The growth in online grocery shopping has caused Tesco to look to new methods for improving the accuracy of orders and delivery times. The new smart trolleys enable several orders to be picked simultaneously, improving efficiencies and customer service, which should boost online sales.

Tesco, the UK's largest grocery retailer, is now upgrading the trolleys used for picking online orders placed via its website through a deal with Xperience, a Northern Ireland-based IT company. Xperience is supplying 300 Tesco stores with at least 5,000 pre-imaged Xybernaut Atigo tablet PCs.

The Atigo-driven computer system is cart-mounted and used by personal shoppers to pick online orders. The computer screen will display shopping lists from online customers' shopping orders, with on-screen prompts showing the relevant items and their locations. An attached bar code reader then allows items to be efficiently scanned into the system before moving on to the next item.

As one of the world's largest online supermarkets, suffers from formidable logistical complexities in processing and delivering the right orders at the right time. These are issues that the new smart trolleys are intended to simplify.

The deal is valued at £6m (US$11.4m) over the next four years, though the operational efficiencies gained from the move could reap far greater benefits for Tesco, if the technology helps to maintain's strong recent performance. In the first half of 2004, sales grew by 27% to £307m and profits increased by 95% to £15m.

The widespread introduction of such new technology brings its risks, but the new smart trolleys have been made to connect with Tesco's existing back-end system through Wi-Fi technology to make the integration as straightforward as possible. The clear display and hardy exterior of the computer also minimises the risk of error and breakage during use.

One of the key concerns of online grocery shoppers are incorrect orders delivered at inconvenient times. If the new system improves these services through more reliable picking and processing methods, then the added consumer confidence should translate into sales success.

(c) 2004 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.