business news in context, analysis with attitude

MNB took note yesterday of a New York Times review of the Ikan system, which allows people to scan the packaging of empty products at home, compile an online shopping list by doing so, and then use a one-click system to have the items delivered to your house. The Times liked it, and MNB thinks that this is at least one part of the future of food retailing. Got a lot of email on this, though…

MNB user Glen Terbeek wrote:

To close the productivity gap between creating demand and fulfilling demand, Ikan should also scan bar codes in ads. How often does a shopper see a great item advertised and/or offered by coupon, and forget about it by the time they get to the store? A huge marketing productivity waste. This could be another great opportunity for the manufacturer to go around the retailer or to force the retailer to carry their items.

MNB user Chris Esposito wrote:

While this seems like a time saving device that many city dwellers may adapt to, for the manufacturers, it keeps the individual out of the store, and is thus lost opportunities for new products, sale items, etc. Also, it seems that an individual would become stuck in a rut of purchasing the same items over and over. Maybe for some, this is the way they like it, but to me, the "treasure hunt" aspect of going to the grocery store, seeing what's new and fresh, getting ideas from what it see, makes the chore easier. Maybe for your staples, it works, but for your fresh items, I'd always like to see and touch them first.

The question is whether some consumers would give up the store visit to automatically replenish certain staple items. I think the answer is yes….whether this is good for retailers and manufacturers and new product introductions and impulse sales or not.

MNB user Marc Jones wrote:

Seems to me retailers have two choices when presented with technology like the Ikan…recognize that shopping in your store is a painful experience and take advantage of technology like this to make it easier for your customers to perform the chore…OR…make their shopping trips such fun, and educational, and rewarding experiences that a visit to your store easily outweighs the “fun” of scanning an item. Of course some may argue that the smart choice is to do both – to pursue both the science and art of retailing. Maybe they’re right but I think the second option is certainly a lot more fun to be a part of…granted I’m not a CIO.

Those would be the choices. As someone once said, when you come to this fork in the road, take it.

MNB user Richard Heineman wrote:

This system assumes that the consumer wants to always stay with the same brand and store taking into account no other factors such as price or sales. For example the consumer might have 2 or 3 preferred brands that they are willing to choose and make the decision in the store based on price or other factors such as projected use. Jam might be used for a recipe or on toast. The consumer might choose different brands based on this use. This system cannot really take off until it is interactive and provides options. In addition no consumer package goods company is going to be happy unless they have the ability to influence of purchase at point of sale. Given the control that the retailer has over the customer they would be advised to supply the unit for free. I for one am not willing to give that much power to the retailer; I do not have enough faith in any of them. There are no Wegmans where I live.

The system needs to be connected by Wi-Fi to the Internet to allow full on-line shopping to allow the consumer to split his order between retailers and to allow comparison shopping. The display would provide alternatives to the scanned item based on sales and other factors. This can be advertising supported with display ads from CPG companies or competing retailers. Offers can be split where if grape jelly is scanned the options can be offered with multiple brands and multiple stores. The software can be written to take into account the delivery fees to make sure that the orders are not split between retailers such that a bad economic decision is being made. Of special interest is that Wal-Mart will be the big winner from this technology. The people most likely to use this system are not currently Wal-Mart customers and this would be almost all incremental business.

It is indeed a brave new world. We have only just started in the information age.

MNB user Michael Griffin wrote:

My initial reaction to reading the NYT article excerpts regarding the Ikan system was positive...this seems like a great idea. Following a bit more consideration, I can't see that this would ever have any place in my life.

For those consumers who can afford to ignore the rising cost of food, and are not concerned with actually 'shopping' for food, this could be all it's cracked up to be. But those who do not have to shop for the best prices would also be likely to afford to shop the store perimeter...the fresh departments of deli, bakery, produce, meat, seafood, and more.

For those who are not concerned with the perimeter of the average grocery store, all those wonderful fresh items that need to be seen, touched, smelled, and in some cases tasted (for those who like to sneak the odd grape), this might be the solution. In order to realize the savings on gas and time, the personal selection and/or consumption of fresh items must be abandoned. For me, fresh foods are a critical component of my (and my family's) diet, and buying a melon requires a different investment when compared with buying a can of beans. Shopping for staples takes very little additional time, no extra gas, and the checkout line is the same either way. So, is this device/system all it's cracked up to be? For me, the answer is an emphatic no!

As I shop, I like to be influenced. If the broccoli looks particularly good that day, it quickly finds its way into my basket. I want to be teased and influenced as I make my decisions. New products find their way on to the shelves of my preferred retailer all the time, and I want to see them there, read the label, contemplate the flavors and health benefits, and make my decisions 'in the field'. Shopping, for me, is a process that I enjoy...not all of the process, but most of it.

I suppose it's possible that my shopping habits and requirements are different than those of the average food consumer. I guess that remains to be seen. Online grocery shopping has already gained considerable traction.

Then again...I never understood that one either. My suggestion: get your kids off the PlayStation, take them to the grocery store, and interact with them and your community.

MNB user Jonathan Birchall is skeptical:

As a NYC resident I read with interest bordering on amazement the incredibly boosterish NYT piece on IKAN - which I'd had a look at and then concluded it was a hopeless project that no one should waste their money on.

First, they claim they thought of it so it would be easier to decide what packages to recycle - do we really need to acquire a large piece of equipment to do that? Secondly, why not just await the day we'll all have refrigerators that scan EPC/RFID tags on food and automatically update our shopping lists - is it worth spending $400 in the
meantime for a large plastic scanning device that clutters up your shelf top? My household used a pen and pad on a cupboard door - which seems far more efficient.

It is doomed, I tell you, doomed.

Maybe this iteration won’t work. But I prefer to consider the words of Jean-Luc Picard: “Everything is impossible. Until it’s not.”

Finally, I got a great email in response to the CIES coverage:

I enjoyed your reporting today…very interesting. However…the grey and blue suited gentlemen and ladies attending are the wrong audience. The suits should have sent their summer interns, young managers, boxboys, sons and daughters…for they are the ones that will make the changes you are thinking about today…not the suits – their behavior is locked in and unlikely to change.

Excellent point. CIES does have a terrific Future Leaders conference each year at which many of these same issues are discussed. But wouldn’t it be interesting if CIES 9and other trade associations) encouraged the CEOs to bring along a Future Leader under the age of 35 to sit in on these meetings…not just to be exposed to these ideas but also to offer feedback to the CEO on what seems relevant and should be made a priority. It would be like an instant B.S. test…
KC's View: