Supermarkets have always had their share of bargain hunters, coupon clippers and shoppers in search of serious discounts, but digital technology is making it ever-easier for penny pinchers to leave the paper coupons and Sunday circulars behind while still finding the best deals. And, as the technology makes it easier for consumers to seek out the lowest prices, it also provides retailers with new opportunities to curry customer loyalty with price-matching programs that do the work and ensure that shoppers spend their savings in the stores.
U.S. food prices rose 3.4% from December 2013 to December 2014, according to the Consumer Price Index, and prices for food consumed at home jumped 3.7%. Prices are forecast to increase another 2% to 3% this year, and certain crops may see even bigger increases as a result of the ongoing drought in California. In Britain, food inflation has been falling and it’s on track to tumble further this year as oil prices fall and supermarket chains continue to slug it out for market share.
Traditional supermarkets in the U.K. and the U.S. are struggling to keep up with discounters and other newer rivals that go all out to compete on price, a trend that’s keeping food inflation down even when commodity costs are rising. In both countries, digital technology is also playing an increasing role in driving food pricing trends, largely by providing consumers with easy ways to seek out the lowest prices.
British supermarket chain Morrisons created a price-matching program that includes discount rivals ALDI and Lidl as well as its more traditional competitors Tesco, Sainsbury’s and ASDA. Under the Match & More program, if a rival has a lower price, the Morrisons shopper gets the difference in loyalty points that go toward discount vouchers. The program is integrated into the retailer’s mobile application and is also available to Morrisons’ online customers, whose orders are fulfilled through Ocado, as Diginomica reported.
In the U.S., Wal-Mart also launched an app last year designed to make it easier for customers to ensure they’re getting the lowest prices while keeping the spending in the store. Wal-Mart’s Savings Catcher app lets users scan their receipts after each shopping trip, then seeks out the sales circulars of neighboring stores. If there’s a lower price, the customer gets the difference on a Wal-Mart e-gift card that they can spend at any time at the store or at walmart.com.
About six months after its launch, Wal-Mart tweaked the program, letting users know that certain products including fresh produce and bakery items wouldn’t be included anymore because their lack of consistent UPC codes at different stores make it difficult to make apples-to-apples comparisons.
Retailers aren’t the only ones adapting mobile technology to bargain-hunting buyers. Third-party mobile applications such as the ScanLife app from ScanBuy lets users find product information by scanning UPC and QR codes, and also offers price comparisons both online and at nearby retail stores, to help bargain hunters find the lowest prices on everything they want to buy. Once they find the best deal, shoppers can buy right from their phones.
Some 23.7 million consumers have downloaded the app since it launched in 2005, said Vice President of Marketing Maryann Moschides.
“Consumers are sophisticated and savvy when it comes to bargain shopping, although comparative pricing, product promotions and coupons the one of important factors when it comes to using our app, also of great value is the ability to establish communication and a trusted relationship with brands and retailers,” she said.
ScanBuy, which works with retailers and restaurants including Bloomingdale’s, Starbucks, Sonic and Taco Bell on mobile promotions, is also in early talks with as-yet unnamed retailers to incorporate the ScanLife app into their loyalty programs, she said.
“There is a strong value proposition for retailers to integrate price-matching programs and pricing strategies with the ScanLife mobile app. It allows retailers to acquire new customers and sales opportunities from consumers ready to purchase, as well as, allows them to compete with online retailers more easily.”
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