Independent operators are developing new partnerships with wholesalers and forging alliances with retailers to gain access to a broader range of technology tools.
Although even basic point-of-sale scanning systems are still only on the wish list of some small operators, others have moved further afield into automated direct-store-delivery and other advanced programs, such as electronic marketing.
"The stores that are partnering in technology with their wholesalers or, along with other [independents] with manufacturers, are going to have that competitive edge," said Marvin Imus, vice president and co-owner of Paw Paw Shopping Center, Paw Paw, Mich. "In our industry that edge can mean the difference between survival and not surviving."
Paw Paw's wholesaler, Spartan Stores, Grand Rapids, Mich., has heavily supported the retailer's various initiatives. Data used for Paw Paw's electronic marketing program is, for example, stored on Spartan's mainframe, and much of the store's technology was obtained on discount through Spartan.
"With my partnership with my wholesaler, we don't have to put up much of the resources," Imus said. "We can maintain a much better technological edge than the other competitors in our market."
"You have to keep up with the big guys, even though you're small," said Joanne Tedmori, systems analyst for the 10-store Super
A Foods, Paramount, Calif. "Technology puts all the tools in your hands. It's a vital tool to help you run your business."
After Tedmori researches a potential project, Super A's wholesaler, Certified Grocers of California, Los Angeles, helps negotiate equipment purchases. "They get a better deal because they can go in to the manufacturer and say, 'We can sell this to 200 stores. What kind of break can you give us?' "
Many independent retailers say they are in a unique situation in which partnerships with wholesalers bring technology within reach, while their small size allows them to move with much more agility than a large chain.
"You can make a change in a heartbeat that literally is going to make a difference on whether or not you're a leader or whether you become a follower," said Jeff Kollymer, director of store development at Smitty's, an eight-store operation based in Springfield, Mo.
Independent retailers interviewed by SN said they anticipate an expansion in the use of technology over the next few years, a trend driven partly by new strategies chains have launched, but also by evolving shopper attitudes.
"We're probably going to see an increase [in technology]," said Brian Geraghty, manager of E.R. Smith Enterprises, a two-store operation in Winnetka, Ill. Geraghty added that the changing retail climate obliges the independent to stay attuned.
A recent move by Super A Foods to install automated teller machines in its stores came as a direct response to similar programs launched by competing stores. With chains like Lucky Stores, Dublin, Calif., rolling out ATMs and in-store banks, Super A's ATM program became a necessity.
"Some things are forced upon you, like ATMs," Tedmori said. "Everyone else had them. It just took time for us to see if we really needed them because the customers want it."
Not all of the technology investments larger chains make merit a response from the independent, Tedmori added. Such decisions rest upon several factors, not the least of which is understanding what a store needs.
"We monitor the big chains, but we make decisions based on our size compared with theirs on what's cost-effective," she said. Technology investments that have been crucial to Super A include scanners, ATMs and check-approval networks, Tedmori said.
One area Super A feels could be improved is managing its employee time and attendance. But finding the right system for a small labor force is proving difficult.
"A lot of the chains are going with time and attendance [automated programs]. We're looking, but I haven't found what I like," she said. "There's a lot of software out there that lets the employees do what they want, when they want. I'm not really happy with that. I'm looking for a time-clock system that won't let people punch in or out outside of the schedule."
For Pruett's Enterprises, a five-store operation in Hixson, Texas, technology such as scanners, computers for receiving DSD vendors and automated accounts-payable and payroll programs is seen as essential.
"The supermarket business changes, technology-wise, a lot," said Veda Dent, controller and manager of electronic data processing. "There's always new software coming out, new ideas in shelf tags and front-end computers."
But for an independent, one eye must always be on the price and return on investment. "We have to take our time, look at things and make sure it's something we're going to use for as long as possible," she said. "With as much as technology changes, you could redo your supermarket every year and have something different."
Since Pruett's has a limited amount of employee time to devote to POS systems, its wholesaler, Fleming Cos., Oklahoma City, has taken on the task of compiling and sending weekly POS price changes to the retailer's mainframe.
"[Fleming] helped us get our scanners in and they support a lot of our prices. We don't have the manpower to manually key in the amount of changes and new items that go through a store every week," Dent said. "Because we just couldn't do that work, their support right now is very crucial."
Pruett's, whose five stores operate autonomously for the most part, hopes that by upgrading store systems, it can unify its operation. "A lot of technology changes will be in the office level, with new software to try and control the stores from a central location," Dent said. "We do some things in the office, as much as we can, but there's a lot that's still done independently at each store."
At Paw Paw Shopping Center, competition has bred innovation. With two Meijer superstores eight miles away and another independent retailer moving in across the street, one way Paw Paw can maintain its footing is to beat its competitors on productivity -- not price.
"Meijer has the finances and the clout to do substantial damage, so as a single-store outfit, I've got to provide to my customers everything they can provide to them, so we can downplay the price issue," said Paw Paw's Imus.
"I don't want to go price-to-price, because I literally can't," he added. "So I've got to provide to customers a scanning environment so they know exactly what they're buying."
Ensuring the accuracy of scan data is no small feat, but it is a necessary step before moving forward with new technology programs, he said.
"Scan data supplies all other areas: continuous replenishment, electronic marketing, space analysis, category marketing," Imus said. "If I can 'nail' that one pool of information, I've got my foot in the door" to explore such advanced initiatives.
Paw Paw has initiated a card-based electronic marketing system that tracks customer purchases and determines individual shopping patterns.
"By direct marketing to the consumer, you can [target] them without your competition knowing exactly what you're doing," Imus said. "The consumer recognizes, 'I've got a hometown store that's providing the services, the quality and the items I want, and in my mailbox I've got a personalized direct-market piece."
Since the program began, sales have been healthy and have increased in "the double digits," Imus said. "Can we say that's directly due to electronic marketing? In my gut I can say, 'Yeah, it makes sense. We're doing a good job.'