Feb 27, 2003 (07:02 PM EST)
Supermarkets Check Out Self-Checkout

Read the Original Article at InformationWeek

A Jewel-Osco supermarket in Barrington, Ill., is serving as a laboratory for technology that could change the way Americans shop for groceries.

At this supermarket, shoppers swipe their customer-loyalty cards into a kiosk that dispenses a handheld scanner, then scan and bag groceries as they move down the aisles. When done, they enter an unstaffed checkout lane where they swipe their cards and pay for the groceries, often not interacting with store personnel.

"It's a very fast pass-through experience," says Bill Bishop, a retail consultant who lives in Barrington and has made that Jewel-Osco his primary grocery store. "Once people experience it, they're going to like it."

Albertsons Inc., Jewel'Osco's parent company, won't comment on the test. Nor will NCR Corp. and Symbol Technologies Inc., developers of the systems, other than to confirm that a large grocery chain is testing the system and plans a bigger pilot. But the current pilot is an example of how self-checkout is starting to change how people shop, not just how they pay.

NCR and Symbol said this week that they're marketing a self-service system that uses Symbol's handheld device and NCR FastLane, a self-checkout system already used by several U.S. retail chains. The Symbol device displays purchase information to shoppers, and the purchases are transmitted to the store's cashier system via a wireless network.

This goes beyond the original self-checkout systems, which have been growing in popularity but essentially let shoppers do only what a cashier would do. The Food Marketing Institute issued a report last week showing that 24% of retailers, mostly grocery chains, are implementing self-checkout systems, up from 19% last year. In 1999, only 6% were using them.

Fujitsu Ltd. jumped into the fray in late February, saying it's developing a self-checkout system based on technologies from Optimal Robotics Corp. Many stores promote self-checkout in express lanes, but Optimal demonstrated at the MarkeTechnics trade show a configuration allowing more items per customer. PSC Inc. introduced self-checkout that can handle personal checks and uses voice prompts and illustrated instructions.

Shaw's Supermarkets Inc. plans to expand NCR self-checkout systems from 52 stores to 120 this year. "The more of these we put in, the more customers flock to them and tell us they like them," says Paul Francis, Shaw's senior manager of security and front-end systems. Customer use of the systems ranges from 8% to 23%, depending on the store.

Supermarkets tend to emphasize the speed of self-checkout, but it's more valuable than that. NCR says a typical configuration of four systems costs about $100,000 per store and pays for itself in about 12 to 18 months through lower labor costs for checkers and baggers.

The timing isn't right for handheld scanners at Shaw's. Wireless networks and security standards need to improve before the chain would be ready, Francis says. However, Shaw's is looking to test expanded self-bagging areas that support self-checkout for customers with a larger number of items.