Q&A: CEO says device helps grocery shoppers save time and money
Paul Schaut is, by his own account, a serial operator. Unlike an entrepreneur who comes up with an idea and must convince others that it will work, Schaut has learned to recognize other people’s good ideas and run their businesses.
Before his current job as CEO of Modiv Media in Quincy, the Essex resident had several other chief executive roles at tech companies. They include Tira Wireless, a mobile technology company; Performaworks, a performance management solutions provider; and Engage, a digital marketing company.
In March 2007, he helped arrange the merger of Boston-based MobileLime and Quincy-based Cuesol to form Modiv Media. He has been CEO at Modiv, a digital marketing company with 33 employees, since March of this year.
One of Modiv’s products is the Modiv Shopper, a handheld device now in more than 100 Stop & Shop grocery stores. It allows customers to scan their purchases as they place them in their carts, and quickly tally and pay at the end of the shopping trip using a self-checkout lane. In addition, the device targets shoppers with offers and advertisements based on their past and anticipated buying choices.
What is Modiv’s purpose?
What Modiv does is, we bring the power of data-driven digital marketing into the grocery store. Not on the Web, but it’s the same concept. We’re matching advertisers and marketers with their shoppers, but instead of sitting at a PC, they’re in the grocery store. Sounds easy when you say it that way, but it’s very hard to do. You can’t put a device on the cart that consumers are overwhelmed by. It has to be this right balance of simplicity and recognized value. And everybody, including ourselves, in the years prior tried putting out big fancy tablets and all this neat stuff. We’ve tried pilots with pretty neat stuff, fantastic stuff, but it was just overwhelming. When you go into shopping mode in a grocery store, you’re in a shopping mode. You turn brain-dead. You go to shop, save time and save money. So we took out all the weird stuff that sounds great, but would just scare folks. And we got into a very simple solution that in fact allows them to save time and save money.
What have been the results for the stores?
The key is that the basket size per shopper that’s using this is increasing, and that the store is seeing bigger baskets running through self-checkout. So therefore, the customer is saving time. … The self-checkout is predominantly 12-and-under basket size. With our solution, you can be a self-checkout customer with a $100-plus basket size. My wife’s a big user; she (typically has) a more-than-$100 basket size. She saves time and she bags the way she wants. ... Her fruits are in one bag, and her cleaning stuff is in another bag. And she’s not waiting for a 16- or 17-year-old person to decide what’s going to go in what, and she’s not bagging herself at the end of the shopping trip – she’s bagging as she’s going. She controls the quality of the bagging and she controls her time getting out of the store.
Now that the Modiv Shopper is a success, where does that put the company?
Our value chain of constituents that have to smile at the end of the day are the retailer, the shopper and ... the manufacturers that are trying to sell (to) a grocery. Each of those three constituents has to smile or what we do doesn’t work and doesn’t scale.
And we’ve unlocked the code or figured that out as a business, and that’s validated by the results for the retailer, for the shopper, and for the manufacturer. So having them smile now, being in 100 stores for a year, what we thought would be of value – and we waved our arms and we said, “This is going to be great” and they said, “Yeah, we’ll try it” – now it actually works.
So now we take that to other stores and other chains, and instead of saying that we think this might work, we’re saying, this does work.
How does Modiv plan to expand in the future beyond groceries?
We’ll expand that sector to anything that has a high-frequency, high-unit environment. So, you can imagine other big box retailers that have grocery-type items, but they have other things as well. That would be another sector.
Fortunately and unfortunately, my background and my experience is such that I have a lot of scar tissue on what not to do as well as what to do. And the key for any business and any team is to focus. We’ve figured out how to go from a single customer in an area and create a business model that actually works, and now we’re expanding that.
Julie Onufrak may be reached at email@example.com.