Enter the Metro Future Store, and the future begins now. On its list of surprises: a Personal Shopping Assistant (PSA) that displays your shopping list and shows you exactly where each product can be found; a produce scale that "sees" what product you are weighing; electronic digital price "tags" on store shelves that can be changed every hour, if so needed; video display screens all through the store showing today's specials, which can be changed by the minute; a wine aisle in which a computer matches the perfect wine selection for tonight's dinner—and then guides you to the bottle's location via a beamed display on the floor. And, no need to empty the cart's contents onto a conveyor at checkout—just hand the PSA to the cashier and pay. Meanwhile, in the back room and even on the shelves, RFID tags are tracking product, from distribution center to back room to store shelf to checkout. No, this is not your ordinary supermarket.
The Metro Group Future Store initiative is a cooperative project between Metro Group, SAP, Intel, IBM and T-Systems, as well as about 50 other partner companies in RFID, IT, supply chain management and retail. All of the installations and tests are being funded solely by the partner companies. The initiative serves as the platform for technical and process-related development and innovation in retailing. In the long term, the project organizers hope to set standards for retailing that can be implemented on an international scale.
In April 2003, Metro Group opened its Future Store at an Extra supermarket in Rheinberg, Germany, a semi-rural town about an hour's drive from Dusseldorf, where Metro is headquartered. Rheinberg was chosen for the specific socio-economic profile of its residents—some urban professionals to some rural farmers, and just about everyone else in between. Extra is a fully functional supermarket, in many respects not much different than any other store in Europe. But it's not any other store, and it's in those differences that the technological innovations lie. PD visited the store and the Metro Group Innovation Center, located in Neuss, in late April.
Metro Group, one of Europe's largest retailers, owns not only an extensive chain of supermarkets but also Germany's largest department store chain, Kaufhof. While this article explores the technologies being developed and tested for supermarkets, further experimentation is being conducted in product tracking and consumer assistance at the department store level.
One of these technologies is RFID. Although RFID is used primarily in the supply chain and Extra's back room, it also provides customer benefits in-store. While many of Extra's vendors are now attaching RFID tags to pallet loads of products, the store itself is tagging some primary packages: Procter & Gamble's Pantene Pro-V line of haircare products, Kraft's Philadelphia cream cheese, and Gillette's Mach 3 razors and blades. With RFID, the movement of products through the supply chain can be identified, right to the store shelf and on through checkout, if the primary package is tagged. Stockouts can be prevented, since a smart shelf can notify the backstore of the need for replenishment. According to Metro, goods can be reordered according to demand, and the number of wrong deliveries is considerably reduced.
Before delivery to the Future Store, goods are sorted by case load onto pallets in a central warehouse by Metro Distribution Logistics (MDL). The cases and the pallet are each given a smart chip that contains the bar codes of the products in each case and the number of the pallet. Warehouse employees read this data into an electronic RFID merchandise-management system, which is connected to the Future Store. As the store requires replenishment, the loaded pallets are moved to the exit zone of the central warehouse, where an RFID transceiver, or gate, records the identification of the products. At this point, the inventory-management system changes the products' status from "in storage" to "in transit."
When goods are received at the Future Store, employees transport the pallets from the truck through yet another RFID gate at the store's back entrance. The reader can identify as many as 35 tags per second. Now, the products' status becomes "received in-store." Most product is then stored temporarily in the back room. Each storage location is equipped with a smart chip. As each case is loaded onto a shelf, the case chip and shelf chip are read via a handheld reader and matched. Employees now know exactly where every product is stored.
As goods are moved to the sales floor, the cases move through another RFID gate, where the chips are read and products' status is now changed to "on shelf." When the employee has emptied the case onto the shelf, the smart chip is removed from the corrugated and deactivated before the empty case is moved to the back room.
While RFID is the most prominent technology being tested at the Future Store, it is not the only one. State-of-the-art information media and electronic personal devices are providing customers with a very customized shopping experience.
The Future Store uses a number of technologies for communication with the customer. The information systems make shopping easier, faster, more convenient and decidedly more interesting. Among those features, customers can take advantage of a Personal Shopping Assistant, or PSA; information terminals; intelligent scales; electronic shelf labels; smart shelves; electronic advertising displays; and expedited checkouts.
At Metro Group's stores, a customer must prove he/she is at least 16 years old to request a loyalty card; beyond that, the stores require no other personal information.
Customers with a loyalty card can receive a Personal Shopping Assistant, a mobile computer, as they enter the store. The PSA resembles a small, portable computer and is designed to help customers with their shopping. The computer snaps onto the center of the shopping cart's handlebar. After authorization with the loyalty card by a store employee, the customer can take advantage of a number of individual services. For example, the person can recall his own shopping list, which he downloaded from home before going to the store. He can also view lists of recent purchases. For the shopping-list display, the customer can ask the PSA to identify the location of all his selected products, or only those in the aisle where he is at the moment. On the right side of the screen are displays of special offers. These displays are geared to the customer's personal preferences and past shopping history and are changed to reflect the shopper's current location within the store. The PSA communicates with the store's central data server via an internal wireless local area network (LAN).
The shopper can self-scan articles as he puts them into the cart, thus receiving additional product and price information. The PSA includes a built-in EAN bar-code scanner. Items scanned are then displayed on the PSA's screen, along with the price. Then, at the checkout, the customer simply hands the PSA to the clerk, who prints out a price list and tally. There is no need to empty the cart's contents onto the conveyor for scanning.
In the fresh produce department, intelligent scales equipped with electronic vision systems "see" the produce being weighed and print out a bar-code tag for checkout. The checkout clerk, therefore, does not have to weigh the produce. The camera and special software recognize each product by its surface texture, color, size and thermal image. If a mixed load is placed on the scale, an error message is displayed, and no tag is printed. Only one type of produce at a time can be weighed: for example, three tomatoes, or four oranges, or six potatoes. The intelligent scale is used only for bulk produce; prepackaged produce already has a bar code.
Information terminals are available in certain sections of the store, such as meat, wine, fruit and vegetable, baby products and haircare. They can provide some of the information normally available from the PSA even without a loyalty card. The displays are operated by touch-screen. Shoppers can view a store layout showing the exact location of any product in the store. The displays can show information on how specific products are manufactured, as well as ingredients. If a customer wants to find out more about certain cuts of meat or how to cook them, he can do so easily on the touchscreen, then print it out right at the terminal. The computers also offer recipes using the products in that department.
At the wine aisle, the information terminal can pair a type of wine with tonight's dinner selection. Then, a light icon is beamed onto the floor of the aisle to show the shopper exactly where that bottle of wine can be found.
The functionality of the terminals is continuously being expanded, according to a Metro spokesperson. The store's terminals will soon be able to provide nutritional information for allergy sufferers and vegetarians, for example.
Conventional price labels are, for the most part, a thing of the past in the Future Store. Shelves are equipped with electronic shelf "labels" (ESL), which are connected to the wireless local data network of the store.
Unchanging information, such as the product identification, is printed on a paper label and affixed under the LCD display. Price changes can be made at the store level—or at the headquarters—in a matter of seconds. In fact, the prices for all 40,000 items in the Future Store can be changed in less than one hour. Since the checkout systems are connected to the same wireless data system, incorrect prices are avoided completely.
The ESL does more than just display pricing, however. It can also be used to display other product information, or a flashing display can be used to draw attention to special offers and promotions. ESL can also communicate to store personnel information such as stacking heights and shelf quantities.
Large, 42-in. plasma advertising screens are provided throughout the store, featuring static images or video animations. Attached to the ceiling, they provide information and special offers on products that are in the immediate vicinity. The images can be changed or rotated in a matter of seconds, as easily as the shelf labels are altered, since the displays are also connected to the wireless data system. The display screen can promote a specific product or announce a special sale. For example, the store manager can run a special on gallon-size milk between 5 and 7 p.m. on Friday only. The screen announces the special sale, and the shelf label reflects that price change, which switches back to its everyday price at 7:01 p.m. on Friday.
Most of these customer conveniences involve advanced electronics and a wireless data interchange. However, testing with RFID at the product and shelf level is also ongoing at the Future Store, but only with three product lines, as mentioned earlier: Pantene Pro-V, Kraft's Philadelphia cream cheese and Gillette Mach 3 razors and blades. The individual RFID tags are being attached at the store, not at the manufacturer. For these products, the shelf itself is also RFID-enabled, so that stockout situations can be tracked and product replenished on-shelf. If an article is removed from, or added to, the shelf, the display detects the change and updates inventory records. The Smart Shelf also supports quality assurance: It automatically recognizes when the expiration date has been exceeded and informs staff accordingly. Only the Gillette RFID labels are placed inside the packaging; the others are clearly visible on the outside of the packaging. However, the Gillette smart shelf is prominently identified as RFID-enabled.
At checkout, the shopper has three options. First, the customer can do a conventional checkout by emptying the contents of the cart onto a conveyor, with the cashier scanning each item. Or, the customer can scan the items into the PSA and then just hand the PSA to the cashier. Products then go directly from the cart to bags or boxes. Or, the shopper can do a self-checkout, where he scans each item and places it directly into an open plastic bag, which is sitting on a scale. If the weight of the item added to the bag does not match what was scanned, a store attendant is notified that there is a problem. Payment in all options is the same: cash or debit/credit card.
One last step that the customer can take, if they choose, is to deactivate the RFID tags before leaving the store. According to a Metro spokesperson, the deactivation terminal is rarely used.
More information is available:
Metro Group, 49 1805 638760. www.metrogroup.de
SAP, 49 1805 343424. www.sap.com
Intel, 800/628-8686. www.intel.com
T-Systems, 49 69 66531-0. www.t-systems.com
IBM, 800/426-4968. www.ibm.com
Boston Consulting Group, 617/973-1200. www.bcg.com
Customers appreciate the service
Since refurbishing the Extra supermarket, sales at the store have increased. According to a survey by the Boston Consulting Group (www.bcg.com), 30 percent more customers visit the store; the number of regular customers increased from 30 to 43 percent; and 54 percent of those questioned said they were "very satisfied" with the store, up from 20 percent before the changes.
Seventy-seven percent of the customers, including many older people and others who freely admit to being technologically challenged, have used Future Store's technology. The information terminals have proved to be particularly popular, especially the "wine consultant." The good news for the store: Customers who take advantage of the new technology spend more time in the store...and spend more money.