Buying groceries in the not-so-distant future could involve a PC, the Internet and a smart card. Will the techno-supermarket catch on? Helen Hague reports
Sunday 26 May 1996
For stressed "time-poor" consumers like this, the news is good: the technology exists to take the drudgery out of the supermarket run. Fierce competition among supermarket chains should ensure that, within a year or two, electronic convenience shopping will arrive at a store near you.
The "power shopping" concept, devised by ICL Retail Systems and unveiled to shop managers this month, aims to take the slog out of buying groceries. It combines the Internet, smart card technology and interactive in-store systems on a shopping trip that starts at home with the computer screen.
Forget lists scribbled on the back of an envelope; this weekly shopping checklist is stored on a PC. The supermarket web site is then located on the Internet, and compared with the household checklist.
At the heart of the system is a smart card - the equivalent of a supermarket loyalty card - on which personal data is stored. When it is inserted in a home PC, a menu pops up based on this information. It might remind you that it is your partner's birthday on Tuesday, or that your toddler turns three next weekend, and will provide a list of items you might need for the event. If selected, any additional goods are automatically added to the shopping list. The complete list is then checked against an "electronic larder" showing what is in the house already, also stored on the PC. A list of the items needed is then transferred to the smart card, ready for a streamlined shopping trip.
At an interactive kiosk near the store entrance, the shopper slips the card into a terminal and is welcomed by a personalised on-screen message. The store suggests amendments and additions to the list, and outlines relevant special offers based on past buying habits. If any are accepted, the list is amended accordingly and printed out, indicating where each item is located in the store and which route will help you to buy them in the most convenient order. Meanwhile, electronic loyalty coupons are added to your card. Heavy goods are packed ready at the checkout, while other items - including last-minute impulse buys - are scanned and updated and your new spending habits stored on the smart card. Payment is by electronic debit, initiated by the card. A home delivery service is also available.
Power shopping sounds too good to be true, but is it all it's cracked up to be? If you enjoy anonymity, the answer is no. Rip up your supermarket loyalty card now. Retailers are hungry for information which will help them target you as a valued customer - and, of course get you to spend a larger slice of your disposable income in their store. Recognising that all those costly edge-of-town superstores will be redundant if digital shopping takes off, they are turning the new technology to their advantage by using it to nurture customers and increase market share. Safeway has already introduced self-scanning "guns" at 24 stores and there are plans to introduce it nationally. It allows loyalty card holders to zip through the check-out without the inconvenience of unloading their trolleys.
Alun Roberts, manager of technical strategy at ICL Retail Systems, believes a lot of customers have missed the point about supermarket loyalty cards. The consumer wants discounts, while the store wants information. "If the customer is willing to reveal his or her behaviour, stores can begin to form a proper relationship and serve them better. It is all to do with segmenting - offering a tailored service to high-value customers and, using electronic interfacing, getting that relationship back to where it used to be 50 years ago."
The confectionery and food giant Nestle will be opening two "virtual shops" in Switzerland next month, along similar lines. But the day when a supermarket trip will be completely replaced by a meander round the shelves in a virtual shopping mall is still a long way off. However, digital shopping in a more primitive form has already arrived. You can order Sainsbury's wine and gizmos from the Innovations catalogue on the Internet. You can buy videos from Virgin, books from WH Smith and hi-fis from Dixons on the UK Shopping Centre on-line service launched by CompuServe last year. In the US, such systems are widely used.
But how much of an appetite does the British public have for this kind of shopping experience? Doreen Dignan, media research manager for The Network, part of the Ogilvy Media Company, believes people will shop in a digital environment "if it will save time or money". She has conducted market research and found a considerable appetite, especially among women, to do routine shopping without having to go to the shops. "The response was more positive than we thought across all socio-demographic groups."
But there are limits. A programme which allows a bride-to-be to see a 3D virtual image of herself on-screen, kitted out in various wedding frocks, did not go down too well. It seems there is no substitute for trying on dresses, feeling the fabric and having a twirl in front of the mirror. An in-store kiosk where wedding guests can view the bridal registry and check what has already been ordered to equip the happy couple's new home sounds more promising.
Meg Abdy, senior consultant at the Henley Forecasting Centre, believes digital shopping will only take off if it makes consumers' lives "easier or more exciting". Stores which score highly on trust stand to gain, she believes. The British Market Research Bureau found Marks & Spencer, Sainsbury's and Tesco were in the top four most trusted companies. "Customers are constantly bombarded with choices. They have a sense that things are speeding up and they have less and less time. They trust retailers to edit their choices, whether in the shop or on a computer screen."
Digital shopping, she believes, is never going to replace traditional shopping, but will co-exist and help streamline consumer choice. "The real sticking point is not so much technology as delivery - getting the right product to people at the time they find most convenient."
Graham Freeman, retail director at design consultancy BDG/McColl, thinks technology will enhance the in-store shopping experience. "Stores will have to be more reactive, dynamic and entertaining places. If you are, say, at a sports club and can access products through technology, why not go to a store and do it? Retailers will have to be more inventive, it will drive up quality. The customer will be the winner."
Not all customers will win, however. As retailers gear up for the next phase of new technology, Alun Roberts at ICL predicts a new underclass: "a lot of low-income people who will, I'm afraid, be disenfranchised from what is going to happen." To gain full citizenship in the digital shopping community, you will need a PC, access to the Internet - and, of course, income to dispose of. This, after all, is what the retailer is after. !
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