UP-FRONT INCENTIVES

DENISE ZIMMERMAN

The shopping "experience" may take place in the aisles, but the store image customers take home with them is also influenced largely by what happens at the point of sale.

It is there in a few square feet, then, that retailers are channeling their efforts to enhance shoppers' perceptions about the store. Specifically, retailers are targeting discounts to the individual, presenting a clear picture of each transaction with larger, easy-to-read customer displays and seeking to speed up the

checkout process.

Indeed, time-pressed shoppers who navigate the store with great alacrity have little patience for delays once they arrive at the front end. In a recent nationwide survey of 1,000 consumers, 27.3% cited speedier checklanes as an important improvement they think technology could deliver.

Even more telling, the survey sponsored by SN and conducted by America's Research Group, Charleston, S.C., found that 50.8% of consumers would like to see lower prices result from technology investments in the stores they shop.

Retailers are sensitized to shoppers' demands for lower prices, but they told SN that the emergence of wholesale clubs and supercenters makes it difficult to compete on a level playing field.

The golden opportunity for supermarkets, said Michael Julian, president and chief executive officer of Farm Fresh, Norfolk, Va., is to take advantage of one-to-one marketing -- "something supercenters haven't done."

By delivering product discounts electronically at the point of sale, and tailored to the individual based on purchasing history, retailers can compete on price and forge a relationship with their most profitable shoppers at the same time.

"The real danger of supercenters is they offer a shopping experience that, quite frankly, can be as good as any supermarket experience. The supercenter customer gives up very little to shop there and can get much lower prices than many supermarkets could ever hope to deliver," he said.

"Can we take a position supercenters don't currently occupy? Yes, I think we can take a position that meets consumer demand and needs so clearly that they won't even think about another option," he said.

Data-base marketing provides that edge, said Julian, who like many retailers is upgrading point-of-sale hardware and software not only to speed the checklane but also to enhance electronic marketing initiatives.

Similar moves are afoot at B&R Stores, an independent based in Lincoln, Neb. "Our focus has been on rewarding our best shoppers," said Roger Tracy, director of information systems.

The retailer is refining electronic marketing capabilities at the point of sale while upgrading electronic payments applications to speed transaction processing.

"It's a learning process for us, but as we get a little farther into it, we'd like to get more information on what shoppers are buying to use for target marketing, merchandising and responding a little better to the customer," he said.

B&R is integrating electronic payment applications with the point-of-sale to move the checklane faster, "and we're seeing some good processing time."

Another retailer that recently completed a front-end upgrade is Nature's Fresh Northwest, Portland, Ore., whose multimedia terminals display an informational "slide show" highlighting products according to nutritional characteristics, not brands. The system is linked to a nearby information booth where shoppers can obtain printouts of products by classification.

Robert Lockwood, information service director, said the technology enriches the shopping experience because it helps customers find exactly what they are looking for and offers suggestions on substitutions.

Lockwood was quick to point out that shoppers especially like the customer display. "They really appreciate having a larger screen with a lot more information about the transaction."

Shoppers are more information-hungry than they used to be, retailers told SN, and two new media gaining attention are interactive in-store kiosks and the Internet.

Even those retailers who don't believe shopping over the Internet has great potential told SN that offering store and product information electronically in the home can speed the checkout process in the store.

"If you could go on-line and understand how the store you shop is laid out, you could sit at your PC and do your shopping list. Think of what this opens up to you: You could then send out your firstborn to pick up those items for you," said a vice president at a major East Coast retailer.

In-store interactive kiosks might just be a more feasible alternative to provide a vast array of information right in the store.

Dan Bailey, senior vice president of retailing at Martin's Super Markets, South Bend, Ind., said kiosks can enhance promotions when integrated with the point-of-sale and also serve as a rich information resource to make shopping a more pleasant experience.

Another upscale chain on the West Coast is evaluating customer needs and sees potential in a developing technology that could lead to better merchandising practices.

"I think one of the most interesting emerging technologies to enhance the shopping experience is infrared technology that tracks shopper patterns throughout the store," said the chain's chief information officer.

"There's a system that charts [traffic] patterns and identifies 'hot' areas and 'cold' areas. You can put an end display out there, for example, and get a feel for how many people walked by and how many stopped and looked at it.

"That allows the merchandiser to know if they are tailoring their programs specifically to the needs of the customer: If there's a 'cold' area in the store, you obviously need to change the mix or lighting or do something to 'heat it up' and make it exciting from a customer point of view," he said.