SAFEWAY UK TESTS HOME SHOPPING VIA HANDHELD UNIT

COLE CORBIN

HAYES, England -- In an effort to expand its telephone- and fax-based home-shopping business, Safeway here has launched a one-store home-shopping test that allows customers to submit grocery orders from their homes via a personal handheld unit and a direct modem connection.

If the test is a success, Safeway may roll out the program to other stores in England later this year, according to Jeremy Wyman, business solutions manager at Safeway.

On Feb. 1, approximately 200 members of Safeway's frequent-shopper program were to receive the handheld units needed to participate in the "Easi-Order" pilot program at Safeway's Basingstoke, England, store. The personal ordering device is a palm-sized electronic organizer, supplied by Symbol Technologies, Holtsville, N.Y.

In addition, Safeway and IBM's Thomas J. Watson Research Center, Hawthorne, N.Y., have been collaborating on the project for more than two years, according to a source familiar with the situation.

Safeway selected their best shoppers from a list of customers who signed up for the home-shopping test. "We had a lot of customers [at the Basingstoke location] asking about this," Wyman said. "We want to put our big-spending customers first."

Each customer's purchase history and demographic profile is programmed into an individual unit, thus forming a list of products that customer purchases regularly.

"By using data mining, we also create an additional electronic list of products they do not usually buy, but ones they might be interested in," said Wyman. "The idea is to get people to browse, see a new product and say, 'I'll have a go at that."'

The "Easi-Order" handheld unit connects via a modem to Safeway's central server in Hayes. The Basingstoke store downloads the order from the service center and fulfills it. Customers visit the store to pick up and pay for orders at the store's front end.

Wyman said he expects the program to last between two and three months. "[The length of the trial] depends on the frequency of orders," he said. "We'll take as long as we need until we get enough orders to determine how well it's going."

One of the lingering questions, according to Wyman, is the frequency with which the handhelds will be used.

"We haven't got a clue as to what the order cycle is going to be. We think it might be a bit quicker, since the device is meant to be in the kitchen."

Safeway has not yet determined whether it will charge customers to use the units if the program continues beyond the test stage.

"In the trial, we'll give them out free," Wyman said. "It is an interesting debate in cost. We haven't decided on what we'll charge [the customers] for the device in due course."

Safeway also plans to offer weekly promotions to the customer via the handheld device. Updates will occur automatically when the customer connects the "Easi-Order" device to the server center. Wyman declined to specify when the retailer would launch the promotions.

Feeling the pressure from competing on-line home-shopping and delivery services, Wyman said Safeway launched its handheld home-shopping pilot to find a more appealing method of home shopping.

"Women still do most of the shopping here," he said. "Though they often come from homes that have access to the Internet, we've found that they are not usually the primary users of the Internet in their homes."