PATHMARK TARGETS PRODUCTS AT CARTS' BASE

Michael Garry

CARTERET, N.J. -- Pathmark Stores here is launching a three-store test this week of an anti-theft system that visually reads the identity of items at the bottom of shopping carts at the checkout and transmits the information to the point-of-sale register.

The year-old LaneHawk system, from Evolution Robotics, Pasadena, Calif., is designed to prevent shoppers from accidentally or deliberately walking out of the store without paying for items stored at the bottom of the basket such as a 12-pack of paper towels, a large box of laundry detergent, or as Pathmark has found, a 2-pound bag of shrimp. The same technology is used in robotics and military applications.

"A handful of customers like to play 'catch me if you can,"' said Bob Oberosler, senior vice president of loss prevention, Pathmark. "They'll hide items, stand in front of items and try to position the cart a certain way. It's a cat-and-mouse game."

Oberosler said the appeal of the system is its potential to not only reduce losses but enhance customer service and cashier productivity by eliminating the need to transfer items from the bottom of the cart to the checkout counter for scanning.

"This is the first system I've seen in 30 years that offers a solution" to bottom-of-basket (BOB) loss, Oberosler said. Pathmark, he added, has tried other systems that use mirrors, cameras or infrared technology, but those demanded too much of cashiers and "none turned out to be a long-term, viable solution." Pathmark still uses mirrors at 90% of its registers.

Pathmark, which operates 142 stores, is testing the LaneHawk system in a New York City store, one near Philadelphia and a third in central New Jersey, Oberosler said. In each store, the system is installed in five checkout lanes -- a mix of conventional full-service, express and "tribelt," which uses a separate belt for bagging by shoppers.

Giant Eagle, Pittsburgh, began testing LaneHawk at three Pittsburgh-area stores in the first quarter, said Brian Frey, a spokesman at the chain. Two other food retailers are also running three-store tests of LaneHawk, said Alec Hudnut, chief executive officer, Evolution Robotics.

The system uses a camera that is flush-mounted in the checkout counter, a few inches from floor-level. Using visual pattern recognition technology, the camera detects and recognizes a product on the bottom of a cart by comparing its image to stored digital images of likely BOB products. Pathmark has captured images of about 400 products for its test.

Once an item is identified, its UPC information is sent through an Ethernet connection to the POS register. On completing the transaction, the cashier verifies the quantity of items under the basket. The BOB items do not need to be moved or scanned. BOB information is transferred wirelessly to a main PC elsewhere in the store, where item images are stored and updated.

Two-Phase Test

Pathmark is running its test in two phases. The first, which begins this week and runs for four to six weeks, will use the system to "passively" capture images of items under a cart as well as the time, data, lane and cashier for a transaction, without being connected to the POS register.

The chain will then compare that information against POS receipts to determine how many BOB items left the store without being paid for in the transactions.

The second phase, also running four to six weeks, will connect the LaneHawk system to IBM POS registers, thereby capturing the BOB items in the transaction, and compare the transaction totals to the initial test period. Oberosler said he expects the return on investment of the system to be determined from the test.

Hudnut, who declined to give the cost of the system, said its ROI occurs between 12 and 18 months. Hudnut noted that the data generated by the system can be used to target cashiers who are involved in "sweethearting" activity.

Another vendor of technology that targets BOB theft is VerifEye Technologies, Markham, Ontario. VeriEye's system employs a camera in the checkout counter that captures what's at the bottom of the cart and displays the image on a screen visible to the cashier.

Thomas D. Murphy, president of Peak Tech Consulting, Colorado Springs, Colo., who is familiar with LaneHawk, commented that in his experience "nothing like this has been tried, nothing has been as easy to use, and nothing has been as effective or as well integrated with the POS."