Canadian retailers are shopping for the future.
While dazzled consumers have traditionally been quick to buy new technological gadgets, store owners are now turning their attention to high-tech marvels that will ultimately transform the shopping experience.
In this new landscape, self-serve checkouts will get smarter, displays will point customers directly to the product they're looking for and downloading will no longer be limited to Internet websites. Instead, it will grow to include specialized machines able to sell you audio books, music, or pre-recorded DVDs should a store not have the item in question on its shelves.
This comes despite surging retail sales and profits. Across Canada, sales were up by average of 5.9 per cent as of October, excluding autos and gas, while retail profits hit a high of $8.8 billion in 2005.
"The whole face of retail is being transformed by technology," says Peter Woolford, vice-president of policy development and research for the Toronto-based Retail Council of Canada.
"The pace of the application of IT to retail is rapid. That's the big story here. Retailers are embracing IT and embracing it in many ways."
However, retailers also want the customer to feel at home and comfortable in a store's surroundings. "Nobody wants to jar the consumer so that when they walk into the store they find that they've walked into the next century," adds Woolford. "It's about keeping the whole experience comfortable and familiar."
But ready or not, the change has already started.
In Wal-Mart's new Canadian Supercentres - larger stores that carry 120,000 products compared to 80,000 in a typical Wal-Mart and offer a full line of groceries and enhanced key departments such as fashion and electronics - shoppers have already been introduced to 32-inch LCD screens strategically placed above the cash registers.
Initially, this in-store television network, known as Wal-Mart ShopCast TV, will broadcast a combination of store-specific advertising content and company information directly to customers while they shop.
But as the program expands - it was unveiled at the first four Supercentres that opened in Ontario in early November and it will be rolled out next at four more Ontario Supercentres to open in January 2007 in Brampton, Sarnia, Scarborough and Vaughan - larger 46-inch LCD screens will start to appear in departments such as fashion and produce. They will feature department-specific information ranging from updates on the newest clothing items to food-preparation tips.
Eventually, all Wal-Mart stores will get the screens. Programming, meanwhile, can be changed as quickly as it needs to be, but will likely take into consideration that customers shop their Wal-Mart stores every 10 to 14 days.
"The main reason we're doing is be more relevant to the customer," says Wal-Mart Canada Corp. spokeswoman Christi Gallagher.
"We host about a million customers a day. It's an innovative way for our customers who are time pressed to find out what's going on in their local stores, especially if they haven't had a chance to read their local circular."
During a comprehensive pilot of the Wal-Mart ShopCast TV program conducted with Muldoon and Co. of Richmond Hill in conjunction with Toronto-based Starch Research, 90 per cent of customers said Wal-Mart was creating a more pleasant shopping experience, 82 per cent said it provided new information, while 35 per cent said it informed them of products they did not know that Wal-Mart carried.
But while Wal-Mart's program is already underway, other technological advances could take more time.
"Our sense of the timelines may be a little longer than the suppliers are suggesting," says Woolford.
That's likely the case when it comes to machines to download audio books, music or pre-recorded DVDs in stores.
"That is probably a couple of years off, as the digital rights management (issues) have to be worked through," says IBM's Bruce Rasa, who notes that in addition to burning the content to a CD or DVD for a pre-determined price - including a custom cover for the item - there will also be the possibility of downloading the item to a user's own device, such as a cellphone or PDA.
Rasa, based in Raleigh, N.C., and product manager for the IBM Anyplace Kiosk, says IT advances are propelling these changes.
"With the digital revolution, why would people want to come into a store? This would be a way to add an added value (to the retail experience)," says Rasa. "It's not quite here yet but there is a high interest in it."
Newer models of the Anyplace Kiosk can be found in some Virgin Megastores in the U.S., where Virgin has renamed them as Virgin Vaults. They replace older and slower kiosks as well as other listening stations that were limited in function. Customers can preview new CDs, watch video trailers or view reviews and see screen shots.
With this new implementation, Virgin Megastore is also building the infrastructure and laying the groundwork for offering shoppers even more choices. For example, a "guided selling" application is planned to make product recommendations based on shoppers' music preferences and past purchases.
The IBM Anyplace Kiosks, built with a sleek and compact design engineered to withstand even the harshest retail environments, give shoppers the ability to sample more than 250,000 CDs, 11,000 DVDs and 7,000 games. They can also be programmed to feature holiday or event-specific data and are able to relay statistics so that store managers or owners know what merchandise is in demand.
Maureen Atkinson, a senior partner with the Toronto-based retail consulting firm J.C. Williams Group, says it's time for the old "listening posts" found in music stores to move to the next level.
"The extension of the old listening posts, that's going to be more common. It definitely is likely to happen sooner. At some point the retailers have to come to terms with what's happening in that industry, as far as web access and downloading. I think it's just a matter of time," says Atkinson.
Some technologies, however, are still a few years away for Canadian retailers.
METRO Group of Germany uses a number of innovative technologies in its Future Store supermarket in Rheinberg.
They provide "smart" shopping carts that have a touch screen that allows the shopper to keep a running tally of what is put into the cart; smart scales that use an integrated digital camera to identify fruits and vegetables based on their color, shape and size; and wine display terminals that project a light on the ground guiding the customer to the shelf where the selected wine is located.
But Atkinson says items such are still cost-prohibitive for many retailers in Canada. "The smart carts, for example, until vendors can prove there is a return on some of this stuff it will be a while before it makes it to your local grocery store," she says.
Meanwhile, shoppers can expect self-serve checkouts to improve.
"While we do see self-checkouts in many locations, I think most of our members would agree that they are looking for something a little more customer friendly," says the RCC's Woolford.
And don't be surprised if you see them in more locations throughout the store, adds Rasa, noting the idea is to make it easier for the customer to pay for the product at the point where they experience it in the store.
"Retailers are basically looking at how we can help them serve the consumer better," he adds. "They want a unique value for the consumer in their store."
(Laura Severs can be reached at laura@businessedge.ca)
