Yesterday, I was doing my grocery shopping at a local big box retailer. Not Wal-Mart. Even though I am a marketing guy I got tired of playing the loyalty card price discount game that the local grocery stores play. It's just too much hassle to buy products the week that they are on sale and skip them on their off weeks. Wal-Mart is on to something with their always low prices strategy. The deeper you look the less you like what that strategy means but the idea of a steady price is a good one.
So, anyway, I am at the store getting groceries and it's time to checkout. For those of us who can see and understand the future of how this can work and the efficiencies to be gained this is a frustrating time. I like many am a huge fan of the self checkout systems. Unfortunately, for a variety of reasons these systems are often offline. Whether it's technical issues, staffing or shrinkage issues I don't know. At best these are a transition technology waiting until the ground shift of Radio Frequency Identification(RFID) tags becomes a reality.
Basically RFID tagging means adding a computer readable "tag" to each item in a retail store. This tag, usually a sticker or built into the product packaging, carries a unique identification code similar to the information in a barcode. Unlike barcodes RFID tags can be read by a scanner at a distance usually just about 3ft or 1 meter. Computers and scanners can "read" the contents of entire trucks or shopping carts in seconds with little or no human assistance.
RFID tagging while controversial among privacy advocates will eventually win out as globalization and price pressures continue to drive costs out of the supply chain process. When RFID becomes commonplace the checkout process will be as easy as pushing your cart full of good through the exit door of the store. The door will be equipped with tag readers that will scan the contents of the cart and the credit card in the shoppers purse. Computers can total the former and charge the latter.
Until that day comes I'm stuck in a long checkout line daydreaming about the coming changes to the big box retail store. Some of the major changes coming:
The Last Shall Be First - Look around the store today. Who would you say are the least important people? You might say the greeters and the food samplers. These are often low paid part time employees usually friendly senior retirees. In some stores you still see baggers and cart attendants. When technology replaces the cashiers the only remaining people who have customer contact will be the greeters and product samplers. A huge opportunity will exist for people who can "host" and "MC" an entire store and customer experience.
Reclaimed Square Feet - Gone will be the need for twenty or thirty checkout lanes that sit idle as the low overhead pressures keep staffing levels low in all but the busiest times. Replacing these checkouts will either be more revenue generating sales floor or smaller gross square footage in newly constructed stores.
Store Merchandising/Stocking - Think about the last time you shopped a big box store? How many products did you select from a fixed store shelf vs. a pallet display? Many big box retailers have, following Wal-Marts lead, outsourced much of their stocking to their suppliers in the form of the palletized display. Suppliers provide their product stacked or arrayed on cardboard shelves all on a pallet that is moved from truck to stockroom to sales floor all by one worker in a minimum amount of time by use of a fork lift or skiff loader. When the labor cost savings of eliminating human cashiers combines with supply chain efficiencies brought by RFID implementation even greater automation will come to the stocking process. Computers throughout the organization will know exactly how much stock is in every store and shelf within the store. Imagine the increased efficiencies in the end to end supply chain with greater intelligence like this.
Shopping Carts - When the products are smart through RFID tags there's no more removing the individual items for scanning at checkout. Entire cartloads will be scanned simultaneously. Without the need to remove items from carts bagging items disappears. A huge cost savings for retailers. This changes the whole game. Some consumers will simply carry their own reusable bags to the store like they do now. Some will bring their own carts to the store. Like strollers for children, Americans will enjoy their own self selected and customized shopping carts. Increasing concerns about germs and bacteria on public shopping carts are eliminated if shoppers are bringing and cleaning their own. If shoppers are showing up to the store with their own carts retailers can reduce or eliminate the ones they supply. Even these costs can be recouped by leasing these carts to shoppers much like airport luggage carts are leased to luggage laden travelers. Flexibility is built in. Frequent shoppers can acquire smaller carts. Large families can use a wagon train of big carts, Disabled shoppers can use electric powered carts, families can use carts that accommodate and entertain their given number of children.
Ripple Effects - Just as highways begat fast food restaurants and fast food begat cup holders in vehicles consumer owned and operated shopping carts or trollies will affect vehicle design. Automakers may be a winner from this trend as they can design carts that automatically integrate into vehicles like SUVs and Minivans. Even cars can feature storage pods that can be removed from a trunk area and used as shopping carts. Even home design will be effected. Shoppers returning with their loaded personal shopping carts will want to more that cart directly from their vehicle into their home. Ramps or step capable cart designs will be necessary. It's all about conservation of movement. Why move items from self to cart, cart to checkout counter, check counter to multiple bags, multiple bags to cart, cart to vehicle, vehicle to home, bag to shelves and cabinets when you can simplify it and streamline it to self to cart, cart to vehicle, cart to home, cart to shelves or cabinets. Time, effort and therefore money saved.
The bottom line is that Wal-Mart is teaching the world to love always low prices. Technology will change and augment the shopping experience and those changes, the next biggest being RFID, will have broad effects on the experience of shopping. Some will hate the new experience just as some hate the way things work now. The RFID revolution is broad enough that it will bring changes to other retail formats as well. Big box retail will make it cost effective and smaller stores will build enhanced experiences on top of the efficiencies. Web services will rethink grocery lists. Delivery services will flourish with the new efficiencies. New entrepreneur opportunities will abound. Old ways will be replaced with new ways. The future will be different from the present.
Related:
RFID checkouts getting faster
rethinking the grocery list
grocery store technology
bike messangers gtting buggy whipped
hope for jobs displaced by technology
checkout shifting sands
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