Sunny Image

It not uncommon these days to see more and more retailers providing "green" options in their stores. With surging energy prices and surging importance that consumers are giving to how eco friendly are the stores they shop from, more and more retailers are jumping on to make more of their offerings "green". The not so new inclusion in this wave has been using more and more renewable energy in running the store. Installing solar panels is one such measure as reported by this recent article (subscription maybe required) in NY Times. Some very interesting points in the article are

• If Wal-Mart eventually covered the roofs of all its Sam’s Club and Wal-Mart locations with solar panels, figures from the company show that the resulting solar acreage would roughly equal the size of Manhattan, an island of 23 square miles - Wow that can change the look of suburbia...imagine all the stores with black tinted tops gleaming in sunlight. Jokes apart, I wonder how much %age of electricity consumption of the store can it actually take care of. Is this more of an image thing or there is a long run bottomline benefit involved.
• The current rush apparently is driven by a government deadline at the end of the year to get renewable energy tax credits. As stated by one of the people interview in the article - “Every project that starts development has to be finished by Dec. 31 or you lose tax equity advantage, and nobody’s willing to take that risk,” said George Waidelich, vice president for energy operations at Safeway. “You’re talking about millions of dollars.”
• One thing that comes across as a little contradictory is the rise in the price of solar panels with greater demand. This might indicate a lag in solar technology manufacturing ramp up.
• And finally a basic difference between us and our friends across the pool - "American retailers are following the lead of stores in Europe, which are much further along. Store-roof projects are so numerous in parts of Germany that they can be spotted in satellite photos. Government subsidies there, however, have lasted for years."

Check it out yourself

A month or so back I had put a post on how Whole Foods is using a different approach to minimize check out times in its Manhattan stores. What I had noticed about Whole Foods was that they did not have any self checkout aisles. To me self check out is a very convinient option as I am very conscious about how many bags I use to fill my groceries. Often baggers at full service aisle, double bag and dont optimize the number of bags they use. But what I have often noted is that often a lot of customers get stuck with a bad label or produce item without PLU etc. That always use to make me wonder what is the benefit of this system. A full service aisle will help you checkout faster with experienced clerks entering and scanning your ticket items. The only explanation I could come up was perhaps the labor savings offset the investment. Turns out that self checkouts (SCO) isnt perceived any longer as a technology that helps you save some dollars but more of a customer habit. A very interesting article by Retail System Research's Nikki Baird talks about her experience at a user conference on self check outs. Some very interesting observations made by Nikki are summarized below,

• "...many of their customers are already trained on using self-checkout, and so are coming to expect that SCO is part of the shopping experience – at least for groceries. To these retailers, SCO is a customer service play required to keep up with larger chain competitors. They view it as a customer service benefit, increasing the amount of choice a consumer has over how they go about buying their groceries"
• "Consumers expect all of the same services at SCO as at any other register ". This is cited through an example of cash back transactions on debit cards. This is very convinient for a consumer as he doesnt have to take the trouble of stopping by an ATM. A lot of retailers dont provide this facility at self-checkout thereby affecting the customer convinience
• "There needs to be enough space within the “pod” of self-checkout stations so that carts can maneuver – not less than seven feet and more like eight". This is an interesting observation and more important in a self checkout scenario since all the material handling is done by the customer. Now this reminds me of this neigbourhood grocery store who had their SCOs facing the entry/exit doors. Well you'd think that is convinient but during winter time I saw many a troubled customers as every time someone stepped into the store a cold breeze would sweep the SCO sending shivers through potentially loyal customers!!!

Virtually Real

A very interesting article by Ellen Brown was featured in Wall Street Journal on Kimberly Clark and other CPG companies investing in building virtual reality studios to test store display concepts and how consumers would respond to them. The idea is that rather than testing a concept in a store which takes longer time and is more costly, virtual reality prototypes can assist the manufacturers and retailers to gauge consumer responses. The article talks about a test where a customer is made to walk virtually in a store and pick up a pack of Huggies diapers. Now if the idea is to determine how easy it is to locate the product with the new display then probably this might work. Also it may give a good 3-D visualization for executives considering ideas. But what is not intuitive to me is how does this enable them to determine a consumer's choice. Now when we walk into a store, its an overload of stimulus in all forms - visual, audio, olfactory etc. Add to that group dynamics of a collection of people in a store. So just by having a sample consumer do a virtual reality walk through an isolated display and checking the eye movement would not be sufficient. There is no other display to attract the consumer's attention. There is no nagging baby on the cart diverting mommy towards the candy aisle. Human mind and its interaction with the surrounding is much more complex so I wonder how much a virtual reality gizmo will help.