Grocery stores adding tech features to stay competitive
September 15, 2013 4:00 AM
Cheryl A. Guerrero/Los Angeles Times
Ralphs grocery stores in Los Angeles have adopted the QueVision system, which uses infrared cameras to determine how many customers are in a store so managers can redeploy workers to the cash registers.
By Andrea Chang and Tiffany Hsu Los Angeles Times
Like many grocery shoppers, Michele Ricketts dreads long checkout lines.
But lately, she's been breezing by the cash register at her neighborhood Ralphs even with the usual crowds at the store.
To shave precious minutes off wait times, Ralphs has been installing technology to measure foot traffic in nearly all of its supermarkets.
Known as QueVision, the system uses hidden infrared cameras with body heat trackers to figure out how many customers are shopping at any given time. Managers use that information to redeploy workers to the cash registers when things get busy.
It's already paying off. QueVision has trimmed the average time it takes to get to the front of the line to roughly 30 seconds from the national average of four minutes, a Ralphs spokeswoman said.
The checkout system is part of a long-overdue effort by traditional grocery chains to evolve and stay competitive through the use of technology.
The $518 billion grocery store industry hasn't made a major leap forward since the bar code scanner was introduced in the 1970s.
"You have an industry that's been kind of stuck in time," said Scott Mushkin, a grocery retail analyst at Wolfe Research. "Grocers have to invest. Their business models have been under so much pressure, they're fighting for their lives."
Technologies that have recently made their way into supermarkets include digital signs that update prices and locations of products and offer promotions by time of day, such as coffee and granola bar specials for morning commuters. To speed up the checkout process, customers can pay via fingerprint scanners or use smartphone applications to scan bar codes themselves. A self-propelled "smart" shopping cart that can follow customers and lead them to items is being tested.
Grocery chains are finally spending the time and money to modernize because they are nervous about losing out to rivals. Big-box retailers such as Target are beefing up their grocery sections, and Amazon.com has been aggressively rolling out its Amazon Fresh same-day grocery delivery service.
Grocery industry revenue shrank an average of 0.4 percent in each of the past five years, according to research firm IBISWorld. Companies were hit hard by the recession as high unemployment and low disposable income forced consumers to cut back on premium products and rely instead on cheaper generic brands and discounts.
U.S. grocery stores are trailing behind their international counterparts when it comes to embracing tech. British grocery giant Tesco, a pioneer of supermarket innovation, has more than 5,000 technologists in its Bangalore, India, development center working on new ideas to improve the company's stores. At a conference in March, chief executive Philip Clarke said "a new wave of creativity has been unleashed."
In 2011, Tesco launched its futuristic Homeplus market at a Seoul, South Korea, subway stop. There's no food in this virtual grocery store, only interactive walls around the station that display photos of fruit, vegetables, milk and other grocery staples. Using their smartphones, commuters can buy these products by photographing QR codes printed on the images and paying through their phones. Tesco delivers the purchases to customers' homes the same day.
ASDA, another British grocery chain, recently introduced a checkout scanner tunnel. Consumers place their items on a conveyor belt, which whisks them through a 360-degree laser scanner. The tunnel reads the bar codes, which ASDA said is "so fast it can increase the speed of scanning your shopping by up to 300 percent." (Ralphs parent Kroger is experimenting with similar technology.)
Wal-Mart, the nation's largest grocery retailer, recently expanded its Scan & Go payment system to more than 200 stores. Customers use Wal-Mart's mobile app on their iPhones or Android devices to scan bar codes on products they plan to buy and pay by holding their phone to a self-checkout machine.