Sunday, July 02, 2000

Techno advances move to retailers' selling floors

Systems range from self-checkouts to bridal-registry orders

By Lisa Biank Fasig
The Cincinnati Enquirer

        Only in today's society could ringing up your own groceries or a best friend's wedding gift represent examples of good service. But they are.

(Luis Sanchez photos)
| ZOOM |
        Retailers have long embraced the use of behind-the-scenes technology to help them operate faster and cheaper. Product-fulfillment systems are so advanced that grocery and apparel chains can automatically reorder items at the moment they are scanned — one box of macaroni sold, one box listed on order.

        But more and more, these same merchants are pulling technological advances onto the sales floor, for shoppers to use.

        Witness Federated Department Stores, introducing in Kenwood Lazarus and 43 other stores computer kiosks that let shoppers order bridal registry gifts. And Kroger, Meijer and Thriftway, which are installing self-checkout systems in Greater Cincinnati stores.

        These days, Joe and Jane Consumer are scanning their own macaroni.

| ZOOM |
        “I'm a fan of any kind of techno-gadget,” said Jayne Homsher, a Madeira telecommunications consultant who shops in many cities. “If it has a whiz-bang effect to it, I'm going to go to it.”

        It's gone beyond self-serve gas and ATM machines. Retailers say interactive gizmos, such as self-scan checkout lanes and computer kiosks that let shoppers order out-of-store services and merchandise, enhance service by providing more options, fast.

        But financial and employment issues factor in as well, retail experts say. Though on-floor technology is more expensive than traditional services, the products that work well will pay for themselves.

        “Today's customer has little time to spare on any activity,” said Faye Glancz, chief financial officer of Federated Systems Group, the technology center of Federated Department Stores. “She cannot afford, nor will she tolerate, unnecessarily waiting for service.”

        The trick is putting the best gadgets on the floor, and waiting for them to be embraced. Not all shoppers love these products now, but retail experts say they will.

| ZOOM |
        “I think you'll see some leading retailers with plans in the next year,” said Joanne Walter, vice president/future retailing for NCR Corp.'s Retail Solutions Group in Atlanta. NCR develops Internet kiosks and self-checkout systems for retailers.

        “People need immediate answers, immediate service, and the pace only increases.”         While it's far from Rosie the Robo-maid of Jetsons fame, in-store technology is designed primarily to do human work. The motivation behind it, then, involves human issues: Time-thirsting shoppers, low unemployment and a new way for retailers to compete.

        “Especially since we're in a robust economy, service becomes a crucial issue,” said Eugene Fram, a consumer-behavior expert and J. Warren McClure professor of marketing at the Rochester Institute of Technology. “If you can handle it more quickly — if I have a time-compressed lifestyle — it's more helpful.”

        Sometimes the systems don't have to be faster, they just have to keep hands busy, said Henry Karp, president of Montreal-based Optimal Robotics Corp., which makes U-Scan self-checkout lanes.

  U-Scan allows shoppers to ring up, bag and pay for their own groceries in designated express lanes.
  • Shoppers bring their items to the lane and scan each item purchased.
  • Shoppers place each scanned item in a bag, which is rigged to a weight scale.
  • The scale compares product weight to information on the scan, to prevent people from bagging items that have not been rung up.
  • Shoppers pay a cash machine that can provide change or they can swipe a debit card.
  • If there are any problems, a nearby cashier will assist.
  Registry kiosks
  Federated Department Stores' partnership with lets shoppers register and order gifts from home or at selected stores. Locally, a computer “selling” kiosk operates at the Kenwood Towne Centre Lazarus.
  • The kiosk screen includes several options in the form of buttons to be touched. For example, the user can touch “wedding” or “other occasion.”
  • The user then enters, using fingers on a screen keyboard, the name of the party registered.
  • A list of registry gifts is provided (printing not available until the fall). The shopper can select a gift for purchase and enter shipping information. The order is gift-wrapped and normally shipped within two days.
  • The kiosks are equipped so credit card information can be entered with a swipe.
        “A typical U-Scan, express lane transaction takes anywhere between three and five minutes,” Mr. Karp said. “Is that comparable to the experience with a regular cashier? Probably. But the consumers believe it's faster because they're occupied.”

        The result: Kroger sources said 20 percent of their express customers use U-Scan. “They actually line up by U-Scan when other lines are open,” said John Magyar, technology operations manager of area Kroger stores.

        Efforts to speed up transactions are evident in less-visible ways. Atlanta-based Federated Services Group (FSG) is experimenting with a roving check-out system, similar to those at rental car drop-offs, allowing the worker to move around the sales floor. Kroger's front-end checkout system manages inventory by tracking time, date and location of every item sold: Two cans of cling peaches, 9-9:30 a.m. Saturday, aisle five, Hyde Park.

        Technology offers savings as well. Ms. Walter of NCR, whose customers include Albertson's, Federated Department Stores and Wal-Mart, said the cost of a standard checkout lane — used four hours a day over five years — is $110,000. Ninety percent of that cost is for labor.

        A self-checkout can run two to three times that cost, but will still be cheaper, over time, when eliminating labor costs.

        Retailers also are using technology as a way to build brand awareness and stay competitive. So the more whistles on the device, the better.

        Optimal Robotics is developing self-checkouts that can be used in full-order lanes as well as express, something that has Kroger's interest. Federated wants to expand its kiosk capabilities to the Internet, so shoppers can order items not on the floor. Some merchants, such as the Gap, already offer such features.

        “Today's customer is more technology savvy than ever before,” said Ms. Glancz of FSG. “She accepts service facilitated by technology and in some cases expects it.”

        Some grocery kiosks are being used for film drop-off, or to pre-order something from the deli. NCR is developing kiosks that not only scan a product such as a bottle of wine, but lets the shopper know how many bottles are left in the store and whether it goes better with meat or fish.

        Ideally, kiosks will be used to develop customer profiles, just as long-term sales associates do.

        “I saw a little kid, maybe seven or eight, taking his grandmother through (U-Scan),” said Mr. Magyar of Kroger. “He was punching the screen and she was actually laughing through it.”         Not everyone likes new retail technology — some people fear they'll make a mistake or they simply prefer human contact. But experts predict the most cost-effective systems will stay, just as did self-serve gas and ATM machines.

        “When you think about the ATM, when it was first introduced the banks thought it was horrendous, because they had friendly tellers,” said Ms. Walter.

        In fact, some sectors of the market immediately prefer interactive systems because it gives consumers more control. Mr. Karp of Optimal Robotics said U-Scan is popular among the elderly because this group tends to want to check the charge against promotions.

        And some people just like the novelty that technology brings to otherwise mundane chores.

        “We usually use it because we laugh a lot in the lines,” said Cincinnati shopper Colleen Cushard, who uses U-Scan at Meijer stores. “Everybody in line seems to be talking to each other.”

        Ms. Cushard concedes that she makes mistakes with U-Scan, and sometimes she has trouble when trying to weigh items such as bulk candy. But this doesn't deter her.

        Same goes for Beata Janecka of Forest Park.

        “The problem is, the instructions aren't really clear on how to scan the item,” she said. “I do (use it) because sometimes the lines are ridiculous.”

        On the other hand, a Kroger checkout system in Tennessee, where shoppers scan their entire order as they shop, is not as well accepted because shoppers tend to overcharge themselves too often.

        “This is a matter of education, it'll take time before people will get used to it,” said Mr. Fram. “There's a learning curve that occurs with all of these situations.”

        Often, shoppers don't even realize the technology at play when using a kiosk, swish-and-charge gas key chain or video membership card. But they are likely to prefer the convenience.

        “In 40 years the technology that will be around, you and I personally may not like,” said Steve Jagers, Kroger spokesman. “But to the people who grow up with it, it'll be easy, run-of-the-mill, everyday life.”


- Techno advances move to retailers' selling floors
Familiar brands face unfamiliar challenges
However you spell it, 'dot-com' officially enters lexicon
A family restaurant, in every sense of the word
Feeling like fraud goes away over time
Into thin air?: Unhitching from the desktop
Mission for Mars: music dominance
Small-business diary
What's the Buzz?