What’s in store?

The future of traditional shopping looks set to change dramatically as supermarkets and shops embrace a raft of electronic payment, shelf location and individual goods tagging systems.

The British shopper is not known for embracing change. Indeed, one might assume that a revolution in payment procedures involving scanning, fingerprints and a whiff of a big brother society would send your average supermarket patron scurrying for his or her nearest farmers’ market. But while the use of biometrics in the UK is more commonly linked with the ongoing ID card furore, there is one place in the UK where it is being positively embraced by consumers. Three Co-op shops in Oxford have introduced technology by San Francisco biometrics company Pay by Touchsimilar to that used by US immigration, that allows shoppers to pay for their groceries using their fingerprints. Co-op Midlands has been trialling the system since March, and to join the scheme customers had to volunteer to have their fingerprints scanned and then register their debit, credit and loyalty cards on-line. So the next time they go shopping all they have to do is place a finger on a scanner at the checkout and the cost of the shopping is automatically deducted from their account. Technological change is certainly afoot in the retail market. But while Oxfordshire folk line up to get their fingerprints scanned it is the Germans who are ahead of the game. Future Store, on the outskirts of Rheinberg, is running an ambitious project that is jam-packed with all sorts of new technologies which may or may not make it into a supermarket near you soon. Opened in 2003 as an experimental store for Metro Group – which owns a variety of German supermarket chains as well as the department store Galeria Kaufhof – the shop itself is an exercise in retail futurology. Metro’s Antonia Voerste, Future Store’s technology project manager, said Metro opened it to test both what was technically feasible in a supermarket environment, and to see how customers would react to high levels of technology. So far, she claimed, the results have been extremely positive. As the third largest retailer in the world – Metro can perhaps afford to experiment with new retail technologies, and the indications are that customers have been embracing many of the innovations. One of the most popular technologies among customers has been the Personal Shopping Assistant (PSA), a touch-screen computer attached to a shopping trolley that provides up-to-the-minute information about special offers and products. This is loaded with software which, upon swiping the customer’s loyalty card, gives information that is targeted to be directly relevant according to what the customer has purchased in the past. IBMspecialises in this type of ‘data-mining’ and has been working closely with Metro and Future Store to develop these kinds of intelligent targeted marketing technologies. The PSA is attached to the shopping trolley and allows customers to scan in their own purchases, and then lists the products in the trolley and the current total price. At the till, they return their PSA back to the cashier where it accesses the merchandise management database via a wireless LAN and displays an up-to-date total which is then debited from your account. Scattered throughout Future store are terminals providing extra information about any product, including sell-by dates, origin and menu ideas. One interesting technology – also developed by IBM – known as the Everywhere Display, looks to put paid to the wasted minutes spent searching for a particular product on shelves. Currently limited to the wine and spirits department, the customer can find what they are looking for on the touch-screen information panel and then touch the ‘Show it to me on the shelf’ button. This triggers projectors embedded in the ceiling that beam light on to the floor to show where to find the goods on the shelf. While Future Store is using the technology as a simple directional tool, the system could have many further applications in the future, as IBM has been investigating using cameras and intelligent software to monitor the positioning of a shopper and display salient information depending on their location. ‘The Everywhere Display is a technology that allows people to interact with a patch of light, an augmented reality technology that does not require special goggles or equipment and so is ideally suited for a retail environment,’ said Voerste. ‘At the moment the display at Future Store is a simple projection but IBM has already installed a more advanced version in the Prada store in New York where customers can use the projected image as a touch screen.’ IBM has also developed so-called ‘Veggie Vision’ intelligent scales that combine digital cameras with sophisticated software to recognise the colour and shape of fruit and vegetables and print out the correct label. Voerste is confident that many of these technologies will make their way into non hi-tech supermarkets before long. ‘After you have tested the technologies and know they work well then you have to make the business case for them and bring them into normal stores,’ she said. Another technology that is being trialled at Future Store – electronic shelf labelling – is also being echoed here in the UK. Although on a smaller scale than the Future Store project, Tesco tests new technologies in its own version of a store of the future in Leicester where UK company ZBD has been trialling its dynamic electronic labelling system. ZBD’s chief scientific officer Cliff Jones said that in his firm’s work with Tesco, the goal was to automate processes in the delicatessen area of the supermarket, where a lot of food can get wasted when labels are manually changed. During a trial last December, ZBD trialled its epop (electronic point of purchase) technology, a small LCD screen that can be updated dynamically from either the back office or in the deli department itself. The system can be updated with information-rich content in any form, including graphics, nutritional values and price changes. The enabling technology for epop is Bounce, an RF antenna with complex software that allows images to be rendered and distributed across a large area. Although the LCD screen appears much like any other LCD display, there is a key innovation which makes the system possible. ‘It might look like a normal LCD, with a large screen and the RF hidden behind it but in this application using a conventional screen would mean the batteries would need to be changed every six weeks or so,’ said Jones. ZBD has developed LCD technology that saves the image on the screen so it does not have to update continuously like conventional displays, which use two flat glass plates sandwiched about five microns apart. In epop the surface of the glass is corrugated by one micron pitch which gives the display stability in either the black or white state. This means either state can be stable without a field needing to be applied. ‘In a normal LCD, the white state is stable and the field distorts to give the black. In epop we have a latch which will click to change the surface and to alter it from white to black so there is not a constant draw on the battery,’ said Jones. ‘It’s like deploying electronic paper, but one that can be quickly and accurately updated.’ According to Jones, in future Tesco hopes to use the technology in other areas of its stores, and epop is due to be rolled out at High Wycombe next month. However, all of these innovations could be in vain if the looming presence of internet shopping continues to eat away at market share. According to Sharon Hardiman of the British Retail Consortium, the internet will completely change the way we shop. Citing a recent study, partly commissioned by online payment company PayPal, she suggested that by 2010, UK consumers will be spending 18.5bn a year on the web that they would otherwise have spent on the high street? The research goes on to predict that by 2010, there will be nearly 25 million online shoppers in the UK. This means a rise of 10 million in the next five years. So, does this herald the end of shopping as we know it? Not according to Paul Stein, director of Roke Manor Research. His company, a subsidiary of Siemens, recently published its vision of the retail industry in the 21st century and it remains firmly rooted in traditional shopping habits, albeit with a twist. Stein believes that although internet shopping has risen in popularity, it will never replace the experience of shopping in person. ‘People enjoy the social side of shopping and seeing their products first hand,’ he said. ‘Although shopping on the web will be an important part of retail I doubt it will ever be dominant.’ The key difference for Stein, and the real dominating technology for the future of retail, is the exciting possibilities afforded by RFID technology. ‘We think it will have a massive impact,’ he said. ‘In this new retail environment every single item in the shop will be RFID-tagged. All products will be kept in reusable nylon containers embedded with an RFID tag. Unlike barcodes, where tins of beans in general have a code, every single tin of beans in the shop will have an individual tag.’ At Roke Manor, engineers have developed a very fast, high-capability portal reader that is said to be far faster than a conventional RFID handheld scanner. Not only do such portals add another dimension to the logistics side of the retail market, enabling pallets of goods to be tracked from manufacturing through to the till, but they also have possibilities for consumers. Stein envisages plastic shopping trolleys – to avoid interfering with the tags’ radio signals – that can be wheeled through a portal reader that automatically reads every tag in the trolley and deducts the total directly from your current account, perhaps via your mobile phone. Shoppers could then take their shopping home where RFID-reading refrigerators could ‘talk’ to all of the shopping items and list the fridge’s contents and sell-by dates on a display screen on the door. He even anticipates each RFID tag being fitted with a biological sensor that could monitor the freshness of the milk, for example. Once the items are finished with, the nylon container could be collected, cleaned and recycled. The generic containers could even be fitted with light-emitting polymer labels, such as those developed by Cambridge Display Technologies, and use software to update the label’s display depending on its contents, said Stein. ‘It is the glimmer of a possibility that there could one day be no packaging waste whatsoever,’ he said. In the past Roke Manor has also carried out some image analysis of the flow of shoppers around the store for a major UK supermarket chain, and Stein sees targeted marketing technologies as being an important factor in the future supermarket. One of these is ultrasonic directional sound systems. Audio Nation, which sells directional sound technology developed by The American Technology Corporation, has also been trialling its technology in UK supermarkets. Originally designed for use as a military psychological weapon, this technology creates narrow beams of sound that work like spotlights over an area 1-2m wide. The sound is created by an inaudible beam of ultrasound that is rendered audible as it passes through the air. Complex software is used to ‘reverse-engineer’ from the desired sound waves to determine the appropriate ultrasonic source signals. Audio Nation has been working closely with Sainsbury’s which ran full trials of the system at one of its Ipswich stores towards the end of last year. The trials comprised a digital screen installation linked with a directional speaker that flooded each aisle with product-specific information. According to Audio Nation’s director Mark Webster, each speaker was able to fill the aisle with sounds that correlated to the individual aisle. ‘Different aisles get different messages,’ said Webster. ‘This technology can then be used to create different effects, including subliminally creating an atmosphere. ‘For example, we can play the sounds of clinking of bottles and glasses in the wine and spirits section, but as soon as you move out of that aisle the sound stops. There are many applications.’ Each 1kg ultrasonic emitter is light enough to be fitted into false ceilings and is sufficiently powerful to flood an entire shopping aisle with a column of sound. This depends on the individual aisle as the soft edges of clothing can disperse the sound more quickly and so more emitters are needed. In Germany, the Future Store initiative is moving further afield. The Metro Group plans to present its findings on retail technology at an exhibition in Beijing in November, while here in the UK, jealously-guarded technology trials continue apace. While most major UK supermarkets have begun trials with RFID in particular – notably Marks and Spencerand Tesco – no retailer appears even close to reaching the ‘total solution’ stage as described by Stein. However, he believes that market forces will dictate that that time will soon come. ‘The retail sector is completely cut-throat and fractions of per cent in efficiency can have dramatic bearings on your market share and market position,’ he said. ‘Any technology that slightly enhances these things will be snapped up.’ Sidebar: Setting store by natural energy Supermarket technology is also set to extend beyond simply enhancing the shopping experience or improving efficiency. In July, environment secretary David Milliband hauled the bosses of the ‘big four’ supermarkets into a meeting and told them that they need to concentrate on making their stores more environmentally friendly. Milliband might have been encouraged by movements across the Atlantic where retail giant Wal-mart indulged in a spot of positive PR in November by opening the second of its experimental ‘green’ supermarkets in Denver. The goal for these stores was to dramatically reduce the natural resources required to build and run a supermarket and Wal-mart is conducting over 50 different experiments in environmentally-friendly technologies. These include solar and wind power, waste oil boilers and unique fabric duct air systems to heat and cool the building more efficiently. Following this example by its parent group, Asda is also now investigating a whole new range of technologies to make stores more efficient, and using more renewable energy. The chain has tentative plans to open a supermarket along similar lines as the Wal-mart store, with Bootle in Merseyside having been mooted as a possible location. Asda is looking at a range of energy-saving technologies, including wind turbines, ground source heat pumps and collecting rainwater. Sun pipes – which act like kaleidoscopes to bring natural light into buildings – are being investigated, while the store is also planning to install wind turbines at six of its distribution depots to make the depots completely energy sustainable. Sainsbury’s is already using wind turbines at its East Kilbride depot, Greenwich and Kingston stores and has installed Combined Heat and Power in five of its outlets, and solar panels in its Greenwich store petrol station, where it is also using an increased amount of natural light. Intriguingly, Asda also plans to rent solar panels and then sell the energy produced. It will then use this money to purchase cheaper, greener power. This would be the first such scheme of its kind, said a spokesperson for the chain.