THE CONNECTED CUSTOMER

DAN ALAIMO

In the near-term future, retailers will touch their customers in the stores with developing technologies such as wireless communications and kiosks.

Some of the executives participating in SN's Technology Roundtable said they have already started to use these systems. For example, Ken Pink, vice president, information systems, Harmons, West Valley City, Utah, is putting wireless point-of-sale in new stores for on-the-spot checkouts. "Wireless is absolutely going to revolutionize the way we sell groceries in terms of where we put POS in the store," he said.

Andronico's Market, Albany, Calif., plans to eventually roll out a kiosk currently under test at a store to help promote new product introductions. "It has got to provide some tangible value over and above what you get on the Web," said Mike Miller, director of information systems. Retailers said they envision multiple uses for kiosks -- everything from customer information to giving employees access to companywide intranets.

Other roundtable panelists were: Gary Butler, vice president of information technology, Brookshire Grocery Co., Tyler, Texas, and Gary Herman, chief information officer, Unified Western Grocers, Los Angeles.

Here's how they view the development of in-store technologies.

SN: How do you see wireless technologies changing supermarket operations?

PINK: Wireless is absolutely going to revolutionize the way sell groceries in terms of where we put POS in the store. Historically, Harmons has moved checkstands around and put registers in perimeter departments -- we like to put the checkout devices where the customers want them. Wireless can really help us there, and it is mobile.

We plan to use it as a line-busting opportunity. Here's a long line, a department manager or a checker is given a hand-held device, and asks if a person is paying with a credit card, and if so, they take care of them right away. Another use is to be able to do some checkout for the products that we sell outside. It lets us be much more mobile about where we put POS devices, which gives us more flexibility for the customer.

In addition, in a new store we are building, we are deploying our intranet applications on the Symbol 1740s, so our scan coordinators and department managers will be able to do item inquiries and lookups and e-mails right on their wireless network into the intranet in the store.

The basic premise makes a lot of sense. We are in the grocery business and we don't want you at your desk using your computer. If we can move you as a department manager out into a store environment where you can help customers, then we are better off. And that is what we see wireless doing: helping us move our high-caliber people into a place where they can help the customers more. We think wireless is a big player and it's helped that the price has dropped through the floor.

MILLER: I am looking forward to a faster bandwidth with wireless, because at this point, we are limited to perimeter departments. I really think there is potential for the front end if they can get the throughput issue taken care of. We use it in the deli department, the floral department; when crabs are in season we take it back to the seafood department. But it's really only fast enough for the terminals in the perimeter departments.

HERMAN: This continues to be a very exciting area for supermarkets. Our industry has successfully used wireless technologies for back-room applications for many years. Now wireless technologies are being used for scale maintenance communication and wireless phones. With the popularity of the Palm devices and the wide-area-network wireless services, I see store management being able to access e-mail or their internal systems anywhere in the store, or outside the store.

BUTLER: There will be continued improvements in wireless technologies and you will see more and more of that in supermarket operations. It will be used in-store for pricing purposes, audit purposes and receiving purposes, as well as for some specialty departments such as customer service. Wireless technology for consumers will play a role in the future also. Product information for comparison shopping is one of the things people could do with it.

SN: What technologies hold the most promise for in-store marketing?

HERMAN: Kiosks will finally become more commonplace. The costs continue to drop and companies are becoming more creative in providing customer information and value through these kiosks. Customer loyalty holds the most promise -- being able to communicate customer-specific promotions. There also are specialized kiosks that have been used to help people shop, for example, in selecting wines, and also in providing nutritional information.

MILLER: We've had experience with kiosks in our Danville store, and I think we have, bar none, one of the best kiosk applications that are out there. We haven't rolled it out yet because we are not exactly sure what the return on investment is and what it should be.

Our approach with the kiosk is to offer a very exciting and unique shopping experience to our customers. And now our challenge is, how do we justify the ongoing expense, and then the roll-out expense, to make it worthwhile.

We have category manager teams that are starting to offer this as a marketing vehicle for product introductions, but we haven't had a model to use to guide us from another retailer. This is still a fairly new in-store vehicle, and the ultimate success of the use of kiosks is going to be the quality in which the objectives are set and the quality in which those objectives are realized. It has got to provide some tangible value over and above what you get on the Web.

PINK: We are doing some things with kiosks, mostly in the whole-health area. The customers seem to like it as an information source. Also, our internal intranet applications will be available on these kiosks for our associates. There will be a sign-in for security. We are trying to extend some our internal intranet applications to our customers anyway, and we think kiosks will help us do that.

We like the kiosk idea, although they are very expensive and they take up room. You have to manage that. But we see kiosks as offering us a lot of customer service opportunity.

For the new store we are building, we seriously considered electronic shelf labels. Our dilemma with it is, we think that if you are just using it to replace paper labels with LCDs [liquid crystal displays], you'll never get a payback. You have got to be willing to think of how your marketing and pricing people time their price changes. Right now, that is a little out of the scope of what we want to do and it is a little too expensive for us still.

BUTLER: We have looked at electronic shelf labels and so far they are just too expensive for us to implement. We are not going to be using that for in-store marketing. But kiosks? Maybe. There's a place for kiosks and we continue to look at them.