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The grocery store and supermarket shopping industries have combined annual revenues in the
hundreds of billions of dollars. With little variation in available item selection and price as well
as less money being spent on groceries in the downtrodden economy, competition for customer
loyalty is stiff. By using analytics to help process buying habits of its customers, Stop & Shop,
a Quincy, Massachusetts‐based grocer, tried to get a better grasp on the hard‐to‐understand
concept of customer loyalty in grocery shopping. Concept Of Customer Loyalty In Grocery Shopping Essay Paper
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Stop & Shop introduced Scan It!, a portable electronic device for customers shopping in its
stores. The device allowed customers to “scan and bag” products, expediting checkout times
at the end of their shopping trip. Additionally, the device offered deals based on the location
of the scanner (and therefore the customer) in the store. Location‐specific discounts in real time
became increasingly popular among customers as use of Scan It! grew by 10% in both the first
and second quarters after its introduction. The most beneficial aspect of the Scan It!, however,
came with the powerful analytics software built into the device by Modiv Media in which Stop
& Shop owns a minority interest. The software kept track of each customer's past and present
purchasing habits in order to individualize coupons in real time for the customer.
The scanner resulted in three positive trends for Stop & Shop. Customer loyalty grew, allowing
the company to secure an increased customer base than area demographics would predict.
Additionally, each shopper's basket size increased as the individually tailored coupons enticed
customers to buy more. Lastly, Stop & Shop's customer base grew as word of mouth marketing
brought in more customers to try the state‐of‐the‐art device.
However, after a couple of years, Stop & Shop saw customer adoption plateau. In October
2011, the grocer created the Scan It! App via the help of freelancers. The Scan It! App could
be used for iPhone and Android. By eliminating the need to sign in and retrieve a scanner at
the store, customer adoption of the device continued its upward climb. Given that customers
became increasingly concerned about saving money while shopping, the Scan It! App also has
a built in budgeting software to allow customers to track their spending more effectively. Ads
for the new app proclaimed: “New Mobile App Allows Customers to Shop, Bag, and Tally
Their Grocery Order with Their Personal iPhone® and Android™ Devices.” Scan It! was
heralded as “a first of its kind grocery app that allows customers to use their personal mobile
device to scan, tally, and bag their groceries while they shop.”
Stop & Shop had bundled an app that not only rewarded customers who shopped at its stores
by helping them save money but also tracked information on sales, which the company loaded
into its data warehouse. The IT team of Stop & Shop performed analyses based on the data in
the data warehouse and provided business insights regarding its customers to Stop & Shop
management. Analytics then helped Stop & Shop put the right items on its shelves to maximize sales and create customer loyalty. Concept Of Customer Loyalty In Grocery Shopping Essay Paper
Question 1
(a) Based on the case study, appraise the strategic use of information resources by:
Discussing whether the IT assets (described partially in terms of IT Infrastructure; Information
Repository) and IT capabilities (described partially in terms of Technical Skills) of Stop & Shop
enables the company to create and sustain a competitive advantage using the RBV framework.
Provide an overall rating (low, moderate or high) in terms of competitive advantage creation
and sustainability. Explain your answers with case facts.
(Word Limit: Maximum 500 words; Mark Allocation: Maximum 37 marks)
(b) Discuss the key activities of Stop & Shop by identifying the maturity level that Stop &
Shop has exhibited. Justify your answers above with case facts.
(Word Limit: Maximum 200 words each; Mark Allocation: Maximum 13 marks)Concept Of Customer Loyalty In Grocery Shopping Essay Paper
Step-by-step
Step 1/2(a) Stop & Shop has effectively used information resources to create and sustain a competitive advantage using the Resource-Based View (RBV) framework. Stop & Shop introduced Scan It!, a portable electronic device for customers shopping in its stores, which allowed customers to scan and bag products, expediting checkout times and offered deals based on the location of the scanner. Additionally, the device kept track of each customer's past and present purchasing habits to individualize coupons in real-time for the customer. The scanner resulted in three positive trends for Stop & Shop: customer loyalty grew, each shopper's basket size increased, and the customer base grew through word of mouth marketing.
Stop & Shop's IT infrastructure and information repository allowed the company to store and process large amounts of customer data, which provided them with a competitive advantage. The powerful analytics software built into the device by Modiv Media, in which Stop & Shop owns a minority interest, kept track of each customer's past and present purchasing habits in order to individualize coupons in real-time for the customer. Stop & Shop's IT capabilities in terms of technical skills allowed them to create the Scan It! App via the help of freelancers, which eliminated the need to sign in and retrieve a scanner at the store. The app also had a built-in budgeting software to allow customers to track their spending more effectively.
Overall, Stop & Shop's strategic use of information resources has enabled the company to create and sustain a high level of competitive advantage. The company has effectively used IT assets and capabilities to collect and analyze customer data, personalize coupons, increase customer loyalty, and attract new customers through word-of-mouth marketing Concept Of Customer Loyalty In Grocery Shopping Essay Paper.
Step 2/2
(b) The key activities of Stop & Shop exhibit a high level of maturity in terms of customer relationship management, data analytics, and mobile app development. Stop & Shop's use of customer data to personalize coupons and increase customer loyalty demonstrates a high level of maturity in customer relationship management. The company's use of analytics to put the right items on its shelves to maximize sales and create customer loyalty demonstrates a high level of maturity in data analytics. The development of the Scan It! App via the help of freelancers and the inclusion of a built-in budgeting software demonstrates a high level of maturity in mobile app development.
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Stop & Shop has exhibited a high level of maturity in its use of information resources to create and sustain a competitive advantage. The company has effectively used IT assets and capabilities to collect and analyze customer data, personalize coupons, increase customer loyalty, and attract new customers through word-of-mouth marketing. The development of the Scan It! App and the inclusion of a built-in budgeting software demonstrate a high level of maturity in mobile app development.
Final answer
Overall, Stop & Shop has demonstrated a high level of maturity in its use of information resources to create and sustain a competitive advantage, which has enabled the company to succeed in the highly competitive grocery store and supermarket shopping industries Concept Of Customer Loyalty In Grocery Shopping Essay Paper
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