Ms Professor only

Scott D. Macke

Grantham University

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Abstract

This paper explains how Stop & Shop incorporated business analytics, the advantages and disadvantages Stop & Shop’s “Scan It!” service, how I would assess the maturity level of the use of analytics and the privacy concerns.

Keywords: business analytics, trends, business strategy

Stop & Shop-Scan IT!

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Stop & Shop saw many benefits in incorporating business analytics. When customers used the scanner, it allows Stop & Shop to build a purchase history of items. The purchase history allows Stop & Shop to meet the demands faster moving products that consumers are acquiring. It also allows Stop & Shop to monitor trends of consumers. Knowing customer’s purchasing trends help Stop & Shop know when by more bulk product thus allowing for both costs savings for the customer and increased profitability for themselves.

By knowing the customers purchase habits, Stop & Shop can also develop triggers for offers on items that the customers have not bought in a few weeks. The “Scan It!” system can remind the consumer that a product has not been purchased in a few weeks and offer coupons on that article. This technology can also provide triggers to articles that complement each other. For example, when the customer scans a package of spaghetti it triggers a reminder to purchase spaghetti sauce, garlic toast and salad items. The use of the “Scan-It!” tool tracks where the customer is located in the store. This also will set a trigger to offer the customer coupons on articles to purchase while they are in that specific isle. All of these triggers can ultimately increase sales for Stop & Shop.

By allowing the customer to scan that keep track of their spending totals gives the customers the sense that they are managing their spending habits. This gives Stop & Shop markets the opportunity to differentiate itself from other markets and building customer loyalty to their business. The customer feels that Stop & Shop are saving them time and money by allowing them to be in charge of their shopping experience. Stop & Shop is saving them money by providing coupons on items that they had come to purchase. It also saves them time in the market by allowing them to scan and bag their items and avoiding long checkout lines. The benefit of “Scan It” to Stop & Shop is reducing staffing at check-out aisles. With faster service at the check-outs, it reduces the need to have more check-out lanes open thus reducing staff levels.

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Stop & Shop also found that there are disadvantages to the use of the “Scan It!”. Employee education was the first obstacle that needed to be addressed. Employees needed to be trained to provide customer service to new users of the service. Stop & Shop did not want customers to become aggravated by a service that was introduced to provide them with a better shopping experience. There is also a risk of theft. Some customers may not scan items before they put them in their shopping bag or scan a generic item while placing a name brand item into their shopping bag. To deter this risk, Stop & Shop only lets loyalty card holders the use of the “Scan It!” product. They also incorporated an audit system into the check-out process. This verification allows check-out employees to compare the receipt to the items that are actually in the shopper’s bag. Another disadvantage is that not all items in the store have a barcode that can be scanned. Items in the produce aisle are sold by weight. Therefore, Stop & Shop had to create a way that the customer could weigh the item so that a barcode could be produced and scanned.

As President of Stop & Shop, I would assess use of the use of analytics by first making sure that the IS Strategy, the organizational strategy are in line with our business strategy. This includes alignment of the corporate culture, the incentive systems, the metrics used to measure success of the initiatives and the processes for using analytics with the objective of building competitive advantage through analytics (Pearlson & Saunders, 2013). By doing this, I will ensure that we gain the competitive advantage in our market. I would also make sure that we have strong leadership in the use of analytics. I would appoint a CIO for the company so that we have a subject matter expert overseeing the program. The CIO is an important component of the management team though it does not drive the decision-making process for the organization.

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Stop & Shop customers may have some concerns about their privacy while using the “Scan It!” electronic device. It is important to ensure customers that the system has up to date security and control measures to protect them from identity theft. Identity theft can lead to significant losses for the company. To protect the consumer, Stop & Shop will need to limit accessibility to their databases. Synchronizing all mechanisms and protocols built into the network and computer operating systems will help to protect the system from unauthorized access (Pearlson & Saunders, 2013). Stop & Shop customers also need to be aware of what information and how that information is being used by Stop & Shop.

Stop & Shop has managed to create customer loyalty by creating a service that helps them to save money. This service not only helps the customer save money, it also captures information about customer purchasing trends that can be used to control inventory levels in Stop & Shop warehouses. This increases Stop & Shop’s sales while providing the customer with a service that no other business is currently providing.

References Frappaolo, C. (2006). Knowledge Management. Southern Gate Chichester, West Sussex, England: Capstone Publishing Ltd. Pearlson, K. E., & Saunders, C. S. (2013). Managing & Using Information Systems. Hoboken: John Wiley & Sons.