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!!!

Boomerang

I came across this interesting article in Store Front Back Talk magazine talking about the phenomenon occuring as retailers are moving towards a coordinated selling across multiple channels. The transition is not complete and the results are far from what the article refers to as "utopian" world of multichannel retail where a store manager can look up articles browsed by customers from in-store kiosks to determine what to order. Many retailers are using emerging channels to drive customers to in store purchasing. Example are cited of Wal Mart sending out alerts of instore items available over text messaging or an upcoming store in Madison allowing customers to read user reviews of product through a bar code scan. So where does the boomerang come from...well what is boomeranging is the movement of customer first from online to get information on products, promotions etc then to the store to try out products and again to check its user ratings back online. Now why exactly is this happening? could be multiple reasons - one of them being retailers still havent figured the right IT architecture to synch up the multiple channels at play. But is IT the only challenge here? there could be more - one of which is cited by the article as - "Such true merged channel data exchange would also require political changes, with senior management ordering that walls between channel business units be either brought down or at least made ultra-porous." In an environment like retail where distinct departments like merchandising, store ops, ecommerce, logistics, marketing have to work together change management effort and its successful implementation is critical for multi-channel success. Till that time customers will keep boomeranging!!!!
On a very separate and a very conventional note, the article states that "studies show that 25-30 percent of footwear customers leave the store as the sales associate goes to the back room to retrieve the specific size footwear for the customer." Something as simple as a handheld with software functionality to check back room stock and create a task to have the desired item retrieved from the shelf by alerting a runner could work as the store associate continues to engage the customer. Even in the emergining world of cutting edge retail technology good'ole scan gun and a personable associate can go a long way.

Check this out ...fast

I promise this one is going to be my last post that involves Whole Foods for sometime to come. I came across this article in NYTIMES a few months back and couldnt help but recollect my grad school queuing theory class. This was such a simple application of that which I have never seen in a grocery store here in Atlanta. The challenge however is how do you manage the perception of the customers when they see a longer queue. It is not intuitive directly that longer doesnt mean slower. Infact having a common line means the next open counter is available to you and you dont get stuck because someone has loaded a pile in his cart ahead of you. In queuing theory lingo M/M/n queue is faster than n M/M/1 queues!!!!

Tote-al Visibility

I have been a regular shopper at Whole Foods for a few years now. And I have seen the crowds grow bigger with each passing season. The organic foods category has been getting more and more consumers which has contributed to increased sales for retailers like Whole Foods. But is that all that makes them successful? There are several examples of smart retailing practices that Whole Foods uses but I would like to share one that I had an experience of. Now we all know that Whole Foods has been quite active in promoting and using environmentally friendly things in their stores. One of them is a cardboard tote that I purchased at the local Whole Foods (formerly known as Harry's Farmer's Market) few months back (image below)

The reasons I bought them was carrying the paper bags was a hassle, plus the contents of the bags spilled over in my car trunk. The cardboard box was easy to handle, sturdy and had sufficent space for my weekly grocery. So why I am telling all this???? Well it all began with a conversation I had with a co-worker. I was telling them how Whole Foods is building and preserving its brand through the example of the cardboard tote by citing the following

1. Addressing the environment friendliness by providing means to avoid plastic
2. Giving it a more personalized feel to grocery shopping as compared to baggers quickly stuffing your buys into translucent plastic bags
3. Cost savings for customer in the form of a 25 cent refund everytime you used the tote. The tote box cost me $1.5 which I recovered in a month and a half through weekly trips.

And my co-worker responded saying .."and add to that the additional customer service you get!!!" And I thought aloud "Customer Service???" and then it struck me, as I carried the tote through all the aisles, I was a walking sign board to every store associate that I am a repeat customer and needs to be given attention. Now isnt that how you sustain profitability in retail ...through repeat customers and making sure they are given the best service!!!