In the third part of just-food’s briefing on self-service in retail, Glynn Davis looks at two of the key trends driving innovation in the sector – the need to cater for weekly shopping and the rise of mobile phone technology.
While much of the activity has been around developing compact units – for small basket sizes – there has also latterly been a desire to handle the bigger shopping baskets and this has led to the creation of tunnel scanning.
US retailer Kroger is testing new tunnel scanning technology from Fujitsu at its store in Hebron in Kentucky. It is the world’s first store to be equipped with such technology, which Kroger calls its ‘Advantage Checkout’.
It is designed for very large baskets (four or five trolleys in volume), and involves shoppers placing their items on the belt before they move under the scanner. Kellett says it has the capacity to read barcodes from any angle and also read letters and potentially take a photograph for optical recognition of goods.
Chris Hjelm, chief investment officer at Kroger, has stated: “We are currently evaluating and looking to expand the Advantage Checkout into additional Kroger stores to determine its ultimate potential. The response from both customers and associates has exceeded our expectations.”
What both enjoy are levels of reading accuracy (98.5%) that reduces the bane of self-service checkouts – manual interventions. This is where a store assistant has to intervene as a result of a failure of the device to read a barcode. They can also be called in to deal with customer errors and for age verification when shoppers are purchasing knives and alcohol etcetera.
Other manufacturers are also developing tunnel scanners but are finding there are still issues to be overcome. Both US technology company NCR and retail hardware and software supplier Wincor Nixdorf have stated that the packing/bagging element is the nut that still needs to be cracked.
Gordon Klein, product manager at Wincor Nixdorf, says: “The scanner is so fast – at 60 articles per minute – the new challenge is packing. We’ve a new traffic jam in the bagging area and at the moment we’re designing a special solution for this challenge.”
When these issues have been addressed, Klein predicts a great future for the technology. “There will be big demand for these units for heavy, big basket sizes and for those customers who’ve not used a self scanning gun. They will not replace scan and bag but they will take away some of the traditional lanes [in food stores].”
As well as the bagging issue, NCR area industry director for retail and hospitality John Curnow says he is also sceptical of how beneficial to retailers and customers are the 98% scanning rates that are now being claimed by his rivals. “What about the other two per cent?” he asks.
A solution could be the use of 3D recognition technology in the scanning process, which has until now been too costly to implement. Fujitsu retail consultant Sarah Kellett, for one, questions whether cost is still an issue and she expects 3D recognition technology to be a feature of self-service checkouts in the near future.
One of the more possible consequences is that customers’ own devices will replace the existing hand-held self-scanning units that are currently used by a number of retailers including Casino and Auchan in France, as well as Coop in Switzerland.
“In-store scanners will have only a short time-frame because customers will not want to pick up another hand held device in addition to their mobile phone,” Ken Duffy, marketing manager for retail store solutions at IBM, says. Nevertheless, he notes that retailers will easily be able to re-purpose the scanners for use, say, in the stock room.
An example of shoppers using their own mobiles can be seen at the Ahold-owned US chain Stop & Shop where the retailer has worked with Modiv Media to produce an iPhone app that duplicates its existing Scan It! Hand held device (from Motorola) that has been in use for nearly four years and accounts for 10% of its sales.
From the customers’ own mobile phone it is now possible for them to scan goods, check-out and receive personalised offers at the three trial stores. There is no doubt that this sort of personalisation will play an increasingly big part in customers’ shopping journeys in the future.
Personalisation plays a role in a development from US technology company NCR. John Curnow, area industry director for retail and hospitality at NCR, says its personalisation software platform enables self-service devices to recognise a customer’s pre-set preferences. For instance, this could involve them highlighting that they are left-handed (making it easier to use a kiosk) and selecting the payment card that they prefer to use (so they don’t have to enter their card details each time).
These preferences can be set through a retailer’s existing loyalty scheme or via the newly introduced NCR Enterprise Preference Manager. These preferences are then recognised on any self-service device that the shopper subsequently uses in the retailers’ stores.
Kiosks sit comfortably in this personalisation eco-system, which might make life easier for shoppers bearing in mind that such devices can be used for an almost unlimited array of functions. However, Duffy believes kiosks also have a limited shelf-life because shoppers will be performing most kiosk functions on their own mobile devices in the near future.
Undoubtedly laying the foundations for more personalisation is the move by Tesco to introduce wi-fi into its stores, which will lead to many imitators. This will link consumers closely with retailers and lead to the interchange of much information between them.
Tesco recognises the current desire for customers to scan products in-store and compare prices with other retailers but, rather than potentially losing sales to rivals, Curnow says the UK retailer can instead use it as an opportunity to drive sales.
“Why wouldn’t a retailer say: ‘We realise you are looking at televisions so here’s a discount voucher if you buy a set from us today’? It’s a brilliant opportunity to utilise the power of [real-time customer] data that wi-fi will bring to retailers,” he suggests.
Such innovations are merely scratching the surface of what mobile devices will do for self-service activities in food retailers’ stores. They, along with customers’ rapid adoption of such devices, will be the big driving forces in changing the way technology influences the relationship between retailers and consumers within the physical store.