NEWS & SOLUTIONS 1997-05-05 (3)

DEENA AMATO-McCOY

VERNON, Calif. -- On the verge of a chainwide launch of a point-of-sale system operating on a Windows NT platform, Smart & Final plans to use its open architecture to significantly improve one-to-one marketing efforts with its best business customers.

Smart & Final here will use its new POS system, as well as information collected through its recently launched customer-loyalty card, as a starting point to delve into relationship marketing initiatives for its best customers in more than 170 stores.

"Our No. 1 goal is that by collecting customer information through our new POS, our Smart Advantage card will allow us to provide more purchasing information to our shoppers rather than simply giving discounts at the checkout," said Bob Graham, director of store systems for Smart & Final.

He added, "Our marketing initiatives are dependent on our loyalty program -- that is the key."

Smart & Final's Smart Advantage program, a frequent-shopper program targeting its business customer base, was launched chainwide in March.

According to Graham, each time a customer's loyalty card is scanned, the retailer learns more about its business customers based on their purchases.

Graham plans to combine the Windows NT platform with the loyalty program in order to offer its shoppers purchasing information through the use of multimedia kiosks. He declined to specify when these would be deployed in the stores.

"There are many customer-focused marketing options we can pursue by using kiosks and multimedia presentations at those devices," said Graham. "Most importantly, we intend to keep collecting our consumer data to sharpen our target marketing initiatives."

Customer information will be fed into kiosks through a link connecting them to both a customer database and the POS system, according to a source familiar with the situation. An in-store processor makes it possible for consumer data collected at POS to be accessed at a multimedia kiosk.

For example, a customer who purchases large quantities of dog food each week could be targeted for special savings upon accessing the kiosk.

"There are a myriad of things that we can do to benefit the customer, and we need to research those possibilities," he said.

"We obviously want to use the kiosk to greet the customer and somehow alert the manager that one of our best customers is in the store," Graham explained. "Programs accessed at the kiosks can create personalized shopping lists based on a customer's purchase history, and even make special orders for specific products we may not have in stock."

Whether the retailer chooses to use the kiosk to offer customers coupons or print customer-specific shopping lists, Smart & Final feels that it can easily make this marketing tool a reality for its business customers.

According to Graham, the choice of this computing platform is the first step to making the kiosks -- and other marketing initiatives -- a reality.

"The beauty of being on an open NT platform is that it is no longer questionable whether you can pursue using a tool like [a kiosk], " he said. "This platform will make it easy to introduce these types of applications, rather than another platform that would have trapped us and prevented these projects from happening."

Besides offering kiosks with information geared to specific customers, Smart & Final is exploring the option of self checkout.

"We looked at NCR's demonstration of advanced checkout running on a self-serve system, which is really a combination of a POS terminal and an automatic teller machine," he explained.

While Graham feels that self checkout is a hot area that is getting attention industrywide, it is not yet a priority for Smart & Final.

"We still need to investigate how the concept of self-checkout will fit into our stores," he said. "Since it is still early, we have only looked at two versions of self-checkout so far. But again, we feel very positive that the NT platform gives us the flexibility to move into these areas."

One area of checkout that the retailer is gearing up for with vigor is its chainwide launch of its new POS system, the NCR 7450 FS32 Intel Pentium-based terminal running on NCR Advanced Checkout Solution, provided by NCR, Dayton, Ohio.

"We are beta-testing the system -- since we are the guinea pigs so to speak, the first retailer to use this system," he said.

The system is slated to be installed in Smart & Final's new Hollywood, Calif., store this month.

"We are rolling out the system in 20 stores this year and within three years' time it will be installed in all of our new stores as well as in over 170 existing stores," he said.

According to Graham, the PC-based POS supports an intuitive keyboard called DynaKey, also from NCR, that will improve associate and customer interaction.

"The keyboard is a combination of a cathode-ray tube and a traditional checkout keyboard," explained Graham.

He added, "The keyboard, similar to an automatic teller machine, is a graphical environment that guides associates through transactions."

Smart & Final is integrating its Smart Advantage loyal-customer program into its front-end system in order to use the checkout lane to communicate with its best customers.

"Once the customer loyalty card is scanned at POS, we collect all the data we need to learn about our customers and target special promotions to them based on their purchase history," Graham said.

The POS is equipped with a PC monitor, called a customer information display, that the retailer uses to interact with customers during their transaction.

"This is the place where we can welcome them into the store, advertise those customer-specific promotions, even post their receipt electronically," he said.

The key to its new POS system is that Smart & Final will form better customer relationships.

"Through Dynakey and CID we are communicating with our customers on a new level based on the information that we can utilize at checkout," said Graham. "More customer information provided to both consumers and associates at POS makes the checkout process a more personal experience."

Separate from its projects using its Windows NT-based architecture, Graham cited computer-assisted ordering as the next important step in the company's future.

"We are investigating computer-assisted ordering now and we are looking for solutions on how to store our collected data and streamline our ordering," he said. "The beauty of implementing continuous replenishment and similar programs is we can enjoy the freedom of not writing orders while making more efficient use of our inventory."

So far, Smart & Final has taken the first step to automate its ordering process, by implementing wireless technology to generate store orders by scanning reorder tags in store aisles and communicating orders to the in-store processor.

Though he declined to comment on specific numbers, Graham said the system is decreasing the time needed to generate an order.

"We have been using the interactive-ordering technology for nine months, and besides being a substantially faster system to create store orders, we are seeing that our orders are more precise as well," he explained.

Looking ahead, Smart & Final sees continuous replenishment as an important project to pursue. "It really is an intricate part of data warehousing and clearly it can give us more opportunities to serve our customers better," he said.