October 14, 2005
New Generation of Self-Service in Giant’s New Concept Store
By George Anderson
The supermarket industry became a powerhouse in American retailing through the concept of self-service. Now, Giant Foods is taking self-service into the future with a new concept
store in Camp Hill, Pa.
“Today’s competitive grocery retail environment has driven retailers to utilize technology as a key customer service advantage for their shoppers. Giant understands that
their customers lead busy lives and they want to make it easier and more convenient to shop in their stores,” said Bob Bailey, executive vice president, Agilysys, which worked
with the supermarket chain to create an “interactive grocery shopping experience” for its shoppers.
Tony Schiano, president and CEO, Giant Food Stores said the technology employed in the 91,200 square-foot concept store goes beyond common applications such as self-checkout
and standalone kiosks.
Among the tools being used in the store to help bring convenience to the shopping experience are hand-held scanners integrated with the store’s POS and self-checkouts and multipurpose
kiosks with 23 self-service applications.
The kiosks are intended to assist shoppers to complete many in-store tasks, such as pre-ordering from the bakery, deli or pharmacy simply by touching a screen. Shoppers can also
receive personalized offers and coupons based on their shopping history.
Moderator’s Comment: Will going to a more self-serve model make supermarkets more competitive with other channels? What do you expect will be the reaction
of consumers to this new automated self-serve store environment? –
George Anderson – Moderator
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I will disagree with Camille. I think consumers do like grocery shopping. That is one reason why internet grocery shopping has been a bust for most companies. It would seem to me that Giant has no faith in their employees to assist customers and therefore they believe that self service is a more pleasurable experience to their customers. Wegmans is going to take them to the woodshed after they get a few more stores open on top of Giant. Ahold is a giant inefficient bureaucracy where decisions must funnel through consultants, committees, regional offices, and then overseas — then back again. The self-service model might do well when put in the hands of skilled, proven grocers. In about 3 years, we will know whether or not Ahold-Giant made the right decision.
The more companies try to automate everything, the stronger the pull will be for customers to shop at home via the net. As crazy as it may sound, even the boring and methodical supermarket shopping trip still is a great inter-reactor for shoppers. Take away the interaction and there really is no need to shop in the store.
Some kiosk solutions are more than just a convenience.
How do you sell a product to a shopper that they don’t know how to prepare or are unfamiliar with? Does lowering the price of a kiwi sell more kiwis to a shopper that doesn’t know what to do with it?
With 40,000 items on the shelf and a shopper that regularly uses about 150 items; the real challenge for retailers and manufacturers is to assist shoppers in learning how to use new products within a meal solution, or how to use familiar products in new ways. That builds the category and sales.
The Meat, Seafood and Produce Recipe Solution Center featured in the new Giant Camp Hill pilot and Bloom stores mentioned above brings real value to the retailer and consumer. That’s why they were installed. It isn’t because they are “technology.” Technology doesn’t sell anything. It is simply a tool. It’s the content and the presentation of that content that brings value and increases sales.
The Produce Manufacturers Association found that informed produce shoppers purchase 31% more and spend an additional $111 per year. The National Pork Board found meat sales gains of 3% – 5% by attaching a simple stick-on recipe to a package. We found 67% of shoppers purchase one or more ingredients listed in recipes printed from our kiosks.
Solution based selling is easier and less costly than most other types of customer service. When great content and innovation are combined with technology that can deliver a solution shoppers are looking for, it isn’t considered technology anymore. It’s called merchandising!
It’s time to quit thinking computers are technology. Computers are tools. The money is in delivering solutions. That is what a food store is all about isn’t it? Filling the stomach and pleasing families with the “tools” to make a great meal.
Technology is fine and, as discussed, when coupled with real customer service, can be a significant add-on. However, once again we have a sick and tired format (traditional supermarkets) like moderate department stores that is treating a very slight symptom and not the big problem. It is almost always about the merchandise… because, after all, that is what people are putting their hard earned money out for. Quite simply, a store built around “slotting fees” and that is a cookie cutter, copy cat version of every other supermarket is looking at the future with their eyes closed. When and if they become “merchants” and buy items on merit and buy items that are interesting, exciting and that provide value, they will have an authentic chance at a promising future.
Decades ago, Giant won major market share away from Safeway – and shifted the balance of supermarket power – in Balt/Wash when they installed scanning and quit putting price stickers on each item. (In one swell foop!) Research showed that public outcry was going to be intense – until, that is, Giant hit on the idea of explaining that they saved money by not pricing each individual item and that they’d PASS THE SAVINGS ALONG TO THEIR CUSTOMERS.
Get it? It’s WIIFM (What’s In It For Me?) at its most basic level, and Giant used it masterfully lo, those many years ago. They successfully connected the removal of price tags to savings for customers. Brilliant.
But does anybody remember? Is there anyone currently at Giant who can pass this wisdom along to the current regime? What’s in it for the customer, who is now expected to view added self-service (i.e., less store service and help) as a benefit?
And by the way, Camille, David Livingston is absolutely correct. Consumers DO like grocery shopping. If questioned properly – as I’ve been doing for various chains and wholesalers for nearly forty years – that’s what you’ll find.
I don’t get it.
I like technology stuff, and so do most of us who write, observe, consult, pontificate, and execute in the retail world. But consumers don’t seem to cooperate all that much.
Kiosks have been tried a dozen times or more, for a whole range of purposes, and they have never been a runaway success.
Albertsons put hand scanners in at least two groups of stores in the past two years. Food Lion’s Bloom did so as well, and there have been several others. I have not yet seen anything to indicate that they have been an enormous success either. A core group of early adopters like them very much. Most people don’t seem to find them compelling.
Giant’s sister company, Stop & Shop, has extensively tested a much more robust device (the Shopping Body, a joint IBM/Cuesol product) that is much more compelling to me, but despite glowing comments about its success, the rollout has been delayed and downgraded. I still don’t know if that’s because of capital costs, consumer reaction, or simply inability to execute when there have been so many organizational issues that were more pressing.
My point is, I don’t see the metrics or studies being published anywhere to prove the case that this is a good or bad idea. Have I missed something? Absent hard facts, my impression so far is that retailers and vendors of technology love this stuff far more than the shoppers do.
Mark me down on the side that believes hi-tech options can IMPROVE the experience and that it shouldn’t be assumed installation of devices are a cop-out for poor human customer service. For example, I tend to do my stock-up trip on Sunday mornings at a very active ShopRite in New Jersey. The deli counter, especially during football season, is absolutely swamped, even with a staff of 10 to 15 manning the slicers. Although I prefer the human interaction, on these occasions I take advantage of a kiosk to place my order, which is usually ready for pick-up by the time I’m on the way to the checkouts. As Bernice is so fond of saying…’give me options.’
This technology could be the future in many industries but companies must be very careful not to mistake convenience for service. Pre-ordering from the bakery, deli, or pharmacy and scanning items while shopping certainly seem like a convenience most consumers would embrace, at least initially. It is yet to be determined if this concept will stick. If this technology has widespread acceptance, this could be a tempting reason for companies to cut the number of customer service employees. The best way to implement this technology is to combine it with human interaction. People will still need service. Customers will accept this technology and new way of shopping if the technology works correctly and proper level of service is provided.
It is interesting to note that the gas station/convenience store industry has eliminated customer service in favor of do-it-yourself and has been completely successful. In this case, it is a matter of convenience vs. necessity. People still need gas whether someone else pumps it or not. Are there any full-service gas stations still around?
Too few stores experiment with new technology. There’s much to be learned, and it helps to learn before the competition. I have a feeling that fairly simple technology might help more than the complicated stuff. For example, many people want to know the cumulative value of what they put into their cart as they shop, since they’re on a budget. It isn’t very hard or expensive to attach a cumulative scanner to a cart. For the past 5 years or more, on-line shelf price marking systems have been available. If they’re using the same files as the registers, price arguments at the checkout would be eliminated. Stores proud of their low prices could even display the competition’s price as part of the shelf marking display. Why not start with technology that’s been around for a while?
…and so the business sector continues its long, slow march toward transforming the customer into an uncompensated employee.
Oh, well. We probably do customer service better anyway.
A number of stores are experimenting with various kinds of technology to allow consumers to calculate purchases as they put things in their basket and to facilitate fast check-out. Consumers generally don’t like grocery shopping and, most of all, they hate waiting in line. IF the technology actually makes the shopping experience more pleasant and IF consumers actually can check-out quickly, then there will be a large number of consumers who will quickly gravitate toward these stores. However, not all consumers will feel comfortable with this model so changing over to this model without providing alternatives for consumers who don’t feel comfortable with it would be a mistake. In addition, if consumers encounter difficulties (wrong prices, not posting to the their credit cards accurately, the self-checkout machine encountering a problem), consumers will be frustrated and dislike the shopping experience even more! To provide the convenience, the system has to work VERY right the first time they use it!
I happen to live in Harrisburg and, in fact, shopped at the very store yesterday. I think the ambience and feel was superb (compared to the other Giant store I frequent near Linglestown). However, it took all of 3 store reps and a customer service rep a good 20 minutes to find a squeezed lemon bottle. It’s usually found in the grocery section but it was put in the side where and only a person 2 ft tall could have seen it. What’s the point of all the technology when your own customer reps don’t know where the products are? All the story behind self-service is meant to get customers to think that they can complete their transactions faster if they were to do it themselves, whereas the driver is the store labor cost reduction and how much of it you can push to the customer. If you don’t believe me, ask the CEO of Target stores why they aren’t really interested in self checkout (where they should as they don’t have produce, usually a little more cumbersome than regular bar coded products). And of course Giant eagle has gone the distance even to provide barcode printing devices at the produce section so that it can be conveniently scanned at the register.
Consumers will react in both ways: some will feel enthusiastic about it and some will be terrorized by it. The retailer’s duty is to minimize the fear of the second type.
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I will disagree with Camille. I think consumers do like grocery shopping. That is one reason why internet grocery shopping has been a bust for most companies. It would seem to me that Giant has no faith in their employees to assist customers and therefore they believe that self service is a more pleasurable experience to their customers. Wegmans is going to take them to the woodshed after they get a few more stores open on top of Giant. Ahold is a giant inefficient bureaucracy where decisions must funnel through consultants, committees, regional offices, and then overseas — then back again. The self-service model might do well when put in the hands of skilled, proven grocers. In about 3 years, we will know whether or not Ahold-Giant made the right decision.
The more companies try to automate everything, the stronger the pull will be for customers to shop at home via the net. As crazy as it may sound, even the boring and methodical supermarket shopping trip still is a great inter-reactor for shoppers. Take away the interaction and there really is no need to shop in the store.
Some kiosk solutions are more than just a convenience.
How do you sell a product to a shopper that they don’t know how to prepare or are unfamiliar with? Does lowering the price of a kiwi sell more kiwis to a shopper that doesn’t know what to do with it?
With 40,000 items on the shelf and a shopper that regularly uses about 150 items; the real challenge for retailers and manufacturers is to assist shoppers in learning how to use new products within a meal solution, or how to use familiar products in new ways. That builds the category and sales.
The Meat, Seafood and Produce Recipe Solution Center featured in the new Giant Camp Hill pilot and Bloom stores mentioned above brings real value to the retailer and consumer. That’s why they were installed. It isn’t because they are “technology.” Technology doesn’t sell anything. It is simply a tool. It’s the content and the presentation of that content that brings value and increases sales.
The Produce Manufacturers Association found that informed produce shoppers purchase 31% more and spend an additional $111 per year. The National Pork Board found meat sales gains of 3% – 5% by attaching a simple stick-on recipe to a package. We found 67% of shoppers purchase one or more ingredients listed in recipes printed from our kiosks.
Solution based selling is easier and less costly than most other types of customer service. When great content and innovation are combined with technology that can deliver a solution shoppers are looking for, it isn’t considered technology anymore. It’s called merchandising!
It’s time to quit thinking computers are technology. Computers are tools. The money is in delivering solutions. That is what a food store is all about isn’t it? Filling the stomach and pleasing families with the “tools” to make a great meal.
Technology is fine and, as discussed, when coupled with real customer service, can be a significant add-on. However, once again we have a sick and tired format (traditional supermarkets) like moderate department stores that is treating a very slight symptom and not the big problem. It is almost always about the merchandise… because, after all, that is what people are putting their hard earned money out for. Quite simply, a store built around “slotting fees” and that is a cookie cutter, copy cat version of every other supermarket is looking at the future with their eyes closed. When and if they become “merchants” and buy items on merit and buy items that are interesting, exciting and that provide value, they will have an authentic chance at a promising future.
Decades ago, Giant won major market share away from Safeway – and shifted the balance of supermarket power – in Balt/Wash when they installed scanning and quit putting price stickers on each item. (In one swell foop!) Research showed that public outcry was going to be intense – until, that is, Giant hit on the idea of explaining that they saved money by not pricing each individual item and that they’d PASS THE SAVINGS ALONG TO THEIR CUSTOMERS.
Get it? It’s WIIFM (What’s In It For Me?) at its most basic level, and Giant used it masterfully lo, those many years ago. They successfully connected the removal of price tags to savings for customers. Brilliant.
But does anybody remember? Is there anyone currently at Giant who can pass this wisdom along to the current regime? What’s in it for the customer, who is now expected to view added self-service (i.e., less store service and help) as a benefit?
And by the way, Camille, David Livingston is absolutely correct. Consumers DO like grocery shopping. If questioned properly – as I’ve been doing for various chains and wholesalers for nearly forty years – that’s what you’ll find.
I don’t get it.
I like technology stuff, and so do most of us who write, observe, consult, pontificate, and execute in the retail world. But consumers don’t seem to cooperate all that much.
Kiosks have been tried a dozen times or more, for a whole range of purposes, and they have never been a runaway success.
Albertsons put hand scanners in at least two groups of stores in the past two years. Food Lion’s Bloom did so as well, and there have been several others. I have not yet seen anything to indicate that they have been an enormous success either. A core group of early adopters like them very much. Most people don’t seem to find them compelling.
Giant’s sister company, Stop & Shop, has extensively tested a much more robust device (the Shopping Body, a joint IBM/Cuesol product) that is much more compelling to me, but despite glowing comments about its success, the rollout has been delayed and downgraded. I still don’t know if that’s because of capital costs, consumer reaction, or simply inability to execute when there have been so many organizational issues that were more pressing.
My point is, I don’t see the metrics or studies being published anywhere to prove the case that this is a good or bad idea. Have I missed something? Absent hard facts, my impression so far is that retailers and vendors of technology love this stuff far more than the shoppers do.
Mark me down on the side that believes hi-tech options can IMPROVE the experience and that it shouldn’t be assumed installation of devices are a cop-out for poor human customer service. For example, I tend to do my stock-up trip on Sunday mornings at a very active ShopRite in New Jersey. The deli counter, especially during football season, is absolutely swamped, even with a staff of 10 to 15 manning the slicers. Although I prefer the human interaction, on these occasions I take advantage of a kiosk to place my order, which is usually ready for pick-up by the time I’m on the way to the checkouts. As Bernice is so fond of saying…’give me options.’
This technology could be the future in many industries but companies must be very careful not to mistake convenience for service. Pre-ordering from the bakery, deli, or pharmacy and scanning items while shopping certainly seem like a convenience most consumers would embrace, at least initially. It is yet to be determined if this concept will stick. If this technology has widespread acceptance, this could be a tempting reason for companies to cut the number of customer service employees. The best way to implement this technology is to combine it with human interaction. People will still need service. Customers will accept this technology and new way of shopping if the technology works correctly and proper level of service is provided.
It is interesting to note that the gas station/convenience store industry has eliminated customer service in favor of do-it-yourself and has been completely successful. In this case, it is a matter of convenience vs. necessity. People still need gas whether someone else pumps it or not. Are there any full-service gas stations still around?
Too few stores experiment with new technology. There’s much to be learned, and it helps to learn before the competition. I have a feeling that fairly simple technology might help more than the complicated stuff. For example, many people want to know the cumulative value of what they put into their cart as they shop, since they’re on a budget. It isn’t very hard or expensive to attach a cumulative scanner to a cart. For the past 5 years or more, on-line shelf price marking systems have been available. If they’re using the same files as the registers, price arguments at the checkout would be eliminated. Stores proud of their low prices could even display the competition’s price as part of the shelf marking display. Why not start with technology that’s been around for a while?
…and so the business sector continues its long, slow march toward transforming the customer into an uncompensated employee.
Oh, well. We probably do customer service better anyway.
A number of stores are experimenting with various kinds of technology to allow consumers to calculate purchases as they put things in their basket and to facilitate fast check-out. Consumers generally don’t like grocery shopping and, most of all, they hate waiting in line. IF the technology actually makes the shopping experience more pleasant and IF consumers actually can check-out quickly, then there will be a large number of consumers who will quickly gravitate toward these stores. However, not all consumers will feel comfortable with this model so changing over to this model without providing alternatives for consumers who don’t feel comfortable with it would be a mistake. In addition, if consumers encounter difficulties (wrong prices, not posting to the their credit cards accurately, the self-checkout machine encountering a problem), consumers will be frustrated and dislike the shopping experience even more! To provide the convenience, the system has to work VERY right the first time they use it!
I happen to live in Harrisburg and, in fact, shopped at the very store yesterday. I think the ambience and feel was superb (compared to the other Giant store I frequent near Linglestown). However, it took all of 3 store reps and a customer service rep a good 20 minutes to find a squeezed lemon bottle. It’s usually found in the grocery section but it was put in the side where and only a person 2 ft tall could have seen it. What’s the point of all the technology when your own customer reps don’t know where the products are? All the story behind self-service is meant to get customers to think that they can complete their transactions faster if they were to do it themselves, whereas the driver is the store labor cost reduction and how much of it you can push to the customer. If you don’t believe me, ask the CEO of Target stores why they aren’t really interested in self checkout (where they should as they don’t have produce, usually a little more cumbersome than regular bar coded products). And of course Giant eagle has gone the distance even to provide barcode printing devices at the produce section so that it can be conveniently scanned at the register.
Consumers will react in both ways: some will feel enthusiastic about it and some will be terrorized by it. The retailer’s duty is to minimize the fear of the second type.