KMART ADDS SELF-CHECK, WIRELESS SCANNERS

DAN ALAIMO

TROY, Mich. -- Kmart officials here said they are aggressively rolling out advanced checkout technologies.

The chain plans to add stationary self-checkouts from NCR Corp., Dayton, Ohio, to 600 stores by the end of the year, adding about 2,400 units to the 300 already in place in 75 stores.

The self-checkouts are going into both supercenters and traditional Kmart stores, now known as Big K, said spokeswoman Susan Dennis.

Kmart Corp. also recently completed the installation of handheld scanners from Symbol Technologies, Holtsville, N.Y., in all 2,100 of its stores.

The handheld units were originally purchased for inventory purposes, Dennis said.

However, the retailer recently instituted a program called "Blue Lightning" where employees can use the handheld units to scan and bag customers' orders while they are waiting in line.

Once the orders are scanned, customers get a smart card, which the cashier scans and processes for payment.

"It speeds the process up," Dennis said. "If the store associates see the lines piling up, they try to do what they can to make the lines move more quickly."

In another application of the handheld scanners, Kmart has begun a "Blue Dot" program designed to improve in-stock positions.

When an item is missing from the shelf, employees use the units to scan shelf labels, and the scanner will tell them if the product is in stock in a back room, on order, or it needs to be ordered.

Products are restocked daily and replenishment reports are available for each department and category in each store, thus improving the flow of goods.

"Customer service is about more than just checking people out, but also making sure that products are in stock," Dennis said.

"It is part of all the things that customers look for in their daily shopping experience. So, customer service encompasses the whole picture and the technology is enabling Kmart to meet their needs and their wants."

Kmart is also initiating a voice response system for pharmacy.

This system will enable customers and doctors to call outside of usual business hours, enabling prescription refills over the Internet.

The company is also introducing Internet services for photo processing that include on-line photo viewing and the ability to upload digital images.

"Every system or application we design provides a unique insight into our business and improves the way we make decisions," said Randy Allen, Kmart's executive vice president, chief planning and information officer.

"Each piece is an integral part of being a culture that centers around our customers," he added.

The Kmart rollout of the NCR stationary self-checkouts is one of the most aggressive in retailing.

Earlier this year, Kroger Co., Cincinnati, said it will have 900 stores installed with self-checkout units from Optimal Robotics, Montreal.

Using a typical configuration found in the supermarket industry, Kmart clusters four self-checkout units together near a dedicated customer-service desk.

Dennis said more of the installations are going into Super Kmarts because of major grocery presence in those stores.

"It is certainly part of best practices within the industry. However, we are not limiting it to the Super Kmart format because it certainly applies to a broad assortment of merchandise in the store," she said.

The retailer will consider extending the self-checkout program to more stores after the current wave of installations is complete, she said.

The self-checkouts have allowed Kmart stores to make better use of their labor.

"They free up our associates to do some other things within the store. It allows us to be more flexible, depending on what the traffic pattern is. They could be stocking merchandise, they could be checking inventory, they could be helping customers," she said.

"Our commitment has been no more than three in a line. Certainly this technology will help us execute better in terms of keeping that commitment. The mobile scanning devices also will help us make sure that we keep that commitment to our customers," Dennis said.

Customer acceptance of self-checkout is exceeding expectations.

At one store in Rochester Hills, Mich., almost 40% of total sales are being processed through the self-checkouts, said Nick Nordstrand, store manager. "The self-service checkouts are great for quick purchases and customers can see the prices as they scan their merchandise. Payment is quick as they accept cash, ATM cards and credit cards," he said.

"At Kmart, the customer is our top priority at all times," said Allen. "Enhancing customer service is critical to increasing our market-share.

"Keeping checkout lines down to three customers or less, speeding up the checkout process, and ensuring that we have the products and services our customers want, drives the technology side of our business at Kmart."