ANALYSIS: Changes in store for retail

Safeway’s in-store TV system is a sign of things to come as big chains meet the challenges of new technology, writes Julian Lee

Safeway’s in-store TV system is a sign of things to come as big chains

meet the challenges of new technology, writes Julian Lee

Supermarkets have seen the future - and they don’t like the look of it.

Pundits are telling them it could mean home shopping and the concept of

the supermarket becoming obsolete.

Management consultancy Andersen Consulting forecasts that by the year

2000 20% of supermarket shopping will be done through electronic


In order to survive, supermarkets are having to adapt.

One such versatile retailer is Holland’s leading chain, Albert Heijn,

which has developed a new concept store that is a radical departure from

present formats.

It has a central food area where chefs demonstrate how to use the

products on sale and a food bar where the food is prepared in front of

you to eat in or take away.

Customers can then browse an outer aisle selling goods in a conventional

fashion, stop and scan a product for more information or even talk by

phone to a major manufacturer, such as Procter & Gamble, about a

particular brand.

Safeway, the UK’s third largest supermarket chain, has been leading the

way in technological innovations in this country.

It is rolling out its Shop ‘n’ Go self-scanning systems and auto pay

points are being introduced. Last week it began trials of an in-store TV

system that could evolve into interactive terminals that communicate

with individual customers. Not only is the technology working but it is

expected to deliver increased future profits as wastage, supply chain

efficiencies and lower staffing levels take effect.

According to stockbrokers Kleinwort Benson, self-scanning should boost

profits by pounds 30m by 1999.

With the advent of the Internet and online services, supermarkets are

being forced to accommodate a customer who, in the near future, will be

confronted with a myriad of buying opportunities.

In order to stand out, the supermarket will be expected to offer a range

of services that will make it easier for the consumer to shop.

Rune Gustafson, a director of retail design and strategy consultants

20/20, says the retailers which use technology as a communication tool

rather than just a quick fix to a problem will be the survivors.

‘Customers are demanding more relevant information about the products

they buy,’ he says. ‘If technology can help them in this then they

[retailers] can help them reach a buying decision much more quickly.’

If retailers move fast enough they can ride the technological wave

rather than be swept aside by it, claims Bob Tyrrell, chairman of the

Henley Centre.

‘Superstores might end up having a different function as the

distinctions between home shopping and normal shopping blur. The idea of

having stock on the shelves will be redundant. What you might find is

that they act as showcases and the customer can then order and browse at

their leisure,’ he says.


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