As retailers finish up with 2009 and look ahead to a new year and decade, it's probably a good time to check out some new and upcoming innovations and trends in retail and wholesale technology, which are delineated on the following pages.
For example, with networks accommodating larger amounts of digital content, some retailers are leveraging more video applications. Mackenthun's, a one-store Minnesota retailer, is uploading onto its website short video segments aimed at educating shoppers and improving the customer experience. Another retailer, Redner's Markets, Reading, Pa., is using advanced video technology to go after organized retail criminals and fraudulent employees.
On the wholesale side, Bozzuto's is rolling out a system that addresses one of its perennial pain points: managing vendor information. The Connecticut wholesaler's “community management” portal will allow its roughly 3,000 product vendors to populate and update contact and other information, increasing productivity and cutting administrative costs. Improved vendor participation at Bozzuto's food shows is another potential benefit of the system.
Meanwhile, energy-related technology continues to develop in leaps and bounds — but how do retailers and wholesalers afford it? One way is to pursue the considerable funding available via the Federal Stimulus Act as well as state and utility programs. It may be time-consuming to cut through the red tape, but the potential rewards are significant.
Store cleanliness, always a fundamental supermarket requirement, has attracted greater attention this year amid H1N1 flu alerts and outbreaks of foodborne illnesses. Many new in-store cleaning efforts have focused on shopping carts, but now a new system, being piloted at a Geyer's store, promises to keep checkout conveyor belts germ-free.
INITIATIVE 1:
Reach Gen X/Y With Online Video
FOOD RETAILERS ARE beginning to leverage a variety of digital media to reach their consumers, including the Web, email, Facebook, Twitter and mobile phones. Taking a somewhat different approach, especially for an independent, Mackenthun's, a one-store operator in Waconia, Minn., is creating its own customized online videos to educate its customers and promote its products and departments.
Mackenthun's has recruited the services of Food4UTV, a new Minneapolis-based video producer and food-information purveyor that creates short, high-definition video segments for retailers and presents them on its consumer-focused website, www.food4utv.com, along with blogs and surveys. Mackenthun's, which is Food4UTV's first retail customer, will post the videos on its website; they will also be available through such sites as YouTube. Food4UTV will promote the videos through its Facebook and Twitter accounts.
Store owner Kim Mackenthun sees the Food4UTV videos as another way to reach elusive younger shoppers. “What intrigued us about it is that print ads are not read as much as they used to be,” he said. “You have to find different ways like social media to reach Generations X and Y. You try to reach younger customers in media they understand and respond to.”
The five videos Food4UTV is producing for Mackenthun's cover the following topics: “Feeling sick foods” that could be eaten during an illness, such as bananas, rice, apple sauce, tea and toast (the BRAT diet); a historical look at Mackenthun's, a five-generation family business; gluten-free products available at the store; the Mackenthun's deli; and cake design. Among those interviewed for the videos were Mackenthun, his adult children and co-owners Jaime Mackenthun and Jessa Theis, store employees, dietitians, a pharmacist, a school principal and shoppers.
By measuring the number of shoppers who view specific videos, Mackenthun's can gain greater insight into its shoppers, noted Lesli Anderson, Food4UTV's president and creator. A significant response to the gluten-free products video, for example, could mean the store should consider offering more of those products. The store will also be able to assess the redemption of printable coupons that will appear with certain videos on the Food4UTV site.
The first video, on the BRAT diet, went live last week; the second, on the store's history, will be unveiled this week. The other three will appear during January. The videos will remain up for varying periods.
According to Anderson, the five videos, each about five-minutes in length, cost Mackenthun's under $15,000, though costs vary by retailer and may be offset by CPG vendor involvement.
INITIATIVE 2:
Use Smart Video to Nab Crooks
LAST JULY, AN organized retail crime (ORC) ring originating in Baltimore targeted retail stores along Route 1 in Maryland for a shoplifting spree. The gang hit such large chain stores as CVS, Wal-Mart and Safeway, as well as a smaller retailer, Redner's supermarket in Joppatowne, Md.
What the organized criminals probably didn't know was that Redner's Markets, based in Reading, Pa., employs a searchable video surveillance system from 3VR Security, San Francisco, that captured their activity in the store. The chain's security personnel were able to quickly transmit an image of the thieves to a nearby Redner's store in Bel Air, Md., where they were apprehended later that day.
“We figured they were headed up that way, so we put our people in that store on alert,” said Cory Deily, Redner's director of security and loss prevention.
In an earlier incident, Redner's videotaped someone “loading up on meat” and walking out of one of its stores. “I pulled a still image and emailed it to a police dispatcher,” said Deily. “The police picked the guy up a half mile down the road within 30 minutes.”
As ORC rings continue to plunder stores around the U.S., retailers are seeking solutions to the problem.
Redner's has deployed 3VR's SmartRecorder surveillance system in 13 grocery and convenience stores, to address both ORC and employee fraud — the first food retailer to use the technology. The retailer, which operates 38 Warehouse Markets and 13 Quick Shoppe convenience outlets, has been testing and deploying the system over the past two years. The system is integrated with the store's video cameras and controlled remotely from Redner's headquarters
“We're hoping to have half of our stores deployed by June 2010,” said Deily.
By leveraging the system's directional, motion and facial recognition search functions, Redner's has cut the time security personnel had previously spent searching through video by 50% to 75% on average, said Deily.
The video system also integrates with Redner's exception-based reporting system, helping to readily determine cases of employee fraud such as excessive voids and returns.
The retail price of 3VR's SmartRecorder system is $4,000 per store, said 3VR. The technology has paid for itself through reduced internal fraud and better ORC investigations, Deily noted.
INITIATIVE 3:
Manage Your Vendor Community
BOZZUTO'S HAS A new “Rolodex” system, albeit a high-tech version.
The grocery wholesaler, based in Cheshire, Conn., is rolling out an online “community management” portal, from Rollstream, Fairfax, Va., that will contain all manner of contact data for its roughly 3,000 product vendors, who will be able to access the portal and update their information. Vendors can also attach information like price lists while Bozzuto's can upload its policies and procedures.
The system is still in the test phase, but will be populated with vendor data over the next two to three months, said Joy Sgro, Bozzuto's director of special projects.
“We always struggled with keeping one master system up-to-date with vendor information,” said John Keeley, vice president of information systems for Bozzuto's. The Rollstream system will allow the wholesaler to keep an active file on every vendor's key executives and other employees, including family members.
The system will also enable Bozzuto's to communicate information about projects to key groups of vendors and keep track of their progress, noted Sgro. For example, it can be used to send vendors forms for an upcoming food show that Bozzuto's will host. “We can make sure we capture every vendor,” she said.
Thus the up-to-date nature of the system can increase Bozzuto's productivity and reduce administrative costs by eliminating the need for continuous follow-up to avoid missing any key vendors, noted Keeley.
But as Bozzuto's adds vendor data to the system, care must be taken to ensure that the data is “clean” and accurate, observed Samar Saha, vice president of wholesale business information systems for Bozzuto's.
Bozzuto's declined to comment on the cost of the system.
Bozzuto's also maintains a portal for its retail customers as well as one where vendors and brokers can enter new-item information.
Other food distribution companies using Rollstream for community management include Ahold USA, Bi-Lo, Tesco and Sainsbury's.
INITIATIVE 4:
Pursue Federal and State Energy Funding
IN THE 1996 film “Jerry Maguire,” Cuba Gooding Jr. famously said: “Show me the money!” That's the attitude that food retailers should have in approaching the funding available for energy-related projects from the federal government in the American Recovery and Reinvestment Act of 2009, also known as the Federal Stimulus Act, said attorney Robert Loughney.
As Loughney explained at the Food Marketing Institute's Energy & Technical Services Conference in September, the Stimulus Act earmarked $16.8 billion for energy efficiency and renewable energy projects.
Of course, it's much easier said than done. “The money is there, and it's the intent of the government to make sure that energy efficiency occurs,” said Loughney, a partner in the law firm Couch White, Albany, N.Y. “But it's a daunting task to get through the regulations and forms, particularly if you have stores in different utility zones and states.”
In some cases, companies would apply to the Department of Energy, in others through state or local energy authorities, in others through a utility. He suggested staying informed and aggressive, and assigning personnel to the task.
In addition to the Federal Stimulus Act, individual states have their own programs focused on energy efficiency, Loughney noted.
INITIATIVE 5:
Keep Your Checkout Belts Clean
THE PROLIFERATION OF foodborne illnesses and product recalls, coupled with the drumbeat of media reports on the H1N1 (swine) flu, has left consumers more conscious of germs in public places.
At the supermarket, this has translated into the presence of anti-bacterial wipes at the entrance of stores so consumers can disinfect the handles of shopping carts.
Now one start-up company is focusing on another potential source of germs — the conveyor belt at the checkout.
H&H Green, Kenton, Ohio, has developed a mechanical system, dubbed the Pureveyor, that is connected underneath the conveyor belt and continuously cleans and disinfects the belt as it rotates under the checkout counter.
For almost a year and a half, the Pureveyor has been tested by Geyer's Fresh Foods, Crestline, Ohio, at a single store in Lexington, Ohio. The system is installed in two checkout lanes at the store, which has four lanes and an express lane.
The belts in the two test lanes “are continuously clean, as opposed to when cashiers have downtime and use a spray bottle,” said Don Peden, director of operations for Geyer's, which operates seven conventional stores and three Sav-A-Lot outlets.
The store's longtime customers notice that the belts are “consistently spotless,” Peden noted.
According to Bill Hall, president and founder of H&H Green, the Pureveyor costs about $1,700 each for up to 14 units, and decreases with volume purchases.
Hall is in the early stages of marketing the equipment. One chain has expressed interest in a trial following an independent lab test Hall is conducting at the Geyer's store to determine the level of germs on the conveyor belts.