Stop & Shop Finds Self-Checkout Kills The Deadly Roundup
Written by Evan SchumanWhen Stop & Shop was in the middle of a self-service trial, it discovered an unanticipated fringe benefit of the handheld product scanning device: It slightly boosted revenue from customers on a tight budget. Traditionally, budget-constrained shoppers have a specific dollar amount they can’t go over. During a routine shopping trip, these shoppers tend to add up prices in their heads and will quit right before they hit their limit, on the rationale that it’s better to slightly undershoot than overshoot. To do this easily, the shoppers rounded-up the figures, so that a $4.51 package of soup mentally becomes $5.
But when customers had a screen in front of them with a precise count, they felt more comfortable buying more because they knew they’d still be under budget, even if by only a few pennies. For example, a consumer with a budget of $100 for the trip would often spend $91 or $92, which is the result of a couple of dozen items being rounded up. But if the consumer has a precise readout, they might spend a few more dollars to get closer to $99. “The precise pricing can get them to buy more,” said Mike Grimes, an executive VP with Modiv Media, one of the companies involved in the Stop & Shop trial.
-Marc
May 14th, 2009 at 10:16 am
This is a joke – what is the FMI average spend for a consumer? Not $100 – I would challenge the consumer that is spending the FMI average isn’t worried about the budget of the basket, but I would guess that the consumer that has an issue with a budget is the below average consumer for the store and not likely to use a device to figure out what they can spend, they want to get in and out of the store. How could you have a good ROI on a product like this?
May 18th, 2009 at 3:01 pm
It works the reverse for people who need to spend a certain amount to get some discount. (e.g. $5 off if you spend $20) In that case, without the handheld, I rounded up and spent more than I needed to. With the scanner, I rarely spent more than a few cents over the minimum.