METRO AG DEBUTS HIGH-TECH FUTURE STORE

Michael Garry

RHEINBERG, Germany -- Metro Group, Germany's largest retailer, last week opened a "Future Store" here where it is testing a range of retail technologies, including many based on radio frequency identification (RFID).

The Future Store, an Extra supermarket, will feature such systems as smart shelves, intelligent scales, electronic shelf labels, kiosks, personal shopping assistants, anti-theft portals, portable self-scanning and self-checkout lanes. While some of these applications are being used elsewhere, Metro said that this is the first time they have been brought together under one roof. They represent technologies "that will considerably shape retailing in the next five to 10 years," the company noted.

Metro stressed that shoppers are free to use either the new technologies or conventional systems.

The grand opening of the 33,000-square-foot Future Store on April 28 was held with much fanfare and attended by officials from German government and industry. Supermodel Claudia Schiffer, a native of here, was dubbed the "first customer."

Metro, based in Dusseldorf, Germany, is calling the store the "first project within the Metro Group Future Store Initiative," which aims to develop retail technology standards that can be implemented globally. Metro's partners in the initiative include Intel and SAP, along with a host of other IT and CPG companies, including IBM, NCR, Wincor Nixdorf, Hewlett Packard, Cisco, Mettler Toledo, Symbol technologies, Oracle, Chep, Procter & Gamble, Kraft Foods, Gillette and Coca-Cola.

Metro has high hopes for the project. "Customer satisfaction will rise because goods will be more readily available, service is becoming more individualized and shopping more convenient," said Zygmunt Mierdorf, member of the management board of Metro Group. "This will boost our sales and lower our costs."

At the same time, the company is waiting for consumer feedback before committing to any particular technology. "The acceptance by our customers will be the yardstick for our decision as to whether, how and to what extent new technologies are to be introduced to retailing," said Dr. Hans-Joachim Korber, chairman and chief executive officer, Metro AG, in a presentation at the grand opening.

Alain Benichou, vice president of IBM's distribution sector in Europe, Middle East and Africa for IBM, who attended the grand opening and saw all of the systems demonstrated, said "everything worked perfectly well." IBM was responsible for integrating the store's systems.

The RFID applications in the store represent one of the most ambitious tests of technology developed by the Auto-ID Center at MIT, Cambridge, Mass. Auto-ID technology uses what is known as the EPC (electronic product code), a 96-bit chip that serves as a robust identifier of an individual item, case or pallet (see story, above). "I view the Metro Future Store Initiative as one of the most significant [RFID] announcements to date," said Peter Abell, research director, retail, for AMR Research, Boston. "Both SAP and Intel have had to develop new products to deal with the massive data volumes at the store."

Albrecht von Truchsess, spokesman for Metro, told SN that the initial products that will be tagged with EPC chips include Kraft Philadelphia cream cheese, P&G Pantene shampoo, Gillette Mach 3 razor blades, compact discs and DVDs.

Anti-theft portals tied to the tags are set up at exits, and checkout lanes are equipped with RFID readers in addition to bar-code scanners.

In the smart-shelf application, RFID tag readers recognize when tagged products are removed from the shelf, and can alert store staff via PDAs that a shelf is nearly sold out and needs to be replenished, thereby preventing out-of-stocks, explained Benichou. In addition, the store's distribution center is similarly alerted, he said.

Overall the tags will be used to track products throughout the supply chain, from the warehouse to the shelf, said Metro.

IBM is working on business case studies aimed at verifying that the store's systems will "drive down inventory costs by a minimum of 20%," according to Benichou.

In addition to RFID-based systems, other technologies at the store include an IBM-developed intelligent scale that uses a camera to recognize, weigh and issue a bar-coded ticket for a produce item that can be used to facilitate checkout.

Another notable device is a personal shopping assistant similar to one being tested by Stop & Shop, Quincy, Mass. It consists of a screen attached to a shopping cart that helps shoppers locate products and can download a customer's personal shopping list that from the Internet. The screen can also be used to display a video about a product as it is taken off the shelf.

In addition, the personal shopping assistant is equipped with a bar-code scanner that shoppers can use to scan products in order to facilitate checkout. At the checkout, the personal shopping assistant transfers the amount of the shopping trip to the POS system, which prints out a receipt for the amount owed. Shoppers never need to take their purchases out of their shopping cart.

The store also features stationary self-checkout machines that are widely used in the United States.

The kiosk application is able to display a video about a product as it is removed from the shelf, noted Benichou, who said that it could describe how best to use wine in a meal.