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... media technologies: a case study of the grocery retail industry and self-serve checkout in Yakima, Washington. ... Retail. Industry. Operational Definition. Grocery Industry:
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Slide 2:The trend towards a reduction of human interaction in commerce as a direct result of advances in digital media technologies: a case study of the grocery retail industry and self-serve checkout in Yakima, Washington.
Research FocusResearch Focus
Slide 3:Foundations for grocery self-serve checkout
Slide 4:Gas Station: Self Serve & Pay at the Pump
Perceived Advantage (Customer Gratification): Speed Savings Privacy Evolution and Trends leading to self-serve in grocery retailing. Self-serve Introduced in the 1970s. Pay at the pump in the 1990s. Incentive lower cost than Full serveEvolution and Trends leading to self-serve in grocery retailing. Self-serve Introduced in the 1970s. Pay at the pump in the 1990s. Incentive lower cost than Full serve
Slide 5:Banking: ATM (Automated Teller Machine)
Perceived Advantage (Customer Gratification): Eliminate waiting in line 24hrs access Privacy ATM now Ubiquitous. Plains Dealer, Mary Vanac. May 25, 2003 Today 300,000 ATM’s averaging 4,000 transactions/month Article “C” 14 billion transactions last year Novak, Austin American June 2003 Article “D”ATM now Ubiquitous. Plains Dealer, Mary Vanac. May 25, 2003 Today 300,000 ATM’s averaging 4,000 transactions/month Article “C” 14 billion transactions last year Novak, Austin American June 2003 Article “D”
Slide 6:Travel: Ticket Kiosks
Perceived Advantage (Customer Gratification): Eliminate waiting in line Convenience Privacy Delta Airlines: Kiosks cost $10,000 each compared with a salary worker service agent at $20,000 - $40,000/yr + benefits. 22 million of its passengers (40 percent of total) checked in by touch screen (up from 350,000 in 2001). NY Times article “More Customers reach out to touch the screen” Amy Harmon, Nov 17, 2003). Refer Article numbered ADelta Airlines: Kiosks cost $10,000 each compared with a salary worker service agent at $20,000 - $40,000/yr + benefits. 22 million of its passengers (40 percent of total) checked in by touch screen (up from 350,000 in 2001). NY Times article “More Customers reach out to touch the screen” Amy Harmon, Nov 17, 2003). Refer Article numbered A
Slide 7:Universal Product Code
UPC has set January 1, 2005 as sunrise date for North American Retailers to be capable of scanning 13 digit European Article Number (EAN) barcode Point of Sale and store 13 digits in their database. Encouraged to upgrade to 14 digit capacity. End of 12 digit limit and globalization for EAN integration. FMI Technology Highlights 2003. UPC basic info Canadian Packaging, toronto article april 2001 (Article “E”)UPC has set January 1, 2005 as sunrise date for North American Retailers to be capable of scanning 13 digit European Article Number (EAN) barcode Point of Sale and store 13 digits in their database. Encouraged to upgrade to 14 digit capacity. End of 12 digit limit and globalization for EAN integration. FMI Technology Highlights 2003. UPC basic info Canadian Packaging, toronto article april 2001 (Article “E”)
UPC (Universal Product Code): A universally applied code consisting of a series of 12 vertical bars affixed to consumer products or inventory items. This code is consistently readable at a variety of angles via a code scanner. The code includes information on the product’s origin, content, and pricing. The first six digits refer to the company, and the following five digits refer to that company’s particular product. There is a final “check digit” to complete the twelve digit code. Operational DefinitionSlide 9:Yakima Washington
Population Demographic ComparisonSlide 11:Grocery Retail Industry
Slide 12:Operational Definition
Grocery Industry: “This industry comprises establishments generally known as supermarkets and grocery stores primarily engaged in retailing a general line of food, such as canned and frozen foods; fresh fruits and vegetables; and fresh and prepared meats, fish, and poultry.” Adapted from U.S. Census Bureau, Current Business Reports, Series BR/02-A, Annual Benchmark Report
Slide 13:Grocery stores employ in excess of three million employees (Budd and McCall , 2001).
Slide 14:“The consumer makes an average of 2.2 visits to the supermarket weekly, including 1.7 visits to the ‘primary store’” (Seth, 1999)
Slide 15:Grocery Retail Industry 2002 Annual Sales $442,971,000,000 second only to Auto sales in U.S. retail economy (U.S. Census Bureau)
Self-serve Check-out: A grocery retail experience in which the customer collects, scans, bags, and pays for their own purchases independent from grocery retail employees. Operational DefinitionSlide 17:Groceries: Self-serve Checkout
Perceived Advantage (Customer Gratification): Eliminate waiting in line Convenience Privacy
Four Self-serve checkout lanes cost $80,000 to install, require one store employee to oversee and pay for themselves in 12-18 months 1 billion self-serve transactions at grocery and other retailers in 2002, double 2001Slide 18:1 billion transactions: Austin American Statesman, Shonda Novak, June 8, 2003.1 billion transactions: Austin American Statesman, Shonda Novak, June 8, 2003.
1967 1st ATM London 1st ATM US New York 1973 1973 UPC adopted 1974 1st Scanned item (wrigley’s gum) 1951 Express Dairy self-serve, London 1984 1st self-serve checkout (Publix Supermarket, Atlanta) 1993 Portable Personal Shopper (Holland) 2002 29% of Grocery retailers offer self serve checkoutSlide 20:Benefit (gratification) for Retailer
Slide 21:This industry is an “intensely competitive, low margin, high-volume industry.” (Keh, 1998).
“Nationwide a person has to spend $15 on a transaction ‘for the retailer to break even’ when a cashier is involved … in California that break even is closer to $25 per transaction.”Slide 22:According to Greg Buzak of IHL Consulting Group. Quoted in LA Times article, “Self-serve trend, new technologies worry unions” November 26, 2003 These machines will ultimately save between 80 and 120 labor hours each week. Refer Article “B”According to Greg Buzak of IHL Consulting Group. Quoted in LA Times article, “Self-serve trend, new technologies worry unions” November 26, 2003 These machines will ultimately save between 80 and 120 labor hours each week. Refer Article “B”
Slide 23:Lower wages Lower shrinkage Increased inventory management
Profit Profit Profit “Self Serve machines never call in sick … you don’t have to worry about scheduling issues. You don’t have to worry about vacations.” Greg Buzek, IHL Consulting Group Refer Article “A”“Self Serve machines never call in sick … you don’t have to worry about scheduling issues. You don’t have to worry about vacations.” Greg Buzek, IHL Consulting Group Refer Article “A”
Slide 25:What would convince you to do the work others normally would do and receive no pay or discount incentive?
Slide 26:The Future in Grocery Retailing
Adoption rate of self-serve checkout % of grocery retailers with systems installed Percent Year 1984 20 30 40 50 60 70 80 90 100 1985 1990 1999 2002 2005 10 Projected Current IntroducedSlide 27:Technology Review Highlights 2003, Food Marketing Institute. Columbia Dispatch March 15m 2003 place percentage in supermarkets nationwide not retailers, Phil Porter.Technology Review Highlights 2003, Food Marketing Institute. Columbia Dispatch March 15m 2003 place percentage in supermarkets nationwide not retailers, Phil Porter.
Slide 28:Rfid Radio Frequency Identification
Walmart pushing this for 2005 with top 100 suppliers. One analyst “Walmart could save 8.35 billion a year with Rfid. Rfid is like Barcose on steroids. Each package can have a unique EPC embedded in a very tiny microchip, complete with radio transmitter (Article “F”) Privacy is main brake!Walmart pushing this for 2005 with top 100 suppliers. One analyst “Walmart could save 8.35 billion a year with Rfid. Rfid is like Barcose on steroids. Each package can have a unique EPC embedded in a very tiny microchip, complete with radio transmitter (Article “F”) Privacy is main brake!
Slide 29:Biometrics
“Scientists and engineers had accelerated research and invention to an unbelievable pace, conjuring up machines capable of taking over more and more human roles.”Slide 30:Inventing ourselves out of a job, Amy Bix, page 5.Inventing ourselves out of a job, Amy Bix, page 5.
