FOOD BUSINESSES GO BACK TO HIGH SCHOOL

It’s estimated that 50 per cent of Aussies will have a smartphone by the end of this year. Food businesses and retailers are jumping on the smartphone app bandwagon to maximise their profits. So how will this change the way we shop, and how businesses market themselves? The Milk Moustache’s Naeun Kim investigates.

It’s always hard to keep up with the cool kids at school. One day it’s black nail polish; the next it’s cherry lipgloss.

It’s even harder in the food retail world. Who knew they could be so clique-y? With most food businesses and retail stores, a Facebook page is the new personalised website. Risk not having one, and your business is virtually invisible on the social map. But now it seems even a Facebook page is nearing its end, and the next lust-have accessory for any food business is a smartphone app.

Woolworths, Coles and Domino’s Pizza are leading the trend in Australia with their free apps, redesigning retail horizons. Domino’s claims to have Australia’s first and most successful iPhone app released by a food business, after revealing that its app has generated $2 million worth of sales in just twelve weeks. The free app lets you browse the menu, order and customise your pizzas, and even has a live pizza tracker so you know exactly when to change out of your Snuggie for the delivery man. Released in November 2009, Domino’s soon boasted a 39.2 per cent rise in net profit for the first six months, with revenue up 5.3 per cent.

Chief executive, Don Meij, told SmartCompany that the company initially had a very conservative estimate of the sales potential of the app.

“It was a marketing initiative, but it had to have a business case too. The sales have been seven times our expectations,” he said.

And like what any popular kid would tell you, it takes a long time to look as good as they do.

“[Making the app] is sort of like making a movie, with the amount of storyboarding that’s involved, and the time spent on navigation and the link,” he said.

With every popular group, there are the minions. These are the kids who will have the same outfit as their leader within an hour, and consequently start a congo line of copy-cat outfits. Coles followed Domino’s soon after with its Shopmate app, which allows customers to find recipes, create shopping lists, and browse products and special items. Since its launch in late 2009, it has been downloaded over 500,000 times.

Coles spokesperson, Jim Cooper, said, “It’s had various upgrades since the launch…We will continue to upgrade where we think we can improve things for our customers.”

And upgrade they should. Fellow minion Woolies has come out shining as the favourite, with over 1.1 million downloads since the app was launched in August this year. Users can find their nearest store via GPS, access Everyday Rewards offers, and fuel savings vouchers. You can even scan a barcode in-store and add it to your virtual shopping list.

Innovation Program Manager at Woolworths Supermarkets, Has Fakira, said, “Customers are constantly telling us that they want an easier way to find products on supermarket shelves…This is an innovative use of technology that will give our customers the ability to create a shopping list and use it to navigate around their local store, all from the palm of their hand.”

But with every popular kid, there seems to be a taller and prettier one at another school. Domino’s, Coles and Woolies may lead the pack down under, but Tesco’s South Korean subsidiary Homeplus is cool on an international level. In August, Homeplus opened the world’s first ‘virtual store’ in the Seoul subway. The walls of the Seonreung subway station in downtown Seoul came to life with virtual displays of over 500 of Tesco Homeplus’ most popular products, with barcodes. Customers scan the barcodes using a Homeplus app, and get the products delivered to their door.

Executive Vice President of Corporate Affairs at Tesco Homeplus, DW Seol, said, “The idea is that busy commuters can scan their groceries on their way to work in the morning and, as long as their order is placed before 1.00pm, their items will be delivered home that same evening.”

Google’s research reveals that Australia has the second highest smartphone penetration in the world, with 37 per cent of Aussies owning a smartphone. Smartphone users here have an average of 25 apps, eight of which are paid for. Contrastingly, smartphone users in the USA and Britain have an average of 23 apps.

So, with a large smartphone community, will Australian food retailers ever don a ‘virtual store’ app? With apps fast becoming the new business card, more Australian food businesses are slowly graduating from childish Facebook pages to chic, modern smartphone apps. It may be a while until we see a virtual store at Central Station, but we can count on our popular kids to lead the pack in the right direction.

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