FRONT-END CENTER

DEENA AMATO-McCOY

Retailers and wholesalers leading the pack in front-end innovations are leaving traditional point-of-sale units behind.

Instead, they are rolling out solutions that hone in on the functionality needed to process orders quickly, efficiently move customers through the front end, and incorporate applications ranging from electronic payment systems to customer loyalty.

Save Mart Supermarkets, Balls Food Stores and URM Stores are three companies using a variety of cutting-edge technologies to achieve such goals.

Save Mart Plans Open Architecture

for PC-Based POS System

MODESTO, Calif. -- The rollout of a PC-based point-of-sale system is already providing front-end productivity increases for Save Mart Supermarkets here, and the retailer expects long-term benefits from the ability to integrate additional applications directly into the POS.

An open-systems architecture is a prerequisite for Save Mart's move to the PC-based POS units, which are expected to be live on an open platform in January 1999, according to Steven Gaines, operations project manager for Save Mart.

"An open system is the only option," said Gaines. "If you do not make the transition, you will become locked into today's technology."

The retailer expects a return on investment in less than three years, he added. The retailer's conversion to an open system will allow Save Mart to roll out a common computing network chainwide.

"We had up to 12 variations of front-end systems, all with different training requirements and infrastructures," said Gaines. The retailer operates both traditional supermarket and warehouse stores.

Save Mart began laying the preliminary groundwork four months ago, and is installing a Unix-based front-end system from Stores Automated Systems, Bristol, Pa. The retailer plans to upgrade this system to the vendor's Windows-NT product in January 1999, "to achieve the true open platform," Gaines said.

The move to an open system will also give Save Mart the versatility to add applications in the future. Though there are no solid plans, Gaines said the retailer will explore the benefits of integrating loyalty-marketing and category management applications into the POS.

Since the rollout began, Save Mart has been able to increase its cashier productivity. "We have converted to a customer unload of orders rather than the typical cashier unload, eliminating the need for cashiers to bend and pick up thousands of items per shift," Gaines said.

"This transition, along with the fluidity of transactions at the front end, has helped us achieve a 50% increase in cashier productivity in six weeks," he noted.

Balls' Self-Checkout Technology

Improves Customer Service

KANSAS CITY, Kan. -- Though Balls Food Stores here is using stationary self-checkout technology in only one store, customers are paying attention and self-scanned transactions are on the rise. Balls plans to give the units even more prominence, noting that self-checkout could be one solution to labor issues common in the supermarket industry.

Since the units were installed in March, Balls has seen more than 7% of transactions processed through them. In order to further improve their visibility and usage, Balls will be moving the self-checkout technology into the spotlight and center of Balls' Hen House store in Lenexa, Kan.

"This will expose [the units] to more customer flow and traffic patterns," said Barb Ramsour, director of information systems for the chain. "When we had them at the end, they were off by themselves. However, now they will be in the center, next to traditional lanes with associates on either side able to oversee their performance better."

The two units, which replaced one traditional checkout lane, are point-of-sale clients that run on the same infrastructure as Balls' traditional POS units.

"The main difference between this system and others is that it only has one file to maintain," said Ramsour. "Other systems have different applications necessary for use of scales, file maintenance, payment generation and coupon acceptance. This system lets us run it simply as an additional lane with an ATM-type machine attached."

In addition to helping Balls improve its customer service and efficiently move customers through the front end, the units, from NCR, Dayton, Ohio, also address a persistent labor issue.

"The units are established as express lanes for orders of 15 items or less, which makes it a good tool to get time-starved customers out of the store quickly," Ramsour explained. "We also see them addressing the problem of needing labor to man a checkout lane.

"We are fighting the same issues as our competitors; we are all faced with the challenge of keeping good labor," she added. "By giving customers access to these lanes, labor does not affect our customers, and we can still provide a good experience at checkout."

It is incredible how many different types of customers are interested in the units," Ramsour added. "There is no difference in the socio-economic [levels of] customers using the technology -- we are seeing young and old customers processing orders through the lanes. There are no boundaries."

Though pleased with its experiences with the technology, Balls is still evaluating the system, and declined to comment on future expansion.

URM to Use WAN for EPS Integration

SPOKANE, Wash. -- As the move to electronic benefits transfer gains momentum, URM Stores will improve efficiency at its retailers' front ends with the upcoming installation of a wide area network to enhance the integration of electronic payment systems.

The WAN, scheduled to be live by the first quarter of 1999, is expected to lower processing costs associated with EPS. "We are converting a variety of stores from a direct dial-up infrastructure to a quicker connection that will provide faster response rates and reliability for our transactions," said Rick Anderson, director of retail systems for URM, a wholesaler based here.

URM services approximately 80 stores with EPS with either an integrated or stand-alone solution. The wholesaler plans to bring about 50 stores on-line through the WAN, said Anderson.

Another factor motivating URM's launch of a WAN for EPS is the growth of electronic benefits transfer. "EBT has certainly spiked the number of transactions that many of our stores are processing," Anderson explained. "Some stores have reported between 10% and 50% increases.

"As additional states roll out EBT, we expect to see similar transaction rates in our other stores," he added.

Transaction volume is what determines which stores use EPS, according to Anderson. "URM cannot show a return on investment if some stores process just a few transactions," he said. "We are trying to provide the most cost-effective solutions for both high- and low-volume situations."