KROGER, AHOLD EXECS SEE NEW WIRELESS ERA

PETER PERROTTA

CHICAGO -- Executives from two of the largest supermarket chains in the country said that in the next five years wireless applications and solutions will change the face of food retailing as it now exists.

During a panel discussion at the 2001 FMI Show here, Mike Heschel, executive vice president, information systems and services, Kroger Co., Cincinnati, and Edwin R. Gropp, chief information officer, Ahold, Chantilly, Va., said wireless and "m," or mobile commerce, will serve as a new paradigm for the future.

The retailers' reflections were made during a panel discussion titled: "Wireless Internet Access - What's In Store for M-Commerce."

"I think we have a fundamental paradigm shift that is happening right now and for the next five years," said Heschel. "The whole m-commerce movement is a way of getting at anyone, anyplace, anytime in an untethered mode. You can know where they are and market them accordingly by time of day, by service."

Gropp agreed, adding, "One of the concepts that intrigues me is that somehow wireless changes the business model."

Also participating in the panel discussion was Jerome Swartz, chairman of the board and chief scientist, Symbol Technologies, Holtsville, N.Y. Swartz's company, which is one of the leaders in wireless retail technology, manufactures a "personal shopper." With the personal shopper system, customers check out the small wireless device when they enter a store and use it to scan their own grocery orders. However, the device -- slightly smaller than a cell phone and equipped with a small video text screen -- provides shoppers with a running total of their orders.

Moreover, the retailer can send the shopper m-coupons via the video text screen while they are shopping. This process is called "engaging" the shopper in the aisle and it is one of the elements of m-commerce that has retailers very excited.

"Using knowledge databases, we can do interactive marketing," Swartz said. "This gives the retailers [the capacity] to push the good stuff. This is going to be done right from the outset. As soon as the customer enters the store, there will be a dialogue going on. Retailers will be profiling the customer as they walk around."

Symbol's "personal shopper" is being used in the United Kingdom. It has been piloted in the United States and is currently in limited use.

"To do what these wireless applications require, we have to get to know our customers a lot better," Heschel said. "We have to learn their patterns and use our mobile computers to get to them," he added.

"If all of this does work, there will be an important change in the way we relate to the customer," Gropp added.

Swartz pointed out that the advanced technology m-commerce will bring the retailer's relationship with the customer back to where it was when "neighborhood grocers" got to know each customer on a one-to-one basis.

"The time, attention and focus is back to the future," Swartz said. "We will be going back to the model that will be very much like it was years ago. It will be a step-by-step approach, giving the retailer the ability to engage the shopper during the shopping experience."

Gropp agreed and said that since Ahold owns Peapod, an on-line shopping service, it has taught them that knowing something about their customers can provide valuable information.

"We own Peapod," Gropp said. "Part of the reason is that an electronic shopping experience is different.

"When you sign on, we know everything about you," Gropp explained. "We have captured every key stroke.

"But when someone enters the store, we don't even know they are in the store. That's where we are going with this."

Using Symbol's "personal shopper" system, the retailer automatically knows a customer is in the store because they must check out the wireless device by scanning their loyalty card.

"We will be able to segment customers and drive down into it using customer relationship management," Heschel said.

"All of this is going to take us back to the days of precategory management. And we will ask, what do people really want," Heschel added. "We will be getting smart."

However, both Heschel and Gropp did warn, though, that a lot of the high-tech wireless applications on the retail side are not ready for prime time yet.

Heschel said that even though wireless for the retail side is in limited use, there are numerous applications in logistics that are in widespread use.

"We have to think about it in terms of what is ready and what is not," Heschel said. Heschel said much of the research currently going on at the Massachusetts Institute of Technology, where computer scientists are attempting to make a miniature cost-effective chip that can be embedded in products so they can be traced through the supply chain, is just not ready yet.

However, Heschel said using a wireless receiving application in warehousing and inventory or mobile checkstands to do line busting is certainly within a retailer's reach right now and should be considered.

Moreover, Heschel said voice-activated picking systems in warehousing are beneficial, as well as wireless communications for tracking and routing trucks.

"Wireless makes employees more productive," Heschel said. "It can be used in office and administrative to move PCs where you want them.

"Use what you have today," he added.