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Grocer uses free Wi-Fi to keep it fresh

Stop & Shop supermarket customers enjoy free Wi-Fi -- an investment that results in so-called soft benefits.

Lugging your laptop to the grocery store doesn't seem like a trend with a lot of traction, but at least one New England supermarket chain is convinced that providing Internet access is a convenience customers will come to appreciate just as they do ATMs and in-store pharmacies.

Quincy, Mass.-based Stop & Shop Supermarket Co., which operates 348 stores in New England, New York and New Jersey, is rolling out free Wi-Fi service in its stores that have cafe seating. The company has hired ICOA Inc., a Rhode Island provider of "neutral-host" wireless, to install and maintain the network, which will run independently of the chain's business network. Customers logging in to the Stop & Shop in-store Web page will be exhorted to "Sip, savor and surf."

Mike Drumm, new ventures product manager for Stop & Shop, said Wi-Fi access was a natural fit with Stop & Shop's emphasis in recent years on prepared foods that can be eaten on premises -- or grabbed to go. The chain dishes up meals from Boston Market for shoppers in need of nourishment, as well as offering Starbucks or Dunkin' Donuts coffee for folks who might want to linger.

"We thought the Wi-Fi would be another convenience for our customers, to make shopping not so much of a chore," Drumm said.

It's not immediately clear how having a laptop makes shopping less of a chore, said Gartner Research analyst Ken Dulaney. However, there is a business case for Wi-Fi grocery stores, said Dulaney, who covers the mobile and wireless markets.

"There are a lot of salespeople who drive around everyday. They need a place to have lunch and check e-mail," he said. "It's why McDonald's put Wi-Fi in their shops."

Many retailers deploy Wi-Fi for their own business needs, such as managing stock in the back room or checking shelves, said Dulaney. "They've got some extra bandwidth and they figure they'll open it up to anybody who shows up, customers or delivery people who might need to check back with their networks. And they might as well, because there is no downside. "

Stop & Shop, however, is running the network separately, just for its customers. Jennifer Nieman, a consultant with ICOA who works on the Stop & Shop contract, points to research from ICOA's largest customer, quick-service restaurant chain Panera Bread, showing that free Wi-Fi access for customers translated to sales.

"This brings feet from the street, and it really does affect their register rates," Nieman said. "Even though it is free to the user, the return [on investment] can be extraordinarily better than for a pay-for network."

Stop & Shop did not disclose the terms of its ICOA contract, except to say the investment is relatively modest. Nieman said ICOA charges a one-time cost for the hardware, typically about $1,000 per store, and a monthly fee for running the service at each location. As for return on investment, Stop & Shop's Drumm said it's too early to tell. The company launched its Wi-Fi service just before Christmas in a new urban neighborhood store in Dorchester, Mass., and it seems to be popular, "with quite a few repeat users," Drumm said.

The trend for Wi-Fi at supermarkets is growing, Nieman said. ICOA, for example, is currently working with Kroger Inc., which is deploying wireless in the Starbucks cafes it now has in some of its supermarkets, and the provider has a number of other supermarket customers who have not yet gone public with plans.

Nieman sees the offering as more than another marketing gimmick. "It's a generous offering. There are not that many places that are giving free Wi-Fi to their communities," she said. "You don't see a Verizon or SBC giving away service."

Gartner's Dulaney warned that the added amenity -- if it does confer a benefit -- could easily be adopted by the biggest threat to traditional supermarkets, namely Wal-Mart. "They could duplicate this in a second. Wal-Mart's already got Wi-Fi everywhere. All they have to do is spin off a section for guests," he said.

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