Future Shock

MICHAEL GARRY

When Metro Group opened its first Future Store at an Extra supermarket in Rheinberg, Germany, in late April 2003, the store may have gained as much notice for the appearance of supermodel and Rheinberg native Claudia Schiffer at the grand opening as for its collection of advanced retail technologies.

But the store gradually became known as a kind of mecca for in-store technology, attracting more than 31,000 visitors from 63 countries who wanted to see deployments of such systems as RFID-based smart shelves, intelligent produce scales, personal shopping assistants, a variety of kiosks, electronic shelf labels and anti-theft portals. It was said to be the largest collection of in-store technologies ever assembled under one roof.

Metro Group, Germany's largest retailer, with headquarters in Dusseldorf, used the Rheinberg Future Store as a real-world test site for retail and supply chain technologies until last year; the store now operates as a conventional supermarket.

“Numerous innovations tested under real-life conditions in the Future Store in Rheinberg have been introduced in selected stores [within] Metro Group,” said Antonia Voerste, head of corporate communications, Metro Group Future Store Initiative. Examples include an intelligent scale that automatically recognizes produce items, self-checkout systems and RFID applications used to track products.

In late May, Metro Group moved the Future Store concept — with a whole new array of cutting-edge technologies — to one of its 434 Real hypermarkets in Toenisvorst, Germany. Once again, the store is positioned as an “innovation testing ground” for the company.

“The concepts and technologies that prove successful here in Toenisvorst will be introduced successively at stores belonging to our sales brands,” said Eckhard Cordes, chairman of the management board of Metro Group, in a statement. “Consequently, the Real Future Store is strategically important for the future development of the entire group.”

The mostly service-oriented technologies being piloted at the Toenisvorst store include a portable shopper scanning system, RFID-based meat cases, interactive skin care terminals, an automatic wine tasting system, biometric payment and mobile robots that explain the technologies in the store to shoppers. The store is also testing new merchandising concepts in the meat, fresh fish and cheese departments. Free 90-minute guided tours can be initiated at a visitors' center adjacent to the store.

As with the Rheinberg store, Metro Group has equipped the Future Store in Toenisvorst via a host of partnerships, including more than 85 companies from the IT, consumer goods and service sectors, as well as “representatives from the world of science,” said Voerste. Major partners include SAP, Intel, IBM, T-Systems and Cisco, plus a consortium comprising Fujitsu Services, Fujitsu Siemens Computers and Siemens. “All companies involved share a common vision: driving forward the modernization process in the retail sector,” she said.

Overall, Metro Group said it expects the new Future Store to make “a fundamental contribution to the [Real hypermarket's] strategic realignment,” as part of “an extensive turnaround program.”

While Metro Group continues to invest in a single-store test bed for retail technology, that approach has found few adopters among U.S. retailers. “U.S. grocers tend to spread technology tests out over a number of stores, usually limiting each site to one new technology,” observed Thomas Murphy, president, Peak Tech Consulting, Colorado Springs. “They do this to minimize impact to a test store, resulting in less customer and management disruption.”

In addition, said Murphy, “U.S. grocers don't make many decisions on anything other than hard cost and hard benefit results, so they try to isolate technology so they can easily measure impact.”

CELLULAR SCANNING

Metro Group considers one of the most important innovations at the Real Future Store to be what it calls the Mobile Shopping Assistant (MSA), a software application that turns a customer's cell phone into a scanning and information device.

Using their phone's auto-focus camera, consumers can scan products as they shop, keeping a running total of their purchases and paying at a special lane to complete the checkout process. To date, cell phones that have been enabled by the MSA software to scan products at the store include Nokia models N73 and N82 and Sony Ericsson models P1i and W960i.

Tapping the Internet, customers can also use their phones to find specific products in the store or to call up product information. The phones can also create shopping lists. The MSA software was developed in collaboration with Deutsche Telekom.

“Almost every consumer these days owns a mobile phone and uses it as a matter of course,” said Cordes. “Today's high-performance mobile phones are ideally suited for mobile shopping.”

Zygmunt Mierdorf, member of the management board of Metro Group, singled out the MSA application as one he would like to see rolled out at other Metro stores.

The MSA is similar to handheld devices used at U.S. food retailers such as Stop & Shop and Food Lion's Bloom stores; the difference is that those devices are provided to shoppers by the retailers, whereas the MSA system leverages a shopper's own cell phone. Drew Crowell, a spokesman for Sony Ericsson, said that the company's cell phones with scanning capability are not yet being tested in the U.S. Cell phones are, however, being groomed for other applications in U.S. supermarkets (see story, Page 28).

Greg Buzek, president of IHL Group, Franklin, Tenn., pointed out that before a cell phone system such as the MSA could be adopted in the U.S., retailers would need to secure the phone's interface to a store's network. “The focus has been on making these systems hackproof,” he said. “So enabling consumer technologies to touch that network, pull data and then send data seems a stretch for a while in the U.S.”

Smart Freezer

Another key application at the Future Store features RFID technology in the meat department. Foam meatpacking trays in the in-house butchery are fitted with RFID tags that contain a unique EPC (electronic product code); the packages are displayed in a “smart freezer,” which monitors stock levels and expiration dates. The tags were designed and provided by Avery Dennison RFID, Flowery Branch, Ga.

Every time a customer removes a product, it is automatically registered by RFID readers. “This makes it possible to plan the in-house production of fresh meat products extremely precisely, and significantly contributes toward the ongoing optimization of quality assurance processes,” said Voerste.

The demand-driven process helps maintain stock levels while minimizing waste, Metro Group said. At the same time, products nearing their expiration date (which is stored in the EPC) trigger an alert so that they can be removed from the case. Nicole King, a spokeswoman for Avery Dennison RFID, said the company is not aware of any similar meat-case pilot taking place in the U.S.

Buzek believes this type of RFID application “is pretty much a no-brainer if the tag costs can be absorbed in the margins.” In addition, he said, it would need to be tied to a fresh-item management system “to be cost-effective.”

The Real Future Store is testing a range of systems that provide customers with helpful information. In the newly designed “beauty & more” department, various terminals provide customers with beauty tips. At the interactive skin care information terminal, for example, customers can determine what skin type they have and call up corresponding beauty care advice. In the store's wine department, a wine tasting counter offers 16 chilled wines that can be dispensed into testing cups at the push of a button.

Technology is also being used as a merchandising tool. The seafood department, for example, features ambient sound resembling ocean waves, while ambient scenting contributes a light aroma of herbs of Provence with a touch of lime. The department's “interactive floor” displays images of fish that “react” to the movement of passing shoppers.

The Future Store is testing a technology that flopped in the U.S. — biometric finger-scan payment. Customers place a finger onto a fingerprint scanner to pay for purchases without the need for a signature or PIN. Modern encryption algorithms make this an extremely secure method of payment, noted Metro Group. But in mid-March, Pay By Touch, San Francisco, terminated its finger-scan payment technology at about 400 U.S. supermarkets.

Perhaps the most offbeat technology in the Future Store comes in the form of two mobile robots named Roger and Ally that serve as the store's “innovation guides.” In response to questions that shoppers enter via their integrated touchscreens, the robots “talk” to customers and, on request, even take them to see the store's technologies. Each robot is equipped with a swiveling head and sensors that allow it to find its way around the hypermarket.

But Buzek doesn't expect to see robots walking the aisles of U.S. supermarkets anytime soon. “A better technology would be to text or call a number for a response to the phone — sort of a Microsoft Maps type of application within the store for your mobile,” he said.