“Our promise to the consumer is that we will make retail shopping easier, faster and more fun. With intelligent shopping carts, we are revolutionising the shopping experience in physical stores,” claims Ahti Leväaho, Chief Marketing Officer at Finnish tech company Smartcart.
Ahti Leväaho – with a nickname, “Levis”, that a business partner gave him because of his “non-international” and hard-to-pronounce first name – is excited about all the opportunities that the new digital era brings to retail. In his current role as Chief Marketing Officer at Smartcart, a Finnish technology company that provides intelligent shopping carts for retail, he is certain that brick-and-mortar stores are becoming even more important in our technology-enabled age, but only when retailers and advertisers succeed in making a relevant and instantly gratifying digital connection with their consumers.
At SEMPL, he and Ph.D. Anna Bäckström, a business leader and Adjunct Professor of Social Psychology at the University of Helsinki, will take attendees through an in-depth journey of changes in consumer behaviour in a digitalised retail shopping environment.
How to thrive in a chaotic and volatile world?
Ahti Leväaho and Anna Bäckström understand the digital age in which we live in as an ‘Era of Flux’, characterised by chaos, volatility and unpredictability. In such an environment, the merchants and brands are much less in in charge compared to the empowered and critical consumer, says Leväaho. “Consumers can be very predictable, but due to direct and immediate access to trillions of terabytes of structured and easy-to-find information, their decision-making power has been exponentially amplified. Simultaneously brand loyalty regarding final product and service purchase decisions in retail has decreased and preferences have become increasingly volatile,” he stressed. But this uncertain period also brings many opportunities for the companies that will shape and execute every activity with the individual consumer in mind. The verified behavior of consumers must be at the core of the constantly updated and developed value proposition of companies. This is especially true for physical retail shops that gain a new meaning and relevance for the consumers through digitalisation.
Although the figures show that retail sales are shifting online, Leväaho states that a large proportion of groceries, between 80 and 95%, is still sold in physical stores. “Online grocery sales often mean that customers order products online, and then pick them up in physical stores or other delivery outposts. I do not believe that majority of grocery sales will ever move online, as shopping is also a social event. We visit shops that are close to our working place or home and we always meet other people there. The basic human need for a social encounter will never disappear,” he said.
In the retail grocery shops, up to 75% of the final product purchasing decisions are made during the shopping run. “It’s pretty tough mathematics. Visiting a hypermarket or supermarket, an average consumer pays actively attention to approximately 0.3-0.8% of all the products displayed. Up to 25-30% of these products actively noticed by the consumer will end up in the shopping cart. The challenge for FMCG brands is how they cost-efficiently increase the probability of being relevantly visible during shopping rounds and how to communicate personally with the customer when he or she is about to make the final purchase decision.”
“Scan, pack and pay”
Smartcart promises the shopping experience to be simpler, faster and more fun. “There is a tablet attached to the shopping cart enabling the consumer to swipe his or her personal shopping list to the 10-12” tablet from the smart phone application provided by the retailer. Individual consumers, if they so choose, are identified in the very beginning of the shopping round – this gives the retailer and brands substantially more ‘play time’ with the consumer. By interacting with the pad, the consumer immediately finds the most convenient route to the products on the personal shopping list. The consumer can also see the relevant personal offers and promotions or get instant information about new products. Once they take the product off the shelf, the consumer can immediately scan it with the pad giving them information about the number and the value of products in their cart. The consumer can pack them immediately into their own bags and without queuing, go to the cashier where our system automatically communicates with the retailer’s cashier system. We are talking about the ‘Scan, Pack and Pay’ service,” explains Leväaho.
This technology enables retailers and brands to identify a shopping consumer, which means that the customer can be certain that they will not be bothered by advertising messages that are not relevant for them at that specific time. “It gives a consumer more power and it makes the shopping experience more convenient.
Retailers and brands usually want to encourage impulsive and not-so-controlled purchases, but Leväaho argues that “once you simplify the process of finding a product and paying for it, the consumers want to know what else the store has to offer. When you satisfy the basic needs of a consumer in an instantly gratifying, easier and fun way, you increase his or her ‘appetite’. That way you give a consumer more time to think about what else he or she would like to have.”
Intelligent shopping carts increase sales
Smartcart intelligent shopping cart solutions have already been implemented in more than 100 hyper- and supermarkets in Finland owned and operated by the largest Finnish grocery chain Kesko and its merchants. “The merchants serve their customers better and sell more with the introduction of our carts. The value of the shopping cart has increased. The variety of the products that the consumers buy is more comprehensive. Last but not least, consumers are more satisfied because they get immediate help – up to 90% of our shopping cart users are satisfied or very satisfied with the service,” Leväaho explains the effects of this simplified shopping experience.
What are the benefits for advertisers? “As retailers largely ‘own’ the customer, the FMCG brands don’t have a direct, cost-efficient access to the consumers in the stores which would enable a a two-way communication with them, but Smartcart enables brands to have that. Advertisers usually want to know how many people actually bought an advertised product against a certain marketing cost and we can give them this information. Based on the research that we have conducted during the past two years in Finland, regardless of the product category, the purchase conversion – how many have seen advertising through Smartcart tablet vs how many have bought the advertised product during the same shopping round – is between 5 to 15%, which is an extremely high conversion rate. Furthermore, the advertiser pays only for verified net contacts. Our system generates online customer insight data of for instance where in the store the consumer has been moving, which products of the advertiser he or she bought and which type of advertising messages and promotions are most efficient when measured by purchase conversion. Customer insight data is a highly valuable asset for both retailers and brands. Often it is even more important to know what the customer didn’t buy and why. This enables brands to understand the consumer much more efficiently and in-depth. Revolutionizing, don’t you think?,” explains Leväaho.
Don’t count the people you reach, reach the people that count.
Prior to his current position, Ahti Leväaho has worked as Deputy MD of Ogilvy Finland, CEO of Mobilemode in Hong Kong, MD of Metro, Suomi24 and URHOtv, Deputy CEO of Canal Digital Finland and Sales Group Director of Kärkimedia. When asked why he decided to take a leap into the world of retail technology and marketing, he says: “I’m not a technology guy to my background, but my work has always been related to technology. I’m excited about what it enables. How does it empower people and how does it effect business? Although I love technology, I’m also very critical about it. In my opinion, we have to keep it simple, fun and gratifying.”
In his role of Chief Marketing Officer he works with creative and media agencies on a daily basis. “I am a huge fan of the late Sir David Ogilvy, one of the icons of the advertising community, also because of one of his simple slogans: ‘Don’t count the people you reach, reach the people that count.’ Regardless if we are talking about the TV, newspapers, social media or intelligent shopping carts, advertisers should always focus on the empowered consumer because he or she is truly in charge.”
In his words, advertising and media agencies should focus even more on the individual consumer through big data, artificial intelligence, algorithms, data mining and stop disturbing consumers with irrelevant messages. “Always think of consumer first; don’t focus on consumer groups, but on individuals,” concludes Leväaho.