Location, Location, Location

On Feb. 25, some shoppers at seven County Market outlets in the Springfield, Ill., area received an offer based on where they happened to be standing in the store — in this case, the produce department.

That was the day when County Market — the primary grocery banner used by Quincy, Ill.-based Niemann Foods — began a “soft launch” of a smartphone app designed by technology provider Birdzi, based in Iselin, N.J., specifically for independent grocers with few stores or even just a single-store operation. Unlike most grocery apps, this one leverages the power of in-store wireless networks and new low-energy Bluetooth beacon technology to determine a shopper’s location in the store and deliver deals tailored to that location to her phone.

County Market shoppers in Springfield — once home for many years to Abraham Lincoln at a time when food shopping was considerably less technology-driven — were able to start receiving location-based targeted offers if they downloaded the app, which made them loyalty club members if they weren’t already. Then, while they perused the strawberry selection, up popped this offer on the app: free private label whipped cream with the purchase of a package of strawberries.

Niemann is in the early stages of implementing its branded app, which is the linchpin of a cloud-based digital marketing system developed by Birdzi, in conjunction with Personiphi, to help independent retailers. Niemann is also participating in a related program, originally conceived by Personiphi and being executed by Birdzi, to aggregate customer shopping data across independent grocers to earn shopper marketing dollars from CPG vendors. Those marketing dollars will support personalized mobile offers conveyed through the Birdzi system; Unilever and Mondelez are the first two vendors engaged in the program.

“This is a good opportunity, and we want to do it right,” says Ron Cook, VP, director of marketing for the retailer. “Vendors are going to keep a close eye on this. If an independent can manage it professionally and responsibly, it might be a place for them to invest their dollars.”

Gary Hawkins, a former grocery retailer who is the founder of Personiphi and a member of Birdzi’s board, points out several threats to the independent grocery sector that the Birdzi program is designed to counter: the growing use of personalization technologies by large chains like Kroger and Safeway, the new focus by CPG brands on shopper marketing promotion strategies, and the accompanying shift of CPG marketing funds away from traditional trade promotions.

The Birdzi program represents “an opportunity to unite independents by way of aggregation to get scale, technology and [access to] shopper marketing budgets,” says Hawkins, who also founded CART (Center for Advancing Retail & Technology), which, in partnership with the National Grocers Association, provided the initial research platform for Birdzi. “It’s providing in-store capabilities that few retailers have today.”

Birdzi is in discussions with up to eight retailers with 50 or more stores to use the app and associated technology, and it has verbal agreements with several hundred stores to aggregate their transaction data, says Shekar Raman, CEO and co-founder of Birdzi, who declined to provide company names. Birdzi is also talking with five manufacturers to join the program.

In Test Mode

Niemann began its Birdzi pilot last fall in one store by testing Wi-Fi sensors that can detect Wi-Fi-enabled smartphones. In January, the equipment was installed in six more stores. Also in January, an iPhone version of the app (an Android version will launch at the end of April) was made available to store associates, 300 of whom downloaded it. After “kicking the tires” for a month, Niemann allowed customers to download the app; to date, 800 have done so.

In addition to delivering targeted, location-based offers, the County Market app includes list-making, list-saving and product-search features. Store associates using the app “love the location finder,” Cook says, as well as the ability of family members to add items to the shopping list in their own apps that will pop up on the list of the person in the store. “It keeps people from forgetting things at the store,” he adds.

To further assist shoppers, the app organizes lists by aisle, while showing weekly ad specials by aisle and department. In addition, the app notifies shoppers when certain items they want — which they place on a “watch” list — are on sale. To make sure they’re paying attention, the app sends a push notification to shoppers as they enter the store.

Niemann plans to undertake a major launch of the platform to the rest of its 45 County Market stores in the near future, with three additional stores being added this year, according to Cook. (Niemann also operates 60 other outlets under different formats, including Sav-A-Lot and Ace Hardware.)

Meanwhile, Cook is testing location-based offers for store brands like the whipped cream/strawberries deal and a few cents-off promotions from Mondelez (results are not yet in). Unilever is developing some promotions as well. Cook also plans to try offers that motivate shoppers to try departments that they haven’t shopped lately.

Niemann has begun delivering its transaction data to Birdzi on a weekly basis, but has not yet received analysis of individual shopper transaction histories that would supplement the creation of targeted offers. This will ultimately enable a full-fledged loyalty program to take root — one of the “ultimate goals” of the program, he notes.

Before rolling out the system further, Niemann also wants to do more analysis on the impact of targeted mobile promotions to make sure it’s “putting out relevant offers that incent people,” Cook says. “The key is understanding the analytics.”

Among the elements Cook is assessing with Birdzi’s campaign management system are the frequency, timing and length of offers; the type of offer to send (cents-off, buy-one-get-one-free with another purchase); and the location of offers, including places outside the store (the fuel center or parking lot). In addition, Niemann plans to query shoppers about the program and test ways to get more customers to use it.

Cook is also eager to leverage “heat map” data generated by the Wi-Fi sensors on overall traffic, by time of day, and by department, as well as median time spent in the store, dwell time in specific areas and frequency of visits per week. This data can help with display positioning, and merchandising and labor scheduling, as well as the timing of promotions.

Beacons, Too

The Birdzi Wi-Fi sensors — two are installed per department at County Market test stores — can detect signals from Wi-Fi-enabled smartphones belonging to shoppers who haven’t downloaded the app, as well as those who have. (About 35 percent to 40 percent of customers have smartphones with Wi-Fi on.) However, unlike app users, these shoppers aren’t identified and the data is completely anonymous.

“We can’t find out who the person is until they opt in,” says Cook. Nonetheless, when the program rolls out to the rest of Niemann’s County Market stores, the retailer, in the interests of “full disclosure,” will likely post signs indicating that smartphones are being tracked.

Niemann will be augmenting the tracking capacity of the Wi-Fi sensors in each store by installing 15 to 20 Bluetooth-based beacons, which are designed to trigger location-based messages to the app.

All of Niemann’s stores run dual Wi-Fi networks that deliver free Internet access to customers and enable associates to use mobile ordering and receiving devices. The test stores send targeted messages to the phones via their own Wi-Fi networks or through wireless carriers such as 4G.

Under the Birdzi program, the cost of a retailer’s Wi-Fi and beacon sensors is covered by a cents-per-promotion fee paid by participating manufacturers; these funds are shared with retailers once the network costs are covered. Retailers pay only $25 to $35 per month per store for the retailer-branded app, as well as a few cents for each of their own promotions. Birdzi wants to keep the “cost of entry extremely low for retailers,” says Raman.

Niemann’s ultimate goal, says Cook, is to create “superusers” — shoppers who engage in the retailer’s “total digital experience,” from the website to social media to the smartphone. “Anybody’s goal is to build a community, because then you’ve captured their attention. And it’s not just one-way — they communicate with us, too.”