Mobile coupons enter grocery aisles

Location, location, location - it's important in the grocery business, too, with colorful produce drawing customers in and dairy items pulling them to the back of the store.

But the trip through the supermarket can be long and winding, and customers skip aisles because they think they don't need toothpaste or cereal.

New research, using the latest technology, finds that the proper use of mobile coupons could significantly pump up unplanned grocery spending, getting shoppers to buy beyond their lists.

University of Pittsburgh business professor Jeffrey Inman thinks that could be helpful, and not just to retailers. Customers sometimes need to see the Band-Aids to remember they need to buy them.

Inman and his fellow researchers have been studying aspects of shopper behavior for a while, but their most recent study, appearing in the March edition of the Journal of Marketing, specifically looked at the effect of in-store travel distance on unplanned spending and how that might be applied to mobile promotion strategies.

About 50 percent of U.S. consumers own smartphones, and 31 percent are using mobile technology in the grocery store for making lists, finding recipes, or researching products, according to data from Nielsen and Booz & Co. compiled in a 2012 trend report by the Arlington, Va.-based Food Marketing Institute.

"Now, retailers around the country are investing all this money in mobile apps," Inman said, though there hasn't been much research into how apps can be used to affect buying.

Also taking a closer look at the idea are Yanliu Huang, assistant professor of marketing at Drexel University; Sam K. Hui, assistant professor of marketing at New York University, and Jacob Suher, a doctoral student at the University of Texas at Austin.

The researchers' premise: If a store could send a few coupons to shoppers' smartphones at the right moment, maybe for a box of Shredded Wheat or a tube of Crest, those shoppers might travel farther in the store and see other things they needed.

To gather information, the researchers talked with 300 shoppers at an Oregon store, Inman said. Stopped as they entered, the customers were asked whether they had lists and planned budgets.

Shoppers who agreed to participate were given belts with radio-frequency identification technology. The customers generally covered less than half of the areas in the grocery store, traveling about 1,400 feet, on average. Going an additional 55 feet triggered about one dollar more in unplanned spending, researchers found.

A second round took place in a Pittsburgh grocery store in April, when about 90 shoppers were interviewed at the entrance.

This time, the researchers entered the customers' planned purchases into a laptop, compared the lists and a store map, then kicked out coupons for things such as toilet paper, canned soup, pasta, and over-the-counter medicines.

Some shoppers got coupons for items close to their expected routes; others got promotions requiring them to go much farther in the store.

Not surprisingly, those who had to pass more goods to use their coupons spent more - the study found the average in unplanned spending was $13.83 for shoppers given deals near their routes, but $21.29 for those who traveled longer distances. Excluding the merchandise they got coupons for, they still spent $12.50 vs. $20.14.

In the Journal of Marketing article, the researchers noted there are other ways besides mobile coupons to offer promotions based on location, such as offering shelf-level instant coupons for goods elsewhere in the store or analyzing data to find items typically not bought together and promoting one near the other.

Even with improving smartphone technology that can offer deals as customers roam a store, Inman said, retailers should be careful in using location strategy to direct shopper behavior:

"It's really key not to make people mad."