The future of shopping
By Tim Weber
BBC News Online business editor in Rheinberg, Germany
Few industries can match retailing for cut-throat competition. Jostling for the attention of consumers,
Tesco, Wal-Mart and other giant retailers are working hard to finetune their store formats.
Now hi-tech emerges as a tool to build market share. BBC News
Online visited the "Future Store" in Rheinberg, Germany, set up by
the world's fifth-largest retail group, Metro.
The intelligent scale doesn't like our bunch of bananas.
When we had put tomatoes on the scale, its digital camera took just a
split second to recognise the produce, weigh it and print a bar-coded
price tag.
Veggie Vision: Scales
No wait at a checkout to have them weighed. No need to find "tomatoes" recognises produce by sight
on a 50-button display.
But now the scale is baffled, and offers four choices: Are we weighing
bananas, chicory salad, long beans or avocados?
Touching the banana logo on the screen solves the slip-up. "The bunch
of bananas was probably too large for the camera," says an apologetic
shop assistant.
Welcome to Metro's Future Store.
New and old
At first glance the supermarket looks disappointingly normal.
Yes, to German shoppers the layout may be revolutionary, with wide
"freshness aisles" right at the entrance, offering a vast and pleasantly
displayed array of fresh fish, meats, vegetables, and the mouth-watering
smell of freshly baked bread and donuts.
TECHNOLOGY TESTBED
Intelligent Scales
Information terminals
Personal Shopping Assistants
(tablet computers)
Electronic price labels
Electronic advertising displays
Smart shelves
Smart self check-outs
Staff PDAs
RFID supply-chain
management
Nothing new here for many French and UK shoppers.
The real revolution, though, lies with nifty machines like the Intelligent
Scales using IBM's Veggie Vision software.
The machines, so the claim goes, can identify most produce by sight,
regardless of whether it is packed in a plastic bag or not.
Tablet computers on the trolley
help shoppers to find their way
around the store
Marketing the easy way
The good people of Rheinberg a town of 30,000 in the west of Germany are willing participants in this hi-tech
experiment in retailing.
Not sure what to buy? In key sections - multimedia, baby care, hair colours, wine, meat, and fruit and vegetables
- touchscreen terminals give in-depth information.
How a particular wine tastes, which food to have with it, and a
smattering of the wine region's history - in colour, interactive, and on
demand as a print-out.
Learn how to cook asparagus and skin tomatoes. Get recipes for the meat
and veg available and in season (courtesy of Nestle, whose products just
happen to crop up in some of the recipes).
Above the aisles, large flat screens show still pictures and videos of
special offers and promotions.
"Customers buy more when we have two screens next to each other
showing the same product," says Metro's Holger Schneidewindt.
Infoterminals bring information
- and a sales pitch
A quick scan of a product barcode, a few taps on a handheld computer,
and the wireless network changes the display on the large flat screen above a shelf groaning with bottles of
vodka and schnapps.
For managers of the 4,000 square metre store, it is marketing the easy way.
Don't scream for ice cream
Personal Shopping Assistants (PSA) are the clincher, though - small Wincor Nixdorf tablet computers clipped to
shopping trolleys and activated with a loyalty card.
Want some ice cream but don't know where to find it? Type "ice cream"
on the touch screen and you are directed to the correct aisle - floor plan
included.
Regular purchases show up on a favourites list, with price and location.
Special offers are flagged up as you move from section to section.
Write your shopping list online - at home or work - and soon it will be
automatically downloaded to the PSA.
The integrated scanner gives you both a running total of your shopping
and fast-track treatment at the check-out.
Personal Shopping Assistants
cut down on waiting time at the
checkout
Smart logistics
The shop's shelves sport 30,000 wireless electronic price labels that can be changed at the push of a button.
Smart self-scan check-outs, meanwhile, tackle fraud by comparing the weight of your shopping bag with the
items you scanned and prevent underage drinking by prompting staff to check out customers scanning alcoholic
products.
RFID EXPLAINED
RFID: Radio Frequency
Identification
Tag: tiny microchip with
unique ID number attached to
small antenna
Reader: Tags going past readers
are read in split second and
reported to data base
The Future Store's biggest potential, though, is its use of RFID tags, a
kind of "talking barcodes".
Talking barcodes that change
our lifes
Q&A: RFID explained
With the help of software from business process expert SAP, Metro
now knows in detail how supplies move from the Essen distribution
centre on to trucks, into the Rheinberg store room, and on to the shop floor.
The result: the inventory is always up-to-date, shelves are rarely empty, and losses are down.
At its most revolutionary, smart shelves using RFID - currently tested on Gilette razor blades, Pantene shampoo
and Philadelphia cream cheese - alert staff when the shop's shelves are getting empty or cheese packs are past
their sell-by date.
Are Rheinbergers geeks?
One year into the experiment, the people of Rheinberg have taken to the
store with gusto.
"Customers come to the store more frequently, store loyalty is up and
sales are up 30%," says Metro spokesman Albrecht von Truchsess.
To a large part that is due to the store's new "fresh and easy" format.
But more than 70% of customers have used the various technologies at
least once, and a hard core of regular users (21% for PSAs, 53% for the
scales) is growing strongly.
Smart shelves use radio tags to
control stocks
And it is the over-60s, not just the geeks of this rural area, who are among the keenest to use the new
technology.
Looking past the bottom line
But does the Future Store make a profit?
Not in the traditional sense. Ultimately, it is just a large laboratory, using
customised bleeding-edge technology.
"One can't talk about return on investment for such a store," says Metro's
Mr von Truchsess.
And anyway, for Metro's 45 technology partners, this is a giant "Bring
Your Own Technology" party, where each partner's costs are neither
disclosed nor added up.
For Metro, meanwhile, it is an opportunity to find out whether better
service and a streamlined supply chain can help it compete with
Germany's ultra-cheap grocery discounters like Lidl and Aldi.
Customers can wipe clean the
RFID tags on their goods
But it is also a way to identify potential trouble, for example to see whether radio interference can trip over large
RFID systems.
There is just one problem. Surveys suggest that some customers dazzled by the snazzy technology think prices
must be higher as well.
Not so, says Metro's Mr von Truchsess.
But he admits: "There will always be certain areas where customers will not accept a high-technology store".
http://news.bbc.co.uk/1/hi/business/3712261.stm
29/11/09