Technology having its day in the UK September 18, 2000
-A look into the near future, courtesy of Safeway Plc.
by Al Urbanski
When we asked Jay Walker what would be technology's biggest influence on the shopping experience five years from now, the founder of Priceline responded it would be the disconnection of pricing and payment from the bricks-and-mortar store. Furthermore, said Walker, Net-based, hand-held communications devices will allow retailers and marketers to interact with shoppers in the aisles, making grocery shopping a more immediate and enjoyable experience.
In the United Kingdom, that day is close at hand, if experiments now being conducted by Safeway plc turn out to the good. The British chain has long seen technology as a means of gaining an edge in the marketplace. It was one of the first retailers to embrace Symbol Technologies' self-scanning checkout system for shoppers, and it's seen remarkable results from the Shop & Go system it has been refining for some five years now.
Safeway says the "Handiscanner" units used by shoppers to scan items as they traverse the aisles make for higher per-customer rings and lower labor costs due to a need for fewer checkouts. That's all well and good, but more remarkable is that Safeway actually took a stab at solving the supermarket's most vexing customer service problem: The best customers are forced to wait in the longest lines, while casual customers get run through special express lanes.
Some 25 percent of shoppers take advantage of the Shop & Go system at the 171 Safeway U.K. stores where it is in place. On average, it takes them one minute and 45 seconds to pay for 150 worth of groceries. Occasionally they are asked to have their orders double-checked at a conventional checkout, but normally Safeway's Shop & Go customers are whisking their overflowing baskets past the low-rent express shoppers, leaving them forlorn in their queues while they merrily load their Range Rovers in the car park. Chip-chip, cheerio, and toodleoo-shopping the way it should be.
And until competitors devise comparable services, such easy payment systems go much farther than card-based incentives toward building customer loyalty. A Safeway survey showed that shoppers hooked on Shop & Go travel an average of 2.5 kilometers out of their way to visit a store with the Handiscanners. It's also a user-friendly system, argues Safeway business solutions manager Jeremy Wyman. "It only takes three minutes to train a customer how to use it, one minute for teenagers," he says with a chortle.
We caught Wyman's act recently at IBM's T.j. Watson Research Center in Yorktown Heights, N.Y., during a conference for "ease of use" experts, whose job it is to take the latest spawn of the nation's computer geeks and turn it into products that can actually be understood and used by the rest of us.
Wyman was there to report on Safeway's latest excursion into the retail technology stratosphere, a test in which 500 customers were given Palm Pilots they could use to scan products at home, which are then entered onto an automatic-replenishment shopping list transmitted to Safeway. "We believe in the future of remote shopping," says Wyman. "The problem right now is that grocery shoppers with the most purchasing power aren't the biggest users of the Net. We had to create an electronic `back of the envelope' for them to make their shopping lists."
That turned out to be the Palm Pilots, which, interacting with Safeway's database, store five months of purchase data for each customer. Wyman says that consumers testing the system now buy more from Safeway because they don't forget as many items as they did when hastily scratching out lists on the backs of real paper envelopes. "That means fewer trips to the cstore and more money for Safeway," says Wyman.
What challenges and opportunities await American supermarketers as they start to take fuller advantage of digital communications?
While it may be easier than you think to train shoppers to use these systems, it may be a lot harder than you think to get them to try them. "Recruitment is a challenge," Wyman says. "We had to hire people like amateur actors to get in customers' faces in the store to get them to try it. It's funny, because you're saying to customers, 'We trust you,' and that's a message that doesn't get across easily."
Rearranging Bricks and Mortar
Most vexing will be deciding how to reconfigure bricks-and-mortar stores to fit the new way of doing business. "The biggest change will be the mix of products in the store. We'll know when a customer needs a new toothbrush, and we can just mail it to her when the time comes," Wyman says. "And will we need to devote all that space to soap powder, Corn Flakes, and Coke? We can take a lot of that space and fill it with higher-margin products."
Wyman does not foresee an end to the bricks-and-mortar grocery store, however. "We've not been able to figure out how a huge commercial organization can make money delivering groceries," he says. "And if the Postal Service gets in the business of delivering groceries, we're in big trouble."
When he says "we," we assume he means "people expecting to ever eat again."
08/15/2000 Supermarket Business
Copyright (c) 2000 Bell & Howell Information and Learning Company. All rights reserved.
Copyright Howfrey Communications, Inc. Jun 15, 2000
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