Making the Digital/Analog Merge Work For Retail
Through a special arrangement, presented here for discussion is an excerpt from a current article from Insight-Driven Retailing Blog.
I recently downloaded an iPhone app called Pounce that furthers the concept of Commerce Anywhere. Since weekly circulars are still an important part of reaching consumers, they continue to be a cornerstone in many retailers’ marketing plans.
Pounce augments the newspaper experience by allowing users to point their mobile phone’s camera at an item in the circular and have it added to a basket. The basket can then be passed to the retailer’s e-commerce site for normal checkout, then the item is shipped. If you’ve per-registered your payment information with Pounce, you can checkout immediately on the mobile phone.
In a press release, Pounce said it simplifies the often lengthy and complex mobile shopping experience with a one-touch scan and purchase procedure. By securely storing billing and shipping information, Pounce also promises to eliminate the need to re-enter those details for every purchase, and also the possibility that the sale won’t go through
"Print media is a great shopping tool for consumers, but it comes with a time-delay between the initial intent and the actual transaction," said Avital Yachin, founder and CEO of Pounce. "Pounce removes that interruption, empowering consumers with the option to purchase a product right then and there, instead of going online or driving to a store."
According to the statement, only Staples, Ace Hardware, Toys "R" Us, Babies "R" Us and Target are currently supported. For retailers, Pounce generates a sales report extracting details and success rates compiled through Pounce transactions, providing retailers with another way to gauge print ad performance.
After downloading the app, I went to the Staples.com and tried scanning a random item. The app didn’t recognize any items I selected from the website, but that’s not what it’s supposed to do. So I clicked over to the print ads where my local newspaper inserts are available online. The app was great at quickly recognizing those items, taking just a second or two. In fact, as I moved my phone across the page it was grabbing multiple items and putting them all in my cart. Obviously the app is "trained" to recognize only the items in the circular, which makes perfect sense.
This is another great example of merging the analog and digital worlds, letting each do what it does best.
Discussion Questions
How receptive do you think shoppers will be to using newspaper circulars to support their e-commerce purchases? Where do you see other opportunities for retailers to merge the digital and analog worlds to their advantage?
A subset of shoppers (and not a small subset, either) would welcome this innovation. It saves a step between spotting an item in a circular and closing the deal—although I would have to test this myself to see how it works when picking a specific size or color. The other obstacle is one of privacy—will the customer who still reads the Sunday paper (and skews older) be comfortable with automated storage of her credit card for payment purposes?
This app is a great transitional tool to help a generation that is still in the newspaper mindset, gracefully transitioning to m/e-commerce habits. I doubt it will have too much of an impact upon people that are fluent and fluid with digital shopping already, unless stores try something like circular-only specials during the holiday season.
While this is pretty nifty, I am not sure this will be big. My experience is that promotional vehicles often split along generational lines: mobile coupons skew youngest, online digital appeals to Gen X, and newspaper and print skew older (and rural).
So, while the cross-media app is interesting and will no doubt have its supporters, I would be surprised if this were the Next Big Thing.
Pounce is an app that has a chance to be successful in certain types of retail, but probably not for all. I think it might be used more for commodity office supplies at Staples than it will be used at a department store or hardware store. Not so sure about how it will be used for a grocery store, but I would imagine it has possibilities.
It’s very convenient for consumers, but as a CPG marketer, I dislike the concept very much as it further encourages buying only discounted items.
Pounce has an interesting idea, but I don’t see it being a success. First, too few consumers read newspapers to generate a large volume of sales. Second, the retailers currently signed up with Pounce, with the possible exception of Target, are not shopped frequently enough.
An interesting add on for Pounce would be to add grocery circulars and scan the items into a shopping list which could be taken to the store.
The retail store environment is in about the same position that the warehouse environment was in the late 1970s. Warehouses had operated for years using index cards and other “analog” methods to track the movement and location of merchandise within the warehouse. Over the next 10-15 years those manual systems were replaced by digital models of the warehouse stored in electronic “warehouse management systems” that modeled the physical environment and directed the warehouse labor.
The current retail environment is a combination of various systems, both analog and digital, that comprise a fragmented perspective of the total store. The technology is now available to create a complete digital picture. By putting digital labels on the infrastructure, tracking inventory by serial number, and providing employee identification, retailers are able to create a holistic model of the store environment. This new paradigm moves the store closer to the model of the warehouse, where the system directs the activities of store labor rather than the labor telling the system what they have done.
So the ability to quickly and accurately record information from the “real world” into a digital model is important for future retail success. Easy entry of promotions is important, just as monitoring compliance with in-store signage, filling a hole in the yogurt section, or quick response to a back-up at the front end all create a more satisfying shopping experience. I believe consumers will reward retailers who make their shopping experience more pleasant. The ability to integrate promotions with minimal “friction” is just one aspect and I think consumers will use it.
Newspaper sales are declining. The typical subscriber is 50 plus years old. This group is the least likely to even have a smartphone. The younger, heavy smartphone user does not read or receive newspapers and thus will never see the insert. This being the real world status, I fail to see how this application will be a winner.
The specific use-case is transitional. You have a large but shrinking segment of shoppers that still want to use the dead-tree analog research tool (circular), and you have a small but growing segment that want to use a pure digital tool (digital circulars are offered by all the retailers supported by Pounce). And of course you have a very large segment of shoppers that are in-store buyers, and digital pre-shoppers (who use a much broader assortment of digital tools than just the digital circular). But the universe of people that are digitally savvy and want to be digital buyers but dead-tree researchers feels pretty niche.
That being said… the entire universe of shopping is becoming digitally influenced, and image recognition as demonstrated by Pounce (or CamFind, omoby, Amazon, and Google) will clearly be a primary tool in the 100% of purchases are digitally influenced world.
I think of this Pounce style visual search as an an evolutionary improvement in 2D bar-codes. While Pounce visual search only works with the tiny subset of users that have discovered, downloaded, and regularly use their app, 2-D bar codes are at least usable across a wide variety of apps and platforms. Ultimately, I’d expect retailers to be able to submit visual fingerprints (for their marketing messages, product displays, etc.) as a data element to Google along with the rest of their product feed, and make visual product search as universal as Google text search is today.
There is a predominant preponderance that traditional brick & mortar retail is not keeping pace with the e-commerce side of retail. This discussion clearly demonstrates a needed step for stores to not just catch up, but maybe to get a step ahead. The Pounce application software directly moved into the core problem facing most b&m-only retailers today by creating and deploying a practical e-commerce advertisement with fast transaction capability. Electronic circulars were needed years ago and this is an example of what they must do. The money used to create, transport and clean up paper circulars will more than recover the costs of developing applications like Pounce.
This is really a great bridge between the analog and digital worlds. It can be also be extended for coupons in print media. Similar to the current functionality, shoppers can add the products with coupons in the shopping cart.
This solution requires that shoppers use new technologies (digital, smartphone, image recognition) with a declining habit (reading the printed circulars). In short, it’s looking for the person who is digitally savvy but uses the printed circulars to shop, which is a small group that is getting smaller. It’s difficult to see how this would have a significant impact on sales.
This reminds me of the infamous CueCat. When newspaper circulars die out, very few consumers will miss them, so I don’t see many people wanting to enhance their circular experience.
I see 3 scenarios where this would have play: Out-of-store with paper flyer, out-of-store with electronic flyer, and in-store with paper flyer.
The only shopping scenario where I see this adding value to the consumer experience is out-of-store with paper flyer (most likely at home.) Scan the featured product in the paper flyer and buy it via the ecommerce site. Okay, that gets some impulse buys.
The next scenario would require the out-of-store shopper to visit the online circular and complete the same process. The shopper is online, why not just have a link in the electronic flyer that moves the person to the ecommerce site, adding it to their basket, and completing purchase? So I don’t see the app helping much in this process.
The final scenario is in-store with paper flyer. In-store, I don’t see this improving the shopping experience. The consumer is in the store, the product is the store (or should be, it’s on the circular.) Why make the shopper scan the circular, purchase via the ecommerce system, and wait for delivery? So I don’t see the app helping in this scenario.
I think this is overkill. I would guess for every 10,000,000 items scanned, one item will be purchased. This is not nearly as effective as the to-buy list I use every time I go shopping. Technology has run amok!
The opportunities lie in bringing value to the consumer at the transitions between analog and digital; see analog as QR Code, and digital is the landing page. Designing an experience that bridges and adds value will be a place of opportunity.
In the beginning, movies were theatrical performances on film, and then film makers began to innovate entirely new productions. What is described here is an evolutionary step, but the both the challenge and the opportunity lie in creating new experiences at the transitions.
Since the majority of retail advertisers (including both retailers and CPG brands) are still participating in print media, this is an interesting way to leverage digital to drive up redemption of print offers. The trouble is, new metrics will need to connect the two media so measurements are accurate.
Some retailers and CPGs are looking at print coupon redemption in new ways that mirror this app.
Very nice and informative article here. Thanks for the sharing, I also found a useful service for docs merging. If you ever need to merge some documents, check out AltoMerge.com, a really useful tool. Very easy to navigate and use.