotions to drive engagement and increase basket sizes for retailers. Through a revenue share model, retailers also add a new in-store retail media revenue stream to complement online advertising pushes.
For CPG brands, the customized ads promise to engage in-store shoppers with more relevance while aligning online and in-store approaches.
Jen Reiner, VP of omnichannel marketing for Del Monte Foods, said, “The Caper Carts provide an opportunity for us to provide meal inspiration, introduce new products or simply remind the shopper to stock-up on pantry staples, while continuing to deliver a personalized, relevant experience based on past shopping behaviors.”
Veeve, a Seattle-based smart cart startup, last year added extra cameras to scan store interiors and connect messages to shoppers to capitalize on retail media’s growth. CEO Shariq Siddiqui told Grocery Dive that the ROI of using smart carts solely as checkout devices was challenging for grocers, particularly as numerous self-checkout options have arrived.
Nonetheless, an Insider Intelligence article from late 2022 concluded that in-store retail media should focus on branding, as personalized ads would likely be “deemed creepy or overly intrusive” by shoppers and grocer margins would decline due to the individualized discounts.
Privacy concerns around smart carts delivering personalized ads have been heard as far back as 2002 when Safeway tested the technology. Don Gilbert, then NRF’s SVP of information technology, told CNET at the time, “Consumers don’t want to be targeted as individuals. You don’t want the stores to know that you buy a case of beer every night.”
Discussion Questions
Do you see personalized ads on in-store smart carts still facing privacy concerns or other hurdles? Or do you see smart carts ideally positioned to support retail media networks?
Poll
Loading …BrainTrust
Anil Patel
Founder & CEO, HotWax Commerce
Carol Spieckerman
President, Spieckerman Retail
Color me skeptical on the whole idea of smart carts. They seem like a very over engineered solution that might work in niche grocers but would cost a small fortune in a grocer like Kroger or Walmart which have hundreds of carts in a single store – carts that are really put through their paces, including being left out in the rain! If retailers want consumers to scan things as they move around the store, handheld devices – like the ones Tesco uses – are a simpler solution. On top of this, I’d question how many consumers really want to be bombarded with ads on a screen. I think there is a place for smart carts, but maintain my view that it is a something of a solution in search of a problem.
I Agree with Neil completely! At a Large grocer many of the carts might end up “out of service” in regards to the smart parts. Given the status of media today, I do not think ANYONE wants to be bombarded with ADS while shopping! Personally, I would ignore all of it wholesale!
I agree with Neil and William’s perspective on the viability of smart carts, due to the high capital expenditures and ongoing maintenance costs. An alternative would be to have a smartphone attachment on carts for shoppers to attach their phone conveniently on the cart. With this approach, there is no cost to retailers for devices and they could invest in an app that enables shoppers to view their shopping list, find products in the store, receive recommendations and promotions, scan products and pay. This is the Holy Grail, IMHO.
Good point, David. Why not let shoppers use their own devices via an app? Or, like many UK grocers have, use handheld scanning devices. It’s much cheaper and easier to manage. At Target, people already use their own devices to scan items to get discounts or points via the Target Circle app. A simple solution that works well!
Smart carts that offer reliability, ease and relevant product discovery can earn customers’ trust. Privacy issues and growing disenchantment with self-checkout technology are barriers for smart carts to overcome.
By integrating loyalty and location data, promotions and product recommendations, smart carts are sophisticated mobile tools that support in-store retail media in real time.
Smart carts have been around for a long time but have failed to latch on for several reasons (customer aversion to new technology, small basket space, minimal in-store assistance etc) but retail media could breathe new life into this solution, whether it’s warranted or not.
Certainly, brands and retailers are excited about connecting digital and instore media for a more seemless shopping experience; not to mention the shared revenue stream for retailers. And yes, there is value to influencing basket size that close to point-of-purchase. This is all good, but there is a miss for consumers.
First, grocery shopping can be a highly habitual trip. Most consumers are still trying to figure out how to get their digital loyalty coupons to work at check out. The smart cart changes how consumers shop and that behavior change (good or bad) may be tough for a shopping trip that’s near auto pilot.
Second, and most importantly, consumers are more sensitive to privacy now more than ever. Truly, it’s weird for a shopping cart to remind you of past purchases. It begs the question: how creepy is too creepy?
Instacart has certainly leveraged modern retail media to make a case for a new look at smart carts. But, it feels like the balance of scales is tipped in favor of brands and retailers, not the consumer.
World peace? A good 5c cigar? No: this is what the world has been wating for! It’s an intriguing idea – I guess – but like a lot tech wizardry we see here on RW, I think demand may take a while to catch up to the technology. To people who will have to manage them, it’s just another think to get stolen or break or just not work right in the first place.
Placing ads on smart carts is a good idea. That aside, has anyone actually ever seen a smart cart? Not in a NYC pop-up or something similar, but in a suburban grocery store? Because I never have. Cup holders are about as smart as carts get around here.
Personalized ads on in-store smart carts could face ongoing privacy concerns, in my opinion. It’s interesting to see how shoppers react to personalized ads on the smart shopping cart. While the idea of customized promotions based on customers’ preferences seems beneficial, if shoppers express hesitation and concerns about individual targeting, they might find it interruptive, impacting their overall shopping experience. Most importantly, considerations about potential creepiness and impacts on grocer margins should be acknowledged. Although these smart carts offer a chance to enhance engagement and revenue for retailers, maintaining the right balance between personalization and privacy is crucial. Achieving success may depend on transparent communication and addressing persistent concerns regarding the use of customer data in retail environments.
The attraction of retail media networks, and the promise of ad revenue and increased sales, is compelling to retailers. But as much as consumers consistently claim to want personalization, the majority of shoppers are paradoxically reticent to provide their personal information. Retail media networks do hold promise, but they are still substantially a work in progress. Personalized ads on in-store carts may have some value, but I doubt that they will become a key element of any retail media network given the cost of deploying and maintaining these smart carts, not to mention the potential downside of a degraded shopping experience for consumers who prefer to not be bombarded by ads as they shop.
How far is too far? is the question of the year as the promise of hyper-personalization tempts brands and retailers into tricky territory. To borrow from a conversation I had at NRF this week, shoppers want to be seen and heard but not necessarily known. Scan-and-go technologies are helpful. Smart carts loaded with ads, not so much.
Beware the harm of advertisement fatigue on the consumer…
I don’t usually embrace this kind of thing, but smart carts for grocery shopping could be very useful. IF…a little restraint is exercised. I always get coupons on my receipt. I’m done shopping. I’m headed for my car. The odds of me losing or forgetting the coupon for my next shopping trip approach 100%. If a smart cart can coupon me or suggest complimentary items while I am actually shopping, that could be very useful. And a basket size builder for the retailer. The key for me is restraint, striking the right balance. The instant I think I am being harassed, the whole deal is off.
Too bad there aren’t any smart carts involved in apparel shopping. What a great way to suggest outfit variations.
There seems to be a move to introduce smart carts into the market about every other year. This has been happening since the early 2000s, and yet, I have yet to run into one of these devices in the wild.
Privacy aside, there are huge issues around execution that have yet to be solved. A typical Target (my first-hand experience) has around 500 shopping carts and around 1800 stores. The cost of deploying this tech across almost a million units is staggering. Moving past that, keeping these screens charged and up and running. It’s hard enough for grocers to keep regular carts in working order with the abuse they take in the store and the parking lot. Adding technology exponentially complicates this problem. You also have to keep them charged and have the bandwidth in your store network to ensure they’re working. From a security standpoint, you’ve added a million new potential access points for bad actors to penetrate your network, and or to access your customer data to these bad actors.
Most grocers are only too aware of these factors, which is why smart carts have not been widely adopted. When you add back the idea that customers aren’t crazy about being tracked at every turn, it is time to ask “should we’ and not just “could we?”.
Retail media networks are a significant emerging revenue stream for grocers; however, the concept of smart carts loaded with personalized ads is novel at best. This solution should be examined with an objective eye. Considering the upfront significant investments in a smart cart, scaling this up for a larger grocery store such as Kroger, Whole Foods, and Stop & Shop is an extremely costly proposition that will limit any expected ROI.
Throughout the NRF, intelligent checkout experiences, including cashier-less, autonomous, smart carts, and just walkout capabilities, were highlighted. The value proposition of a smart cart isn’t there for a large grocery operation, where hundreds of carts are required, which get damaged and stolen. Additionally, already time-strapped consumers will see plenty of ad tech capabilities in the stores and mobile apps.
I’ve always been intrigued by this level of personalization. Done right, the screen (computer) offering the ads will sync with the customer’s past buying habbits and deliver “in-the-moment” advertising. The key is the customer trusts the retailer to use their personal information and buying history properly. This is a great opportunity to give the customer a better buying experience.
Personalized ads on in-store smart carts or trolleys are a novel way of engaging shoppers with relevant and timely offers, but they may also face some challenges and risks.
One of the main concerns is likely to be privacy, as shoppers may not want their personal data, such as past purchases, location, or cart contents, to be tracked and used for advertising purposes. Another concern is the potential for intrusive or annoying ads that may disrupt the shopping experience or influence the shoppers’ choices – could they distract you if you are in a rush?
The effectiveness and return on investment of these ads may depend on various factors, such as the quality of the recommendations, the availability of the products, and the shoppers’ preferences and behaviors. The cost of buying and maintaining these could be significant – making the business case really tricky. Time spent by stores maintaining and managing even basic trolleys today can be significant. Personalized ads on in-store smart carts may require careful design, testing, and evaluation to ensure they deliver value to both retailers and shoppers.
No. We must stop pestering consumers. From tray table ads for Dramamine on airplanes (a real experience) to brand stickers on escalator handrails at o’Hare (another real experience), companies are paying a lot to offend customers.
Fortunately, I expect the financials on this idea will backfire at scale. Grocery cart costs are already high – they don’t need to be higher.
Consumers will take the steps we ask of them if we show that we also respect their environment. That is only possible if we stay away from turning grocery and other stores into noisy third world airports where travelers are pestered by taxis.
Eventually, the technology for smart carts will work. Eventually, the costs will drop substantially. Eventually, they will be reliable in the rain.
The question is, “Will the shopper care?” Not this shopper. I’ll take the cart without all the bells and whistles.
I can imagine smart carts, or parts thereof, being stolen from the parking lot where customers leave them!
Surely, this is America.
Please. No. 🙂
Shoppers don’t want smart carts.
This is an obvious idea whose time has come, but not necessarily in the “smart” description from the article. If the retailer just had carts showing ads/coupons based on the aisle which the cart is located on, then this would be a tremendous way to get an enhanced exposure and increased share of eyeballs at store level. Add in ruggadized signage that is on the side of the cart as well as a smaller screen on the handle of the cart as shown. This is a simpler solution, easier to implement, and can create larger revenue streams because it promotes products directly to the person pushing the cart, as well as people who see the cart.
Research has found that consumers are okay with brands collecting their data if it’s properly communicated about how it’s being used. These new in-store smart carts are a great example; if retailers are transparent about how customer data is used to deliver personalized experiences and benefits, consumers won’t mind as much.
Where consumers often express concerns about their data is when they’re unclear about how it’s being used. A bigger hurdle that retailers will likely have to consider with these smart carts is if people are looking for yet another medium to add to the noise of shopping in-store or if they’ll feel it’s overwhelming. In addition to clipping digital coupons, browsing shelves, and comparing price stickers for the best deal, they’ll now have to add paying attention to their cart as another factor. Although many brands might view this as an extension of the retail media network, for some consumers this could be one step too many.
Personalized ads on shopping carts are an intriguing concept that certainly have the potential to enhance the shopping experience and drive sales. However, the readiness of this technology depends on several factors, including technological capabilities, consumer acceptance, and, of course, privacy considerations. To get this right from a privacy perspective, first and foremost, retailers need to be transparent about their data collection practices, obtain consent from shoppers, and adhere to strict data protection regulations to safeguard consumer privacy. Clear opt-in mechanisms and robust data security measures are essential to build trust and mitigate privacy risks. Striking a balance between personalization and privacy helps ensure shoppers feel comfortable and empowered rather than surveilled.