Intuit Digs for Opportunity in the Ultra-Efficient Grocery Industry

Grocery stores are well-oiled machines, with the placement of every product carefully researched to guide the shopper from one item to the next. But even this process has some room for improvement.

Nearly everything in a grocery store has a bar code attached, but especially at smaller grocers, selling fruits and veggies is not as simple because these items are priced according to their weight. Intuit and Revel see this as an opportunity.

Intuit's Quickbooks Point of Sale for Grocery now integrates with the scales placed in the produce section of the grocery store. The scales weigh the produce and produce a bar code that can be scanned just like any boxed item.

"There's no reason they should have to re-enter that data at the register," said John Shapiro, director of product management for payments in the small business group at Intuit. "This frees time up to do other stuff."

Intuit is selling the idea that payments automation can also automate other tasks at the same time, a necessary step as Intuit and Revel attempt to move their existing mobile point of sale collaboration beyond restaurants and retail to include grocery stores and salons, an expansion the two companies announced this week.

Lots of technology and payment companies are already using mobile payments as a foot in the door for grocers. First Data and NCR are collaborating on new technology for grocers and Verifone is pushing beacons to improve customer engagement for smaller store chains. Grocers also face pressure from online grocery stores, a still small but fast growing market segment that's aggressively adding new technology—such as Fresh Direct's partnership with Samsung's new Web connected refrigerator. Even Aldi, a "no frills" chain that only recently started accepting credit card payments, is making a quick move into mobile technology.

"Having a solution that is more aligned with the needs of the store owner helps differentiate the Intuit solution, and if successfully deployed in the merchant environment it makes it much less likely the merchant will switch suppliers," said Tim Sloane, vice president of innovation at Mercator.

The smaller grocers are not only struggling to adapting to chip cards, but the incursion of digital technology that's more accessible for larger chains with bigger tech budgets, according to Shapiro. "Serving these segments is a matter of understanding the kind of pain they face in adjusting," Shapiro said.

Intuit's salon integration also pairs transactions with other tasks common for salons, such as appointment scheduling, paying for ad-on services with booked appointments, and commission payments for employees. Square is among Intuit and Revel's competitors in this vertical, offering a service that pairs appointments with Square's more recognizable tablet and smartphone card acceptance hardware.

Shapiro contends the link to Quickbooks software adds technology scale to the mobile point of sale system. "At salons they typically have to cobble together multiple solutions," he said.

For both grocers and salons, the collaboration with Revel fits into Intuit's strategy of pairing payments technology with automation in accounting, business planning, other merchant services.

"The point of sale or invoice allows the payment to fall into the background," Shapiro said. "The payment becomes part of a much broader single account."

Intuit would not answer a question on revenue sharing with Revel by deadline, and Revel did not return a request for comment.

For Revel, the benefit is a streamlined way to expand,  according to Sloane.

"The challenge for point of sale providers that implement on mobile platforms is that the markup is low compared to other custom solutions, a direct benefit to the merchant but the reduced margins make it harder for mobile point of sale providers to invest in software needed to address multiple categories," Sloane said.