Lauren Forristal1 year
Wegmans, the popular supermarket chain, will kill off its in-store scan-and-go app this Sunday, September 18, 2022. The company informed customers of the news in an email yesterday, stating that it experienced too many losses from the Wegmans SCAN program to continue making the mobile app available to users.
“Unfortunately, the losses we are experiencing from this program prevent us from continuing to make it available in its current state,” CEO Colleen Wegman wrote in the email to customers. “We’ve learned a lot and we will continue to introduce new digital solutions to streamline your shopping experience for the future.”
As a “sign of gratitude” from the company, Wegmans applied a $20 coupon to each SCAN customer’s Shoppers Club accounts.
The @Wegmans scan app was such a boost for my grocery store productivity. Sad to see it go. I'll miss it as I stand in the check-out line. pic.twitter.com/FC9ni7yH5o
— Dakota Cary (@DakotaInDC) September 12, 2022
While we know the SCAN app was hurting the business, Wegmans declined to share to TechCrunch just how much money it lost. The supermarket chain also didn’t offer any details on what its future plans were for “new digital solutions.”
“We’ve made the decision to turn off the app until we can make improvements that will meet the needs of our customers and business,” the company told us.
Wegmans SCAN app launched in 2020, during the pandemic, as a contactless option for in-store shoppers. The free mobile app allowed users to conveniently scan barcodes while grocery shopping and pay for items quicker at the self-checkout register.
Wegman’s losses from the app point to a common problem among companies that utilize in-store scan-and-go technology — shoplifting. Walmart temporarily suspended Scan and Go, its cashierless checkout program due to theft, an ex-Walmart exec told Business Insider in 2019. Walmart initially tested the technology in 2012 and has since relaunched the self-scanning system.
According to a 2018 study conducted by a professor at the University of Leicester, Adrian Beck, data showed that product loss could go up an extra 1% for 10% of a store’s scan-and-go sales.
Another reason why Wegmans could be dropping the app may be due to low user adoption. In 2020, the Wegmans SCAN app saw about 45% of its total installs, with around 142,000 downloads, data from Sensor Tower estimates. The mobile app market intelligence firm told TechCrunch that the Wegmans SCAN app has reached approximately 319,000 installs to date.
When compared to a similar in-store scan-and-go app, Sainsbury’s SmartShop, the Wegmans scan app has fewer installs. SmartShop launched two years earlier than Wegmans SCAN and now has risen to about 3.6 million installs, said Sensor Tower.
As someone deeply entrenched in retail technology and consumer behavior, the demise of Wegmans' in-store scan-and-go app reflects a nuanced intersection of multiple factors impacting the retail landscape. This decision wasn't haphazard; it was prompted by a myriad of issues, each of which warrants scrutiny.
The use of in-store scan-and-go technology emerged as a potential game-changer, especially amid the pandemic, offering a seamless, contactless shopping experience. Yet, Wegmans' decision to discontinue it was multi-faceted. Firstly, the underlying losses attributed to the Wegmans SCAN program were significant, compelling the CEO, Colleen Wegman, to address the issue directly with customers.
One pivotal factor contributing to these losses was likely increased shoplifting facilitated by the app. It's a problem that has plagued various retailers exploring similar cashierless checkout systems. This aligns with prior cases, such as Walmart's temporary suspension of its Scan and Go program due to theft concerns.
Moreover, the app's performance was marred by low user adoption rates. Despite an initial surge during its launch in 2020, data from Sensor Tower estimates that only about 45% of total installs were realized, roughly around 142,000 downloads. In contrast, a similar app like Sainsbury’s SmartShop, which launched earlier, saw significantly higher adoption rates, boasting approximately 3.6 million installs, showcasing a stark discrepancy in consumer acceptance.
Wegmans' decision-making, as hinted in CEO Colleen Wegman's email, underscores a commitment to re-evaluate and introduce new digital solutions, reflecting an adapt-or-perish mentality in the fiercely competitive retail landscape. The company's offer of a $20 coupon as a token of appreciation further illustrates their dedication to customer satisfaction amid this transition.
This narrative sheds light on the intricate dynamics within retail tech, showcasing the fine balance between innovation, consumer behavior, and operational challenges that influence the fate of such digital ventures.
