The supermarket front end, more than any other area of the store, is where retailers today are investing in new systems in the battle to win over the hearts and wallets of customers.
e personal-computer-based front-end systems, retailers routinely now track vast amounts of customer-purchase data, accept a broad range of electronic-payment options and are even beginning to integrate advanced paging and other communications systems into the point-of-sale network.
Yet, retailers and wholesaler agree, further changes and systems improvements, from full-screen monitors to customer self-scanning devices, will transform the checkout process dramatically over the next several years. Here are highlights of what executives had to say about front-end systems:
SN: What changes do you see in the realm of front-end systems today?
Don Reeve: POS systems today offer retailers more opportunity than ever to differentiate themselves from their competitors by allowing nontraditional approaches to customer checkout. Graphics-based technology, open-systems architectures and reducing time and effort to develop custom enhancements are just a few of the opportunities.
Tom Dooner: There are exciting things happening at the front end. It's a revolution largely being driven by the transition from proprietary to open POS systems. With this new approach, all parties involved in POS will benefit.
Ed Oertli: The key to the front end is having a system that will grow with you. Hardware will continue to change over the years, but having an open system that allows you to move to the next platform without major changes is truly powerful.
Dick Lester: The PC-based systems are setting a new level of cost expectation for front-end systems. They're becoming increasingly inexpensive compared with proprietary systems. The software being developed for these systems makes them fully functional. They aren't just stand-alone PCs. They're part of a local area network.
Reeve: The customer checkout process is the last opportunity during the shopping experience for supermarket operators to impress their customers. These systems can be used as effective marketing tools.
SN: Could you elaborate on the marketing implications?
David Reed: The front end is very important. My vision of the front end in the 'future store' is full-motion video right at the shelf edge integrated all the way to the front end.
Full-motion video at the front end could be used for produce recognition or showing a CNN snippet. It can also be used to communicate a message from the company president. It doesn't have to be commercials. When customers check in via a kiosk by swiping a card, for instance, they could be connected to the database engine of the store and receive customized shopping help, such as personalized promotions for that week.
Lester: Companies will be able to integrate these devices in ways not easily possible with proprietary systems. For example, you may see high-resolution monitors with touch screens or video ads in-lane or elsewhere in the store. They might be used for personal-identification systems using fingerprints or displaying on-screen a cardholder's picture or signature to compare against a check.
Dooner: Consumers will benefit from more interesting, informative and even entertaining monitors while they check out. Cashiers will gain access to more user-friendly interfaces that help reduce training time and prompt them through specific transactions. In stores with frequent-shopper programs, the systems can provide cashiers with information that will allow them to establish a dialogue with customers and make shoppers feel that store personnel know them.
The systems also are smart enough to broadcast messages to managers alerting them, for instance, that a key customer is in a certain lane making a large purchase. The manager can greet the customer personally and thank him or her for their business. The system can also alert a manager about a situation requiring assistance, such as resolving a check-cashing problem.
Oertli: Monitors are the first devices that have allowed us to convey information other than item and price to customers in the store. We can offer promotional information.
In the future, retailers may even be able to market that monitor space. The shoppers in the store are mobile. They're not sitting in front of a television. They're out in the field making buying decisions. They're walking around and shopping. What better audience to advertise and promote to?
That capability is underutilized now, but in the future it will become a major methodology for promoting products and services, maybe even including things like computers or oil-and-lube changes.
SN: How dynamic do you think these changes will be?
Reed: What you're going for is the full functionality of an ATM. There are good stories to tell about the ATM and how you can migrate that concept over to the kiosk in the supermarket. Lester: Having nonproprietary, open PC systems with standard hardware interfaces means many different people can be creative about the things that can be linked into it.
Because it isn't a proprietary network in the store means you can link other devices such as kiosks, coupon dispensers or monitors throughout the store or the complex into the same system. You're going to see some very creative things hooked in to the front end in the next few years.
Oertli: There are a lot more changes coming in the front end. There will be more and more customer information available on those displays. For instance, if a store's inventory-control system is tied into the system and a customer is looking for a specific product, the cashier could find out exactly where the product is, and if it's out of stock, when it'll be coming in. Virtually anything you might want to communicate to a customer can be done effectively via a PC terminal.
Reed: Wouldn't it be neat if you could have a personalized headset with a radio-frequency system? As a shopper goes through the store, she could be receiving personalized messages or an invitation to stop by a department she has not visited recently.
I'm going to take it to a higher level and this relates to the lack of employees. We're turning into a service industry, and in doing that, we're driving up the minimum wage and the need to have more people in the store with the customers. We can manage some of that through automation.
There's software available today that can identify top customers, and through a pager, alert managers when they are at the register. Wouldn't it be nice for the manager to then go up and say, "Mrs. Jones, it's great to see you again." You can take better care of those people. It's the old 80/20 rule: 20% of your customers are bringing in the lion's share of the profit.
In the future, all department managers will have digital pagers so they can be on the floor working with the customers more often and then be paged when they are needed elsewhere in the store.
Let your imagination run wild. If there's a shortage of employees, and technology is advancing at a fast pace, you can pick areas to automate and help increase employee productivity. You can do that today by becoming personally connected to the customer.
