Dive Brief:
- Swiftly, a digital operating system for in-store shopping, has emerged from stealth and announced $15.6 million in seed funding, according to a press release sent to Grocery Dive. Backers include Ron Burkle, founder and managing partner of The Yucaipa Companies, along with Novel Private Equity and Mendacre. Tad Dickson, former CEO of Harris Teeter Supermarkets, is Swiftly's chairman.
- The Swiftly app allows users to create shopping lists, scan items as they shop, apply digital coupons, schedule home delivery on specified items and check out using their mobile device with a designated store employee who validates purchases. The app provides supermarkets with data-driven insights about shopper behavior and purchases.
- Zion Market, which operates stores in California, Texas and Georgia, has integrated Swiftly's system chain-wide and reports the app drives larger tickets and and more frequent shopping trips from its customers.
Dive Insight:
Despite the fact that most consumers still prefer to shop in the store, Swiftly is betting a significant number still crave the connectivity and convenience of online shopping to aid the in-store experience. The startup is also expecting retailers will want the added data on customer's in-store behavior and purchasing.
Shopper adoption is the key metric here, and it's hard to say for certain how that might unfold. In 2018, 18 million adults used a grocery app at least once a month, which is a 50% increase from the prior year, according to data from eMarketer.
On the one hand, consumers love apps like Starbucks' that offer the ability to buy as well as build rewards. Consumers also seem receptive to scan-and-go technologies, with 48% of online shoppers saying the tool would make shopping easier, according to GPShopper, while 43% would rather use a scan-and-go feature than wait in line.
On the other hand, scan-and-go programs haven't exactly caught fire in grocery. Walmart scrapped its offering only four months after announcing plans to roll it out to 100 stores. Shoppers reportedly didn’t see the benefit of doing more work and managing their purchases while shopping. Reports also noted theft was a problem. Walmart recently rolled out an updated scan-and-go program in Canada, and has expanded a program called Checkout With Me that lets employees use handheld scanners to process customers' orders.
The numbers from test case Zion Market appear promising. The chain reported 17% customer engagement with Swiftly’s platform. The data also shows that Swiftly is driving over 25% of both product and payment volume for the brand. The average Swiftly shopper is expected to spend 1.5 times more than an average customer and typically visits a store location every 10 days compared to the average of 14 days.
As Walmart and Amazon continue to make advances in technology, turnkey solutions like Swiftly say they can help competing grocers keep up. Chains across the country are taking a look at emerging solutions and carefully testing the most promising options, all while keeping an eye on the bottom line.
