FOUR KROGER STORES TESTING INTERACTIVE RETAIL KIOSKS

MARC MILLSTEIN

BOCA RATON, Fla. -- Imagine customers at a Kroger Co. supermarket tapping into interactive multimedia kiosks to purchase video cassette recorders, computers, watches, jewelry, children's books, products from L.L. Bean and The Gap and other nonfood items.

That is the actual scenario now unfolding at four Kroger stores testing high-resolution interactive kiosk technology, according to speakers at a conference here titled "Keeping and Attracting Customers With Interactive Solutions."

The conference, which drew about 90 attendees, was sponsored by SN, published by Fairchild Publications, New York. The event took place Jan. 11 and 12 and was co-sponsored by Deloitte & Touche, Hewlett-Packard and Microsoft.

The interactive kiosk units at the Kroger stores feature more than 8,000 stockkeeping units, including a wide assortment of branded merchandise from several key retailers, such as L.L. Bean, The Gap and even Price/Costco, said Eric Pulier, president and chief executive officer of Digital Evolution, Brentwood, Calif., and Bob Johnson, director of business consulting at MCI, Colorado Springs, Colo.

Pulier and Johnson spoke at a conference session titled "Developing the Right Interactive Solution for Your Retail Format."

The 6-foot high kiosks are being tested at Kroger supermarkets in Atlanta, Cincinnati, Cleveland and Huntsville,

Texas, in a diverse range of neighborhoods and retailing markets. Each store features five to six kiosks positioned at different stages of the traffic pattern to help precisely measure customer usage, the speakers said. Kroger officials declined to comment.

The system reportedly can accommodate and track usage of electronic payment and frequent shopper cards as well as which electronic paths customers take to access information and move to different sites within the system.

The chain and the kiosk providers are now evaluating the results of the test, launched early in 1995, before deciding on possible future rollouts of the system, Pulier and Johnson said.

"As far as the expansion goes, we just finished the trial at the end of the year and are still talking with the Kroger KMAs and other customers we have interested in putting this in their stores," Johnson said. He stressed that MCI, which developed the kiosk system, and Kroger had not reached any agreement on future installations at the chain.

The kiosks "give retailers the ability within a very small space to offer tens of thousands of items for sale that they don't carry themselves. To create a shelf selection that large would be a problem," Pulier said. Digital Evolution worked on the kiosk's interactive software applications.

The kiosk system, Johnson added, was designed to allow "a grocery store to compete with a Wal-Mart and Kmart and all those other retailers now selling groceries and competing with supermarkets."

With the system at Kroger, MCI has primary responsibility for deciding which products and retailers are featured within the kiosks, Pulier told SN following the presentation. Items considered a competitive threat to Kroger, however, are not included, he said.

Customers using the kiosks, which feature large, high-resolution computer screens, can browse through and order from diverse product offerings and retail outlets. The system is designed to process electronic payment information and transmit orders to participating retailers, who are then responsible for providing any product delivery services.

"We have the ability to bring up very quickly from hundreds of thousands of items a picture, a description, a price and video and sound associated with every object," Pulier said.

"The real purpose of the [Kroger] test is to evaluate the system in various customer environments. Some are in very rural settings and some are next to shopping centers where customers can go across the street and buy the product" rather than ordering it on the kiosk, Johnson said.

"The key point is this product is totally interactive. We are keeping track of all the habits of who buys what and where they have been. We have been collecting that data for about the last two months," he said.