New Technology to Streamline Checkout in the Food Retail Sector - Case Study Example

AN EVALUATION OF NEW TECHNOLOGY TRENDS TO STREAMLINE CHECKOUT IN THE FOOD RETAIL SECTOR Executive Summary Retail industry is one of the most important and largest industries in globally. The evolution in this industry has been facilitated by improved supply chain management. However, retail stores continue to experience numerous inefficiencies and this have caused further technological innovations to streamline their checkout systems. Technological innovations target to ensure increased security of cardholders at the checkout and to improve the back office processes of the retailer. The other innovation in the retail industry is the use of mobile shopping through use of technologies such as MyGROCER business. The emerging technologies will cut down the time taken to process transactions and ensure better customer service. Introduction The retail industry is one of the most crucial and biggest industries in the marketplace. In UK, the retail sector stands for more than seven percent of the total value-added goods sold and has employed over 2.6 million or about 10 percent of the working group (SCB Partners, 2011, p. 5). In US, retail industry contributes to 9.2 % of the GDP and created jobs for 17.4 percent of the total workers. The grocery and food sectors are the main sectors in the industry and it accounted 173.42 billion Euros in 2010 that represented 52.7% of the total revenue from the retail sector in UK. This sector is projected to continue growing at 3.9% annually. In 2010, UK had 91,509 food stores out of which 7970 are grouped as hypermarkets, superstores and supermarkets (Kourouthanassis et al., 2002, p. 265).Tesco, one of the major retail companies in UK is the largest private employer and was ranked as the twelfth sole contributor to the GDP in 2006 (SCB Partners, 2011, p. 5). The growth in the retail sector has been facilitated by technological innovations and effective supply chain management. However, the industry continues to pursue technological innovations with the goal of enhanced customer service by reducing time taken to process transactions and bringing products closer to customers (SCB Partners, 2011, p. 5). Technological innovations are also coming up to help retailers streamline payments and assure the security of credit cards. Technological innovations in the industry also target to enhance efficiency in the back office operations of the firms. The technological innovations in the retail industry to be discussed in the paper include a technology to encrypt card information at the point of sale, the use of mobile devices in retail shopping and the use of NCR software. Moreover, the use of radio frequency identification in the retail industry will be explored (Bird, 2012). Cash Processing Technologies There has been a move by retailers to adopt technological innovations that enable them enhance the security of their customer’s credit card and streamline their back office activities as a way of improving efficiency and customer service (Bird, 2012). Most of the retailers are adopting technologies that help encrypt the information gathered from the credit card once it is swiped at the point of sale. One of the technological products is the VeriShield Protect developed by Lenexa-based Balance Innovations LLC, allows encryption of credit card information up to the point of processing a transaction. Ball Stores adopted VeriShield Protect and this has helped to streamline processing of transactions (Chilson, 2012). This technology has the benefit of assuring customers that the security of their information is maintained and the cash processing becomes easier thereby saving on the time taken to process each transaction. By cutting on time taken in processing transactions, a retailer is able to reduce queues in its stores and therefore become more attractive to customers (Chilson, 2012). The other technology adopted by retailers to enhance the way they process transactions is by use of electronic systems to process checks. For instance, the vbEPIX electronic system developed by Lenexa-based Balance Innovations LLC allows retailers to scan cheques in the store and their delivery for payment (Chilson, 2012). Consequently, the technology helps cut down the trips made to the bank thereby reducing the expenses incurred. In addition, through the use vbEPIX system, the manual activities conducted in depositing cheques are eliminated thereby streamline the process of processing transactions (Chilson, 2012). This technology is particularly critical to retailers that handle paper checks. Electronic scanning and processing of cheques help cut down the cost of handling cheques by more than eight percent and increase efficiency at the store. Particularly, vbEPIX was specifically developed for the retail industry. In addition to cutting down on costs, electronic cheque processing helps retailers identify bad cheques with a day and therefore the firm can take the necessary action fast (Chilson, 2012). Radio Frequency Identification Technology The other technological innovation that promises to streamline the operations of retailers is the radio frequency identification (RFID) technology. The technology that involves use of microchips that may be decoded through use of radio waves from a distance and it replaces the traditional barcodes (Birchall, 2010). Wal-Mart took the initiative of investing in RFID and the firm requires all suppliers to implement RFID. Adoption of RFID has been slower than anticipated due to cost and technical issues. However, the biggest suppliers to Wal-Mart must ensure that they attach RFID tags on all pallets delivered to the distribution centers (Birchall, 2010). The analysts in the retail industry forecast that Wal-Mart will be able to get annual cost savings of more than $ 400 million annual for every pallet and this is projected to increase when individual products become tagged with RFID. RFID will eliminate cases of out of stock products, as the technology will enhance inventory control (Birchall, 2010). This technology will also enhance the process of processing transactions thereby reducing the time taken in queues. The disadvantages of this technology are the high cost of implementation and technical issues in its adoption. MyGROCER technology MyGROCER is a new information system that targets at making use of the opportunities that came with wireless technologies for instance WLAN and Bluetooth and automated product identification systems (Kourouthanassis et al., 2002, p. 266). The goal of MyGROCER technology is to foster better business to customer electronic services through intelligent mobile devices. The system allows for full interactivity, automation and personalization of home replenishment activities. The functioning of MyGROCER system is summed up under the in-store scenario, on-move scenario and smart home scenario (Kourouthanassis et al., 2002, p. 266). Under the in-store scenario, an innovative wireless networks are adopted inside the retail store to provide MyGROCER services to the customers. Once a customer enters the retail store and logs into the MyGROCER via the cart, the system recognizes the user and shows the shopping list on the shopping cart screen (Kourouthanassis et al., 2002, p. 265). As the customers select items from shelves, the reader on the shopping cart reads and retrieves all the information about the product and posts the shopping list to the servers of the retailer. The shopping cart also displays information about on-going promotions based on the customers purchasing behavior. As the customer gets to the checkout counter, the products are not scanned but the cart notifies the cashier of total charge and once the customer makes payment, a receipt is issued (Kourouthanassis et al., 2002, p. 266). The systems increases efficiency reduces overheads and helps in inventory management. In the smart-home scenario of MyGROCER, key locations used at home to store products are networked using RFID microchips. A customer who intends to maintain track on use of products places them in the locations that have RFID microchips. Once the product is removed from the location and it is not replaced within a specific time, a signal is sent via the internet to MyGROCER (Kourouthanassis et al., 2002, p. 268). The customer can later retrieve a shopping list through the mobile phone and do shopping electronically or use this information when shopping using a cart as a reminder. Under the on-the-move scenario, customers get access to shopping lists that have been generated automatic through use of personal device assistance and mobile phones. The customer can modify the shopping list and then submit the list for home delivery (Kourouthanassis et al., 2002, p. 268). MyGROCER on the move scenario also notifies customers about products that run out of stock and recommend some products based on the purchasing trends (Kourouthanassis et al., 2002, p. 268). Conclusion There has been technological advancement that target to streamline the checkout process in retail stores. These technological innovations come in form of new software develop to facilitate processing of transactions and payments, enhancing the security of credit holders and streamlining the process of purchasing. These technological innovations cut down the time taken for every transaction thereby giving customers a better purchasing experience. In case customers see a long queue in the store, they tend to walk away thereby leading to lose of customers. However, with enhanced processing of transactions, firms are able to retain customers. One of these technologies is the VeriShield Protect system that is used to enhance the security of credit cards by encryption of data. VeriShield Protect also helps to process transactions and the point of sale thereby reducing the waiting time among customers. Retailers are also using the electronic cheque processing systems to reduce the time taken to manually authentic cheques. Another technology in the retail shopping is the radio frequency identification technology that is used replace barcode readers. MyGROCER technology is the other form innovation that has been developed to streamline checkout in the retail industry. MyGROCER technology will eliminate the need to do scan of all items at the checkout point. Bibliography Birchall, J. 2010, “Wal-Mart aims to cut supply chain costs”, Financial Times, January 3. Bird, J. 2012, “Streamlining checkout” Financial Time, June 1. Chilson, M. 2012, “Tech innovations become a point of sale for retailers” Kansas City Business Journal, March Kourouthanassis, P. and Giaglis, G., Doukidis, G. and Pergioudakis, V., 2002, “Improving the Retail Grocery Supply Chain through Mobile Shopping of Electronically Referenced Products”, 15th Bled Electronic Commerce Conference eReality: Constructing the eEconomy: Pp: 263-280. SCB Partners, 2011, “Retail markets today and tomorrow: In Ireland and the UK”, Bord Bia: 1-42. Read More