COSTS, SECURITY CALLED BARS TO SELF-SCANNING

JAMES FALLON

MUNICH, Germany (FNS) -- Self-scanning trials are under way at a growing number of food retailers worldwide. But hurdles involving security and cost issues must still be solved before the technology gains widespread acceptance, according to speakers at a CIES conference here last month.

The conference, "The Critical Role of I.T. in Transforming Business Process," attracted about 130 attendees from 16 countries, about half of whom were food retailers. Speakers included vendors, consultants and retailers from the United States and Europe.

In the United States, self-scanning trials are already under way at several chains, including Price Chopper Supermarkets, Schenectady, N.Y., and Kroger Co., Cincinnati. European chains are also testing the innovative systems.

Erhard Buchholz, information technology director at Rewe Zentrale AG, Cologne, Germany, was bullish about the prospects for self-scanning and said the German chain has begun trials with the view that "it will become a reality. Self-scanning will progress even further because our customers are keener on technology than we realize."

While not revealing details of the trial, Buchholz said interest in the technology is growing because of increasing cost pressures and price competition. He also pointed to high staff turnover and poorly qualified staff as other reasons for working to make self-scanning succeed.

Rewe has not introduced movable, handheld self-scanning units, but is working with static scanners equipped with two conveyors that can be adapted so that both handle self-scanning, or one has self-scanning and the other a cashier.

Buchholz contends that for self-scanning to work, it should be

restricted to food or food-related items, all products must be bar-coded and bar codes must be positioned uniformly on products, there must be a clear structuring of store operations and each store must have a proven checkout concept.

In addition, retailers must devote reasonable space to the new self-scanning layouts; increase security, "which is the weakest link in the chain," and be flexible in personnel placement to cope with the slower checkout times.

Those limitations are among the reasons that Migros Bern, the 90-store cooperative headquartered in Bern, Switzerland, has decided not to continue with its self-scanning trial.

Urs Furrer, the company's director of information systems, said Migros introduced its first checkout with scanning in August 1992, but its rollout throughout the chain has met resistance from management, which was skeptical of its cost-efficiency ratio. So Migros launched two self-scanning trials in an attempt to improve this ratio, with systems designed by Trinics AB of Goeteborg, Switzerland, and ADS Anker of Bielefeld, Switzerland. The two systems were tested in stores from October 1993 to October 1994.

The Trinics system attempts to solve the security question by weighing each item on the conveyor belt to compare it with the weight stored in the store's central computer. If the weight is identical, the product moves down the conveyor and is scanned automatically. If it isn't, the product goes to the cashier sitting at the checkout, who deals with it, Furrer said.

Under the ADS system, the customer puts all the products on the conveyor and the cashier sits between two self-scanners and is available for troubleshooting. The ADS system has no internal security precautions.

While 64% of customers thought self-scanning was a good idea, Migros' experience resulted in only a mixed success, Furrer said. First, the company concluded it is vital to have some security system with self-scanning in larger stores, while smaller stores of up to six checkouts don't need such a system. Second, the scanning rate with a cashier is about 550 items an hour during weekends, but to match this requires a double self-scanner per each traditional scanner.

Another problem is the hardware costs, which at $6,611 (8,000 Swiss francs) for each self-scanner are about 15% to 20% higher than for a conventional scanner, Furrer said.