SMALL CHAIN KNOWLAN'S PILOTING SELF-CHECKOUT

MICHAEL GARRY

VADNAIS HEIGHTS, Minn. -- In a sign of its growing acceptance in the food industry, self-checkout technology, which has been largely implemented by midsized-to-large conventional chains, is finding interest among other types of operators.

Following the recent announcement by a club operator, BJ's Wholesale Club, Natick, Mass., that it was piloting the ACM 750 Model self-checkout system, from Productivity Solutions Inc., Jacksonville, Fla., a small grocery chain, Knowlan's Super Markets, based here, last month installed the same system in two of its four Festival Foods price-impact stores. Knowlan's also operates two conventional neighborhood markets under the Knowlan's banner.

"We've been looking at self-checkout systems for quite a while," said Edward Doud, director of retail technology for Knowlan's. He selected the PSI solution in part because its conveyor system accommodates not just smaller, express-lane orders but larger basket sizes as well, which should give rise to "more usage," he said. Though self-checkout is sometimes regarded as best-suited for express orders, "we had heard anecdotally that people want it for bigger orders, too," he said.

Knowlan's two test stores, where the self-checkout systems are installed in three retrofitted lanes (out of 11), have already been getting a lot of action, with self-checkout accounting for about 25% of all transactions during the first two weeks, said Doud, adding that orders have on average been slightly smaller than the typical checkout size. According to Doud, the managers of the test stores reported many customers saying the system was "really neat and really quick," and that after getting the hang of it in their initial walk-through, most left the self-checkout lane with "a big grin on their face."

Doud said he is hoping for "regular usage" of the system by individual shoppers, though that is hard to measure because the chain lacks a frequent shopper system. But if the percentages remain the same or increase he will take that to mean there has been repeat usage.

Even shoppers who don't use the self-checkout lanes appreciate the fact that their presence has diminished the length of lines at the regular lanes, added Doud.

Knowlan's plans to run the two-store pilot for at least 90 days and then consider adding the self-checkout systems to its other two Festival Foods stores, said Doud, who added that the chain is evaluating whether to test them in its two conventional stores. He also expects the system to be installed in a new Festival Foods store opening this fall.

Other retailers using PSI's systems include Winn-Dixie, Jacksonville, Fla.; and Food Lion, Salisbury, N.C. Other major self-checkout vendors include NCR, which supplies Shaw's, K-VA-T Food Stores and Kmart; and Optimal Robotics, whose customers include Kroger, A&P, Meijer, Ahold and Loblaw.

"Knowlan's implementation proves that self-checkout is not [just] a big-chain technology," said Bruce Failing, chief executive officer of PSI, in a statement.

Knowlan's is the first grocer to install the PSI system with an ICL ISS45 POS solution, marketed by Fujitsu. The ICL ISS45 POS is used by Knowlan's in its conventional lanes, making it easy to integrate the conventional and self-checkout lanes, noted Doud. "It's transparent on the back end that we have self-checkout."

Knowlan's ICL integrator, Retail Data Systems, recommended and installed the PSI system, he added. "It was important to us that Retail Data Systems be in the picture. We wouldn't have done it without them."

Doud said Knowlan's motivation for installing self-checkout was purely to enhance customer service rather than to reduce front-end labor costs. Only one store associate is needed to oversee the three self-checkout lanes, though Knowlan's is stationing baggers at the lanes as well.

"We don't look at it as a pot of gold in labor savings, though some labor savings will come naturally," he said, adding, "We're more interested in the intangibles of customer satisfaction."