Bicton Heath in Shropshire is an unassuming place. Pop into the local supermarket for a can of beans, however, and you will be transported into 10,000 square feet at the cutting edge of retail technology, from shelf labels powered by overhead strip lighting to plasma screens and a bank of self-service checkouts.
Owned by West Midlands Co-op, Bicton Heath Foodstore has already attracted visits from some of the biggest names in retail, says the society’s food division controller Roy Frodsham. “Let’s just say a lot of people are watching the shelf-edge label trials very closely, including a major high street health and beauty retailer.”
A new-build store, Bicton Heath will serve as a test bed for concepts that, if successful, will be rolled out across the society’s 35-store, £85m food retail business. And early indications are pretty encouraging, says Frodsham.
“We are committed to rolling out plasma screens to stores as we refit them and U-Scan self checkouts [from Optimal Robotics] will go into three more stores this year.”
The tills, which enable customers to scan, pack and pay for their own shopping without assistance, require only one member of staff and a split screen monitoring system per bank of four - a major cost saving, says Frodsham.
Take-up has been extremely encouraging, with just under a third of all transactions at the store now going through U-Scan tills, despite the fact the store has been open for only seven weeks and shoppers are still getting to grips with the technology.
The business case for plasma screens is equally compelling, he says, although the society’s approach to instore media differs somewhat from Tesco’s. “We are not doing direct deals with suppliers to advertise on the screens. It’s more about creating instore theatre.”
However, promoting products on the screens has already generated substantial sales uplifts on featured products, he claims. “Although the wines featured on the screen in our wine aisle were also the ones on promotion, the sales uplifts were far higher than usual for promoted lines. We almost ran out of stock.”
The screens are also a great means of cross-selling products from other divisions in the society and informing customers about Co-op initiatives and local events, he adds.
As for the shelf-edge labels, which are now attached to 10,800 lines in the store, the jury is still out. “I’m very enthusiastic,” says Frodsham, “but realistically, I think we probably need about three months to evaluate them properly.”
Despite the cost (at £2.50 apiece, the tags don’t come cheap), the benefits are substantial, he adds. Currently staff spend about 40 hours a week manually updating prices, for example. With the new electronic labels, or ‘Ilids’, this process takes minutes.
“We have big promotions every three weeks, which could mean up to 2,000 price adjustments,” says Frodsham. “There are also daily and weekly updates. With this technology, we can literally go to the computer, key in the product code number and the new price, and the Ilids and the till systems are updated instantly.”
The paper labels containing the barcode and identifying the product that are slotted into the Ilids can be generated in seconds, says duty manager Adrian Bates. “Then it’s simply a question of assigning the product on the label to the Ilid, so that it shows the correct price and unit price [eg price per 100g].”
While the trial at Bicton Heath has been part-funded by supplier Fujitsu, says Frodsham, the cost will not necessarily be prohibitive given the massive labour savings the technology brings, while pricing accuracy is also greatly improved. “The Ilids connect directly into our Globalstore EPoS system, so the price at the shelf is exactly the same as the price at the till.”
While the technology is still in its infancy, Fujitsu has had very encouraging results from Ilid trials in Foodland and Kmart stores in Australia, says Frodsham. “We’re still doing the sums, but I can see a payback in about three years.”
The Ilid system utilises high frequency light modulation in the store’s overhead lighting to transfer pricing information from the back office computer system to the electronic shelf-edge labels.
The system dispenses with the costly infrastructure that is associated with other electronic labels, such as infra-red or radio frequency.
Line of sight is not required, and reflected or ambient light works just as effectively if something moves between the label and the overhead light.
The major benefit of the technology is to reduce the labour costs of manually updating prices.
A second benefit is pricing accuracy as the Ilid system eliminates discrepancies between prices at the shelf edge and the checkout.
It also enables retailers to flex prices throughout the day for markdowns, happy hours or other promotional activities.
Finally, additional information can be transmitted to the labels such as linked promotions and allergy information or advice for staff on things such as stock levels or recommended facings.
Food stores - 35 stores between 1,500 sq ft and 20,000 sq ft
Trading area - Worcestershire, Shropshire, Staffordshire
Food retail turnover - £85m (year to September 2003)
Like-for-like sales growth - 4%
Growth areas - chilled, produce, wines and spirits, non-food
Plans for 2004/5 - testing new sales-based ordering system, preparing for Chip and PIN