DILL'S FOOD EXPANDS TEST OF NEW ESL PROTOTYPE

DENISE ZIMMERMAN

HOUSTON -- Dill's Food City, Royston, Ga., a five-store independent serving as the test bed for a new electronic shelf label prototype, recently expanded the system to cover about 50% of the products in the test store.

The wireless technology has been quietly tested by NCR, Atlanta, for more than a year in a 35,000-square-foot Dill's unit and was first introduced to the market last weekend at the MarkeTechnics conference here sponsored by the Food Marketing Institute, Washington.

Dill's, which told SN it increased shelf label coverage last month from 30% to nearly 50% of the store, is the first supermarket installation of NCR's ESL system. Other retailers, including Wal-Mart, Bentonville, Ark., and BJ's Wholesale Club, Natick, Mass., have also tested it.

The cost for the system has not been disclosed but industry observers told SN that NCR was aiming to achieve a $5 per tag price, which would put the cost for a 15,000-label system at about $75,000 per store.

In a statement, NCR noted that the labels would be produced by Tokyo's Citizen Watch, which specializes in miniaturization manufacturing and produces high-volume, low-cost products.

The prototype system installed at Dill's consists of labels in two sizes, one measuring 4 inches wide and the other 2.5 inches, "but I think they'll change the size and the format a little bit," said Anderson Dilworth, owner.

The shelf labels display both price per ounce and price per unit and receive that data transmitted from the point-of-sale to ensure consistency from the shelf edge to the scanner.

"We hang our hat on price accuracy and it's almost impossible to find a mistake in our store," he said. "Any time we say, 'This is the price' and we can prove it when you get to the front, we come out smelling like a rose."

Price integrity was not a problem prior to the system's installation, he noted. Indeed, an audit conducted beforehand revealed seven price discrepancies among 30,000 stockkeeping units.

"Even when we were using regular shelf tags we were way above the national average on accuracy," he added.

Achieving price accuracy alone is not sufficient if that fact is not widely recognized by shoppers, said Stan Dilworth, vice president of operations.

"One thing we need to do is better educate the customer on the accuracy issue, that there is a continuous loop in the pricing system that takes error out," he said. "The customers don't know that. They don't see that."

In addition, the younger Dilworth said price accuracy means profit because up to 70% of price errors are undercharges, favoring the customer, not the retailer.

"Price accuracy, we believe, makes you money as much as it keeps your customers happy," he added.

Stan Dilworth said the store has experimented with merchandising applications using the electronic tags. For example, a tag might alternately flash the regular price and the sale price for a particular item.

Testing will continue but Dill's has no immediate plans to bring the technology into additional stores.

The system was installed at no cost to Dill's, which also served as a test site for Unity, the operating system developed by the former AT&T Global Information Solutions, Dayton, Ohio, now known as NCR.

Anderson Dilworth told SN that keeping abreast of technology is a high priority at Dill's, which installed scanning in 1979, only five years after the country's first commercial installation at Marsh Supermarkets, Indianapolis.

"Customer response [to the new shelf labels] is pretty good because they know we are on the cutting edge of what goes on," he added.

NCR's commercial installation marks the long-awaited entry of new players in a market dominated by two electronic shelf label vendors, Electronic Retailing Systems International, Wilton, Conn., and Telepanel Systems, Markham, Ontario.

NCR's ESL development efforts date back to 1988. The current prototype was developed over one year's time.