With ecommerce taking an ever greater share of consumer spending, those committed to physical selling have to find ways to make the experience as seamless as that at home - but with the added fun of being there with the crowds and the actual merchandise.
People still report that shopping is one of their favorite leisure activities. Humans are social animals. As a general rule we like to see and be seen. When we buy, we prefer sensory perception: to touch and smell and hear. But we are increasingly pressed for time and, frankly, jealous of the free time we do have. We dont like it wasted or spent needlessly and we have become more discerning - some might say bitchy - about how we make that distinction.
Stores start with the benefit of providing the sensory feedback consumers prefer. Their advantage quickly, dissipates, however, when they subject their putative customers to the hassles of parking and walking long distances and then making them wait for service once they have actually fulfilled the merchant's dream by selecting something to purchase. In few other fields of human endeavor does the system throw as many disincentives to act at the buyer than retail.
Eliminating those hassles, therefore, has considerable value, while failing to do so subtracts same. Because of this, technology is beginning to play an increasingly important role in reducing inconvenience, as the following article explains. While it may never entirely do away with the hurdles, technology can provide both the perception and the fact of greater ease and comfort. With a growing number of interactive displays in stores, the impending loss of its tax advantage for online retail and the reduced hassle, physical selling may become truly competitive. JL
Julie Jargon reports in the Wall Street Journal:
Reducing wait times is becoming a top priority for retailers, from high-end department stores to hardware chains to fast-food outlets. Battling both online rivals that offer at-home convenience and intensifying competition among fellow brick-and-mortar outlets, many companies see enhancing the shopping experience as a way to build loyalty.
Supermarket giant Kroger Co. KR +0.26%is winning the war against lengthy checkout lines with a powerful weapon: infrared cameras long used by the military and law-enforcement to track people.
These cameras, which detect body heat, sit at the entrances and above cash registers at most of Kroger's roughly 2,400 stores. Paired with in-house software that determines the number of lanes that need to be open, the technology has reduced the customer's average wait time to 26 seconds. That compares with an average of four minutes before Kroger began installing the cameras in 2010.
"The technology enabled us to execute at the front of the store without that additional (labor) expense," said Marnette Perry, senior vice president of retail operations for Kroger."It's remarkable that we've been able to improve execution as much as we have without a big price tag."The now-ubiquitous bar code started out 40 years ago when a pack of Wrigley's gum was scanned. How's the barcode evolving in the age of mobile technology? GS1 U.S. president and CEO Bob Carpenter joins MoneyBeat. Photo: GS1 US.
"Since the checkout is the last experience in a store, if it's a bad experience, you'll probably see that financially," says Kurt Kendall, retail strategist with Kurt Salmon, a management consulting firm. "Retailers could speed up their service if they fully staffed their lanes, but they are trying not to staff all their checkout locations. This is the dirty little secret of this."
Other retailers and restaurant chains are experimenting with technologies to speed up service, including mobile ordering and payment systems that use customers' mobile devices or hand-held gadgets by sales people.
McDonald's Corp., MCD +0.84%seeking to improve customer service amid mounting complaints, is implementing a new "dual point" ordering system in which customers place their order at one end of the counter and pick it up at another once their number appears on a screen.
The order-taker is supposed to focus on the customer while a "runner" performs other tasks such as dispensing drinks and condiments. The new system is in place at just under 10% of the company's 14,000 U.S. restaurants and is expanding.
"While dual point was in test, we saw better attention paid to hospitality—specifically eye contact and full attention being paid to the customer—which results in a better customer experience and order accuracy," a McDonald's spokeswoman said.
Wal-Mart Stores Inc. WMT +1.01%is testing a new "Scan & Go" system in which customers use the Wal-Mart iPhone app to scan the bar code of the items they want to buy and bag them as they shop. When they get to a self-checkout lane, customers hold their iPhone up to the self-checkout screen, which wirelessly receives the scanned items and prompts them to pay. The company began testing the system in December 2012 in about 70 stores and has since expanded it to more than 200 stores in 14 markets.
A Wal-Mart spokeswoman said the company is experimenting with innovative technologies like mobile self-checkout because its "customers are shopping differently than they ever have before—they're using their mobile devices to search for coupons, compare prices and navigate aisles."
Some experiments with new checkout technologies haven't gone well. Many companies are expanding use of self-checkout systems, where customers scan in their own items and place them on weight-sensitive platforms designed to make sure all goods are paid for.
But IKEA, the Swedish furniture giant, and Albertsons LLC, the Boise, Idaho, supermarket chain, are doing away with self-checkout because they believe the systems make shoplifting easier.
The military has used infrared vision extensively for navigation and surveillance purposes, as have law-enforcement officials, including those in Watertown, Mass., who used the technology to determine that one of the suspected Boston Marathon bombers was hiding in a boat. Since the late 1960s, when the first commercial infrared cameras were developed, the technology has been used for a number of civilian ventures, including art restoration and building inspections.
Kroger's system, dubbed QueVision, is now in about 95% of its stores, which operate under the Kroger, King Soopers and Dillons names, among others.
The system includes software developed by Kroger's IT department that predicts for each store how long those customers spend shopping based on the day and time. The system determines the number of lanes that need to be open in 30-minute increments, and displays the information on monitors above the lanes so supervisors can deploy cashiers accordingly.
Kroger declined to specify the cost for installing QueVision, but says the cost of running it is minimal. While it is hard to break out the exact impact faster lines have had on sales, the company says surveys show customer perception of its checkout speed has improved markedly since 2010.
And Kroger executives said they learned something surprising from QueVision data that helped them boost certain orders. The system showed that there were more customers than Kroger realized buying a small number of items in the morning and during lunchtime, and that the express lanes were backing up. So Kroger added 2,000 new express lanes to its stores nationwide, which it credits with growing the number of those small orders over the last two years.
Kroger in March reported fourth-quarter profit of $461.5 million, exceeding analysts' expectations, compared with a year-ago loss of $306.9 million that included a big pension charge. Sales increased 13% to $24.15 billion.
Kroger executives say they are continuously improving the QueVision software to better predict shopping behavior and fine-tune the staffing of the checkout lanes. And they are testing other ways to get shoppers out more quickly, including a tunnel-like device resembling an MRI machine that scans items as they go through, then automatically bags them.
"The bottom line is we want our checkout experience to be the best and it's our goal that our customers will enjoy the experience so much that they'll want to return," Ms. Perry said.
Technology can help businesses speed up checkout lines:
Kroger—Infrared cameras detect the number of people in the store, while software predicts how many lanes should be open.
Nordstrom—Hand-held devices let customers pay from anywhere in the store and help associates follow inventory.
Wal-Mart—Shoppers can use an app to scan bar codes and track their spending before paying at a self-checkout lane.
Chili's—Diners can pay for their orders at the table, using a small, flat-screen device.
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