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Retailers Tap High Tech to Aid Shoppers

Newest Innovations Add Service, Cut Costs

By Michael Barbaro
Washington Post Staff Writer
Monday, January 17, 2005; Page A01

A New England supermarket chain will soon roll out an intelligent cart that downloads shopping lists and warns customers with a flashing image when it passes a product on their list.

Shoppers at a national electronics store and home improvement chain who cannot find a salesperson soon will be able to walk up to an in-store computer, push a few buttons and get help from someone at a call center in Bangalore.

And a German supermarket has a computer system that projects arrows onto the floor to direct customers to the products they want.

This week, thousands of retail executives are attending the annual convention of the National Retail Federation, the shopping industry's biggest trade show, in New York. The new technologies they will see at the convention, which ends Wednesday, often shape their decisions about how to run their stores.

Two trends appear to be driving the push for innovation, analysts said. Retailers are encouraged by consumers' willingness to use self-checkout lanes and price scanners, technology that has reduced the reliance on store employees. And stores think they have to make bolder moves in the face of a hyper-competitive retail landscape that prizes efficiency and cutting costs.

Retailers have spent millions of dollars on technologies that squeeze savings out of manufacturing and distribution. Now, retailers and technology companies are zeroing in on the more visible part of the process: the sales floor.

"Retailers have hit a wall -- they can't really cut any more costs out of those backroom operations anymore, so they are moving [technology] into the store, said David Hogan, who oversees technology for the Washington-based National Retail Federation trade group.

The new technologies do more than save money, though. For the chains that adopt them first, executives said, they create a distinctive shopping experience. "It's a form of entertainment," said Craig Childress, director of prototype design research at Envirosell Inc., a worldwide market research and consulting firm based in New York.

Most of the new technologies are just beginning to reach stores -- in some cases, for test runs that may never turn into full adoption by retailers. The retail landscape is littered with much-ballyhooed technologies that flopped -- because consumers rejected them outright or they were too expensive or they were deployed before their time.

Back in the early 1990s, it was the electronic shelf labels -- small, digital price tags whose numbers could be changed though a central computer -- that were supposed to revolutionize retailing, by reducing labor costs and human errors. But only a handful of supermarket chains adopted them; the rest found them too expensive, said Dan Hopping, a retail technology consultant for International Business Machines Corp. of Armonk, N.Y.

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