Magazine Article | September 1, 2003

Store Of Whose Future?

Source: Innovative Retail Technologies

The store of the future concept is cool, but the glamour wears off if the gains are lacking.

Integrated Solutions For Retailers, September 2003
Matt Pillar

I'm enjoying the hype created by Extra, the German retail giant Metro Group's 'grocery store of the future' concept. But just like every _____ of the future, the hype must be taken with a proverbial grain of salt. Don't get me wrong; I believe some of the store's technologies, like RFID (radio frequency identification) and wireless PDAs (personal digital assistants), deserve your attention. Kudos to Intel, SAP, and the other sponsors of the project for showcasing what could - and some of what will - be. I really do think the statement the store makes for supply-side standards will be a driving force of change in the industry. But, a scale that can identify my fruits and vegetables is more neat than it is functional. Yes, a clerk who doesn't know a mango from a melon might be costing a grocer money every time there is a sale on mangos, but is a 'smart' scale worth the cost? Technology like this is harmless, for sure, albeit nothing worth getting too excited about. So, what is worth getting excited about?

Practical Uses For RF
RF (radio frequency) technology, now there's something the store of the future retailers can get excited about. I'm encouraged that the RF portion of the Extra project is garnering lots of attention. This technology - as opposed to gadgets like fruit-identifying scales and Web-enabled devices that notify me when my loaf of bread is ready in the bakery - is proving the cost of its development and implementation worthwhile by posting real shrink savings and real supply chain efficiency gains for real retailers. It's also showing promise for expediting transactions and automating price and promotion management. Not to mention the myriad customer loyalty programs that rely on RF technology. (See this month's IT Forum on page 16.) I toss some of the other stuff I see out there into the "technology for technology's sake" category. Or, perhaps it's technology for the vendor's sake. It's worth a sound bite in the news, but the technology itself is a flash in the pan. It may help a vendor's 'thought leadership' positioning, but retailers looking to spend IT dollars wisely (and which ones aren't?) should beware.

Also, keep in mind that the Metro 'store of the future' concepts are carefully placed in urban European locales. Could something like this fly in New York, Atlanta, or Los Angeles? I'm sure trendy people would flock to such a high-tech store. I'm not even trendy and I'd check it out. But would it work in Middle America (or Erie, PA, for that matter)? Not in the near future. My advice to retailers is to carefully measure gains, not glamour. What about Web-enabled in-store notification of my bakery order? No, thanks. After all, even Wal-Mart, the retailer by which all others seemingly live and die, simply pages patrons on a good old-fashioned loudspeaker when their vehicles are ready at the Tire & Lube Express.