 |
A Smarter Smart Cart?
Written by Evan Schuman
February 16, 2005
With a craving for broiled salmon, Jane quickly sifted through her spice cabinet only to find that her bottle of dill weed was nearly empty.
With a few clicks on her Bluetooth-enabled PDA, she updated her Web shopping list with the dill, and a window opened onscreen suggesting a new salmon recipe. It looked good, so she approved the recipe and her shopping list was instantly updated with all of the necessary items, omitting those that her kitchen already had in stock.
Jane drove the half-mile to her local supermarket where she grabbed a smart cart, scanned her loyalty card and saw her updated shopping list appear in front of her. It had been categorized by aisle, and the cart directed Jane to each item. While she was checking for brown spots on broccoli heads in the produce aisle, her cart signaled the pharmacy to prepare a prescription refill and sent an order for lunch meats to the deli.
Everything that Jane just did will be available to select American consumers over the next few months, as their grocers deploy a new line of smart carts announced this week by Fujitsu.
Are these carts state-of-the-art and cutting edge for retail technology? It's a matter of perspective. Compared with the best European and Asian retail chains, American retailers are electronic laggards, especially in the grocery segment.
Even compared with U.S. retail technology discussions, these carts are merely deploying and productizing capabilities that have been publicly discussed for more than a year. But compared with what is actually being used—and even offered—with today's American grocery retailers, these Fujitsu carts are positively Jetsons.
Equipping an ordinary shopping cart with Fujitsu's new U-Scan Shopper unit will cost about $1,200. That price also includes about 60 infrared triggers to be strategically placed along various store shelves—sort of like Hansel and Gretel's fictional breadcrumbs—to help the cart find its path around the store. Fujitsu is hoping to sell 100 carts at each typical grocery store, according to Vernon Slack, Fujitsu's director of mobile solutions.
Fujitsu said the unit is involved in two large-scale grocery chain betas this spring, with general release targeted for the end of this year. Slack said one of the retail betas is a national chain with more than 2,000 stores and the other is a "more than 100-store" regional chain. He would not name the chains.
"The U-Scan Shopper is the ultimate customer touch point. It will significantly change the future of the retail front-end," Slack said. "It puts service and checkout in the consumer's hands, reducing the reliance on the point-of-sale for customer service and freeing store personnel to help customers in the aisles."
The display unit's browser-based application runs on Microsoft Windows CE .Net and integrates with major POS (point-of-sale) applications, Fujitsu said.
Slack points to more practical advantages of Fujitsu's design, such as their claim that their cart-handle-mounted unit (it's literally bolted on) is small enough to allow for a child to sit in the traditional front-compartment, while some rival units are too large.
The "just less than two-pound" unit with the 6.5-inch display is surrounded with a quarter-inch of hardened Mylar plastic making it almost indestructible, even by a curious child, Slack said. The units are also sealed with a polycarbonate cover.
Slack sees the fact that the cart would already have the unit bolted to its bar when the customer arrives as an advantage over smart-cart approaches where the customer has to pick up a pad at customer service or at the entrance and place it in the cart.
Another differentiator is that the Fujitsu version makes the customer's use of a loyalty card optional. Without the loyalty card, the system's CRM capabilities—a big draw for retailers—are virtually nil. In an initial deployment, Slack said, requiring a loyalty card will turn off more privacy-suspicious, time-crunched customers than it will attract.
With the U-Scan Shopper's approach, if the shopper chooses to remain anonymous, the cart will still display offers based on the customer's location in the store. At best, then, the retailer's data-collection would be aggregate, which is less useful than customer-specific CRM info but better than nothing.
The part of the smart cart experience that causes greater difficulties for retailers is the checkout. Consumers can scan items as they select them with the smart cart scanner, which communicates their selections to the cash register at checkout. For fraud/security purposes, how does the store ensure that the customer is honestly scanning every item? Some stores use spot checks, subjecting randomly selected shoppers to time-consuming basket audits.
Customers scanning their purchases into the U-Scan Shopper would have the option of simply going through the checkout aisle, with cashiers helping to bag the groceries while checking the items against the system's generated list of scanned items.
But Fujitsu recommends an integration of the smart cart approach with a store's existing self-checkout system, leveraging the cashier typically assigned to oversee such areas, as well as the weight check systems. This method would be faster than simply using the self-checkout because the system would accept the smart cart's list of what is in the cart. But for verification, it would do a single collective weigh, as opposed to the traditional self-checkout single-item weigh.
Slack said that Fujitsu engineers have come up with a proprietary weighing algorithm that gets more accurate the larger the number of items in the bag being weighed. That's the opposite of the normal variance approach, which holds that a range of weight deviations will exist for every product and—in theory—such variations would grow as the number of items grew. Slack said he couldn't explain how Fujitsu has overcome that issue.
Fujitsu developed the U-Scan Shopper through a strategic alliance announced in 2004 with Salt Lake City-based Klever Marketing Inc., under which Fujitsu acquired Klever's non-U.S. patents, its software and certain rights in other related intellectual property for the U-Scan Shopper. The companies said that they will jointly market the product within the U.S., and Fujitsu will market the product outside the U.S. Klever will develop and manage the wireless, in-store advertising campaigns for retailers using the system.
"Each marketing message reaches an individual consumer at the exact product location where industry research indicates more than 70 percent of all purchase decisions are made," Klever Marketing President and COO Bill Dupre said in a statement. "Klever Marketing believes that the one-to-one electronic communication capabilities of the U-Scan Shopper, its point-of-selection delivery and its patent portfolio provide a formidable first-position in which to control the in-store marketing space."
The system's core functionality includes the context-sensitive ads, which tout products based on the part of the store the cart is in. It can also alert the customers to any relevant specials. If the customer has a particular soup brand on their shopping list, it can flash an alert—just as the customer is about to enter the soup aisle—that a competing brand is $2 off today-only and then run a short commercial about that brand.
The CRM component of the system takes advantages of the system's timestamps that coordinate with those 60 or so infrared devices. It understands—in theory—whether the cart is zipping through aisle nine on the way to aisle 12 or if the timestamps indicate that it is slowly looking at products or has fully stopped in front of dog food.
The U-Scan Shopper has a menu option that does nothing other than list store specials for that day, along with a menu listing tons of recipes, which all have the ability to automatically amend the shopping list.
The system's ability to know where items are located is based partly on the store-provided map, but it also "learns" when items have been moved by noting the collective behavior of customers. For example, if the system thinks that shampoo is in aisle 10, but suddenly notes that 28 customers this morning have scanned shampoo in the middle of aisle 8, it will update its internal map.
But what the Fujitsu system does next is based on the retailer's customization. Those product relocations are sometimes not what the store's general manager wanted. The system can send a message to store management when it detects an unexpected relocation. "Some retailers want to be alerted or they may want it to just dynamically change the map" and not message them, Slack said.
Fujitsu officials say the next upgrade of U-Scan Shopper will likely include integration with chain-wide store inventories, so that the cart and/or the Web site can alert a customer that their favorite store is out of two items on the customer's list but that those items are available at another store in the chain, five miles away.
|
|
 |
Advertisement 
 
|
Evan Schuman is the former retail technology editor for eWEEK.com, PCMagazine, CIOInsight and retail reporter for RISNews and Consumer Goods Technology. Having covered IT issues for 21 years - and other stuff like legal affairs, politics, Wall Street and the environment for about eight years before that - Schuman is in a good position to gripe about technology trends and sometimes accidentally make a good point.
|
|
|
 |
Over the last month, I've been struck by an unusually large number of reader E-mails that fundamentally question whether E-Commerce will ever truly work: Whether it will consistently make money, be profitable and be, well, worth all of the effort.
If the slip of a lip can sink a ship, perhaps a retailer's flick of the click can kill a prestigious campaign mighty quick. The best way for a retail chain to make a customer happy is to offer him/her a program that few others can get. And the best way to undermine that—as Best Buy discovered on Wed. (Sept. 3)—is to then accidentally make that offer to every single reward customer you have.
It looks like Amazon is no longer backing up its pricing, putting an end to its Post-Order Price Guarantee — a policy that allowed customers to recover the difference from an Amazon price drop within 30 days of a purchase. As of Monday (Sept. 1), customers who place orders on Amazon.com are not offered the 30-day guarantee, a customer service representative confirmed.
Security is nothing if not filled with seeming contradictions, and the latest version of PCI—slated to be officially unveiled next month (October)—is highlighting a beauty: To most effectively protect payment-card-related systems, protection must be focused on anything that is not related to payment card data.
Quite a few retailers have been involved in site changes to make the Web more accessible to those with vision difficulties, but Target has been the most aggressive in fighting such efforts. As such, Target's settlement has an especially strong chance of pressuring retailers to aggressively embrace such changes.
Wal-Mart on Wednesday (Sept. 3) launched what it dubbed the Walmart Smart Network—a series of next-generation digital-ad systems—to 2,700 stores. The funky aspect of this rollout is that all 27,000 screens will be centrally controlled via an Internet Protocol Television connection.
Site navigation problems and unpleasant booking engines are driving customers away from online travel sites and pushing them through the doors of traditional, more personable travel agencies. Even though sales for online travel sites are growing, fewer travelers are actually booking their trips online.
A TJX senior executive is apparently trying to push chip-and-PIN, arguing that cyberthieves are focused on the United States partly because we haven't adopted it. "Criminals, I believe, are focusing on the countries that haven't added that higher level of security," TJX Vice Chairman Donald G. Campbell said.
Calvin Klein finally gave its HTML blessing to E-Commerce, offering its first for-sale items on its Web site, although the E-Commerce launch is U.S.-only. Anyone visiting from outside the United States will be routed to the existing corporate brochure site.
It seems clear that most retailers are adopting one of two distinctly different strategies when it comes to data security and compliance. Let's label them Cost-Effective Compliance (CEC) and Compliance-Driven Security (CDS). Both approaches are based on best practices and solid risk management principles. But, GuestView Columnist David Taylor argues, they lead to quite different spending patterns, technology decisions and business cultures.
A retail IT lesson from the world of politics? Maybe. Web tracking firm Keynote was studied the text message blast sent by the U.S. presidential campaign of Barack Obama, the one in which his campaign promised to tell supporters his VP selection before it was broadly announced.
Has Amazon decided what it wants to be when it grows up? More to the point, are there indications that it has now decided that one thing it does not want to be is yet another thin-margined retailer?
The IT chief at Netflix has pointed the finger of blame for its site problems last month at "a database corruption event in our shipping system." The problem prevented customers from receiving their DVDs for about three days.
Almost a year after TJX settled with banks and bank associations impacted by the worst data breach in credit card history, another bank has come forward with its own lawsuit against the retailer, claiming the incident compromised some 4,000 of its customer accounts.
The number of data breaches reported as of Aug. 22 of this year has already surpassed the total number in all of 2007, including a new one from Macy's impacting some 4,100 customers.
On the best-paid list of CIOs at publicly held companies, Best Buy's Bob Willett ($4.7 million), Home Depot's Bob DeRodes ($4.3 million) and Kohl's Thomas Kingsbury ($2.5 million) stand at the top, doing the pocket-protector crowd proud.
With the frequent product changes executed by any large e-tailer's site, the tech hurdles of launching a mirror site in another language can be daunting. But this challenge has created a small industry of companies that are trying to facilitate rapid globalization for e-tailers.
JCPenney is testing the Australian waters a bit with an online push. The retailer has a local URL and an Australian company handling all operations, but it's still shipping merchandise from the States and asking Australian shoppers to wait "12 to 14 working days. This "request" prompted one Australian publication to ask "whether Australians would be prepared to wait two weeks to receive something purchased online."
In an overall down market where the 150-store Nordstrom chain is seeing a 4.3 percent sales drop, online operations are accounting for 15 percent, hitting almost 8 percent of all sales. Company execs there now project online to soon top 10 percent.
The new version of PCI due out in October will let the outdated WEP wireless security standard stick around for almost two more years, while also reducing the required frequency of firewall rule reviews.
It's late on a Friday night and as Jane Smith walks into her local grocery frozen food aisle, she notices a neighbor walking away carrying a frozen pizza, right near a digital advertisement for 20 percent off of a Budweiser six-pack. Jane reaches into the freezer to grab her favorite Häagen-Dazs vanilla ice cream but notices that the digital ad instantly changes to hawk 40 percent off fresh apple pie in the bakery section.
It's generally accepted that any key economic issue—whether it's a housing slump, rising gas prices or tax refund checks—can have a sharp impact on business spending. But the IHL Group is floating an interesting theory that recent gas price hikes are going to have a very specific and direct impact on IT spending next year.
After years of trials with only the rarest evidence of CFO-friendly RFID ROI, shelf stock monitoring is quickly emerging as "the first major application of RFID in retail with a strong business case," according to a new report from London-based RFID analyst firm IDTechEx.
While North American retail execs are planning for trivial—if any—IT investment increases this year, with "more than one-quarter of retailers expecting lower IT spending," more than half of their Asian Pacific counterparts are preparing for significantly higher IT spending, according to new Forrester numbers released this week. A bit of the Tortoise and the Hare perhaps?
A gang of data thieves in Ireland has well learned the lesson that the best place to hide is in plain sight. The group hit a large number of retailers throughout Ireland and grabbed more than 20,000 payment cards by placing skimmers on card-swipes by wearing what appeared to be maintenance uniforms and saying that they were performing bank repairs.
These days, when U.S. government officials want to ask questions about privacy and data security, it's never clear if they want to protect consumers' privacy or learn the best way to violate it themselves. But retail execs who want hints can drop by a Sept. 22 hearing at the U.S. Federal Trade Commission's Washington, D.C., headquarters.
Retailers who are worried about RFID security problems will have more details available to them now that a federal judge has killed a gag order on MIT students who had identified flaws in Boston's contactless RFID subway cards.
Based on the PCI Standards Committee's official hints about what will be in the 1.2 release, it appears that clarifying when and how virtualized servers can be PCI compliant didn't make the cut. But before the server and security geeks start lighting their torches and getting all "vigilante" on the card brands, let GuestView Columnist David Taylor make his case for why it won't matter in the slightest.
As major chains are doubling up their focus on computer-savvy young consumers, some are finding their aversion to avatars giving in to their adoration of avarice.
A "persistent and mysterious technical glitch" has severely disrupted business operations at the massive online film rental site Netflix, "potentially affecting millions of its customers."
