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Metro Group’s Retail Revolution

RHEINBERG, GERMANY — The retail industry has seen the future and it is here.<br><br>The location for Metro Group’s first test site for its Extra Future Store is a small, sleepy hamlet halfway between Düsseldorf and Cologne, whose only...

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Personal shopping assistants are distributed in the information area.

Martin Jepp

RHEINBERG, GERMANY — The retail industry has seen the future and it is here.

The location for Metro Group’s first test site for its Extra Future Store is a small, sleepy hamlet halfway between Düsseldorf and Cologne, whose only claim to fame is being the hometown of supermodel Claudia Schiffer.

But its ordinariness is precisely why Rheinberg was chosen by the German retail giant. The Future Store initiative is an international and interdisciplinary cooperation between the Metro Group SAP, Intel and more than 35 other companies from the consumer goods industries, information technology and service sectors. Its purpose, according to Metro Group, is to test new retailing technology under real conditions. While there are no specific plans for a rollout of the concept, Metro chief executive officer Hans-Joachim Körber has said a second Future Store could open in the not-so-distant future.

According to the company, the fact that the Future Store is a supermarket is incidental; the systems being linked and tested in Rheinberg are not restricted to food retailing.

The Metro Group, which generated sales of almost $58 billion in 2002, operates 1,744 units in 26 countries. Besides the Metro Cash & Carry food and nonfood membership stores and Real and Extra supermarket chains, the company owns Media Markt, an electronics chain, Praktiker hardware stores and Kaufhof department stores.

While other Metro Group divisions are testing new high tech systems, the Future Store in Rheinberg is the company’s biggest statement about its commitment to technology. The supermarket, which was built in 1977 and not remodeled since, was just the right size and close enough to Metro Group headquarters in Düsseldorf for executives to keep a close eye on the project.

From the outside, there nothing futuristic about the 40,000-square-foot Extra Future Store, which was unveiled on April 28, except the name. Bright red and green plastic shopping carts look easier to navigate than the usual metal models. (The carts are plastic because metal would interfere with the store’s high tech systems.)

Small mobile computers called personal shopping assistants, fasten onto shopping carts and are available at an information desk. The PSAs have an integrated bar code scanner, which allows customers to scan their purchases as they put them into their carts. A payment key transmits the total sum of their purchases by radio to the checkout. Consumers save time because they don’t need to put items on a conveyor belt before paying.

This story first appeared in the August 8, 2003 issue of WWD.  Subscribe Today.

The PSAs have a search function to find the location of products in the store. They can also call up product information and prices, alert shoppers to special offers, tally up the savings for everything in the cart and, for repeat shoppers, display an individual shopping list compiled on the basis of previous visits.

The PSAs communicate via an in-store wireless local area network, which also links personal digital assistants, tablet PCs, information terminals and advertising displays to the store’s central server. Shoppers can try out a PSA, then sign up for a Future Card, which becomes their personal ID. Since opening, about 15 percent of the store’s customers have opted to shop with PSAs, a spokeswoman said.

Other innovations include an intelligent scale in the produce department equipped with a camera and identification software that recognizes the fruit or vegetable being weighed, then prints out an adhesive price label.

Information terminals throughout the store provide details about products from place of origin to nutritional data. Shoppers can scan a package of beef in the meat department and request recipes.

In the drugstore and personal care area, two terminals operated in cooperation with Schwarzkopf offer advice on hair care and color. In the next planned phase, consumers will be able to use computer imaging to see how they’d look in various hair colors.

The Future Store has electronic advertising displays and electronic shelf labels, which can be programmed in a matter of seconds from a central location. Information is fed from Metro Group’s central merchandise management department and recorded on price labels. Price changes are simultaneously transmitted to both the shelf and checkout by the computer radio system, preventing price differences caused by erroneous labeling.

Radio Frequency Identification is the backbone of the Future Store’s high tech system. RFID tags store more information than bar codes and are considered a valuable tool for organizing logistics and managing inventory more efficiently.

Zygmunt Mierdorf, member of the Metro AG management board, said RFID makes it possible to identify a complete pallet of goods as soon as it passes through a checkpoint.

“The merchandise registration work is drastically decreased and the error rate is reduced,” he said. “With RFID, it’s possible to continuously track the goods on their way from the producer to the Extra Future Store.”

Kaufhof, Metro Group’s department store chain, is testing RFID in two of its stores in cooperation with the German apparel firm Gerry Weber. RFID readers will be installed on shelves to control merchandise levels at point-of-sale. At the cash wrap, RFID antennas will help speed up Gerry Weber transactions.

RFID also makes the Future Store’s smart shelves possible. Certain shelves, such as those for dairy products, are equipped with RFID readers that recognize the products being stored. If an item is taken off the shelf, an RFID reader detects the movement. The system automatically registers goods that are misplaced and out-of-stock.

RFID readers at checkouts set off an auditory alarm if a tagged item hasn’t been paid for. Metro said RFID technology could completely replace bar codes on retail and transport packages.

With all the technological aids to speed up the shopping process, Metro Group had to think of a way to get consumers out of the store just as quickly. Checkout options, include bar code readers with easier-to-use touch-screens for cashiers, smart checkouts with PSAs or self checkouts.

In the last option, shoppers — not sales assistants — drag each article across a scanner, which registers the price and checks the weight of the items as they’re placed in a shopping bag. Payments can be made in cash or by credit card. (Similar technology already exists in many U.S. supermarkets.)

Metro plans to release results of the test at the end of August. In the meantime, the spokeswoman said the store’s sales have grown and customers’ return trips have increased. But both factors are also partly due to the store’s adoption of a new Extra Fresh & Easy concept, which offers more fresh, nonpackaged food in employee-assisted areas, the spokeswoman said.

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