New York company debuts pure mobile-only grocery checkout
While AmazonFresh, FreshDirect and Peapod have offered consumers varying degrees of online and mobile grocery ordering for several years, the in-store experience could use some help.
Companies such as Diebold, NCR and Scandit, among others, have introduced systems that allow consumers to bypass traditional checkout lines and use a special kiosk to pay for their groceries after scanning items via a smartphone app.
New York-based FutureProof Retail now has its own twist on the concept and today introduced what it said is the first start-to-finish, secure self-checkout mobile app.
Grocery stores that deploy the white-label product do not need to install a special kiosk for customers to complete their orders because the app handles the entire shopping process.
"We think grocery stores are the ideal place to start because everyone needs food and it's where you have repeat shoppers," FutureProof Founder Di Di Chan told Mobile Payments Today Sunday at the National Retail Federation's annual Big Show in New York City.
"We think once you solve for this issue in grocery stores, you can expand to other shopping verticals [like big-box retail]," she said.
Two grocery stores in California are testing the mobile checkout app. El Rancho Marketplace is one of them, according to the FutureProof website. A "fast fashion" merchant in Hong Kong is also testing the service.
The company will demo Mobile Checkout at the National Grocer's Association show at the Mirage Hotel and Casino in Las Vegas Feb. 28 through March 2.
To use Mobile Checkout, consumers download a participating grocer's app from either the Apple App Store or Google Play and enter an email address to create an account. The app then prompts the user to take a selfie as a visual form of identification for the grocer. A user adds a payment mechanism (a debit or credit card) near the end of their first checkout experience with the grocer.
Participating grocers' apps are available for iOS with Android. FutureProof plans to add the in-app Apple Pay option within the next two weeks.
FutureProof CEOWill Hogben said that the company's pitch to grocers is that the app allows a better overall customer experience, which should lead to improved customer retention. But he joked about a more clever reason for grocers to align with FutureProof and for consumers to use the app.
"The pitch I would like to make is the humanitarian pitch," he said. "If you look at the amount of time people spend waiting in line at a grocery store right now, some studies average it as 30 minutes per week. If you add that up, each year people will wait three full human lifetimes at the average grocery store."
FutureProof needed to solve two big issues with the mobile checkout process: produce sales and shoplifting. Both areas are linked in some ways.
FutureProof can combat the produce issue one of two ways. Users can enter produce without a UPC via a product code they can usually find on a nearby sign.
The app recognizes the item and the shopper can then weigh it on special scales that FutureProof deploys in the store. The user then scans the displayed weight and the final price appears as a line item in the app.
Grocers also can use their own scales, but the user will need to take a picture of the final weight to receive the correct price.
Hogben believes FutureProof approaches the shoplifting dilemma in a different way from other providers.
"What we have done is develop a set of algorithms that assess the risk around particular items and around particular purchasers,” he said. "At the checkout, 90 percent of the time, you check yourself out and leave. But at certain times, you'll get your bags checked [by the grocer]. The system will picks items that are the high-risk items and the grocer might need to reweigh apples to make sure the price is correct."
From a technical standpoint, grocers can add an API to their backend system that turns consumers' smartphones into another register. They also can integrate their loyalty program within the app, make product suggestions based on what's in a user's cart and give shoppers the ability to scan manufacturers' coupons.
FutureProof said it will continue to seek partnerships for Mobile Checkout and it appears for now that smaller chains and independent stores will be its focus.
"Some of the grocers that are more interested to [move forward with technology] are the smaller merchants because they see they have to have an answer [to bigger retailers] on the front end," Steve Hinton, FutureProof's chief marketing officer, told Mobile Payments Today.
Will Hernandez / Will Hernandez has 14 years of experience ranging from newspapers to wire services and trade publications. Before becoming Editor of MobilePaymentsToday.com, he spent two years as the content manager for PaymentsJournal.com, a leading payments industry news aggregator and information hub published by Mercator Advisory Group. Will spent four years covering the payments industry as an associate editor for multiple publications in SourceMedia's Payments Group based in Chicago.