Breaking Buzz & Analysis
El Segundo, California-based Fresh & Easy Neighborhood Market is following the lead of parent company Tesco and testing a version of the United Kingdom-based retailer's mobile self-scanning system at its store at Olive and Verdugo in Burbank, California.
The "Scan As You Shop" mobile self-scanning system being tested at the Burbank Fresh & Easy store is similar to those used by a few U.S. grocery chain's, like Stop & Shop on the east coast (in about 350 of its 375 stores) and Belgium-based Delhaize Group's Bloom chain - which it said last month it's eliminating for lack of performance; converting 42 of the existing 49 Bloom stores to the Food Lion banner and closing the remaining seven units.
In addition to Tesco, Waitrose and Morrisons are two other supermarket chains in the United Kingdom that offer mobile hand-held scanners in some of their stores.
Fresh & Easy's system, from Motorola, features a hand-held scanner device (see above and below) which customers carry with them as they shop the store. Shoppers then scan the product codes on the items they purchase as they shop.
Once a customer completes his or her shopping trip, they then go to one of the two specially designated self-service checkout stands in the Burbank Fresh & Easy store for checkout.
Once at checkout, a store employee randomly checks a few of the items (currently six SKUs) the customer has scanned into the hand-held device in order to check for accuracy.
After the random security check is made, the customer then completes the checkout process. Since the purchases are already scanned into the hand-held device, all that's required is for the shopper to tally the items on the device and make payment at the register.
The "Scan As You Shop" system allows shoppers to keep real time track of their purchases as they shop.
It's also compatible with Fresh & Easy's "Friends" loyalty/rewards card.
Tesco-UK tested "Scan As You Shop" for six months, from spring to the fall of 2010, at a store in Rumford, UK. It's expanded the system into some additional stores in the UK since then.
If the test at the Burbank Fresh & Easy store is a success as defined by Tesco, plans are to expand the "Scan As You Shop" system to additional stores, according to our sources.
Fresh & Easy Neighborhood Market has not publicly announced it's testing the hand-held mobile self-scanning system at its Burbank store. The test was just recently launched.
According to sources, the grocery chain has hopes the "Scan As You Shop" system will result in customers purchasing more items in the stores (at least at the Burbank test store to start) because shoppers are able to tally their purchases as they shop, resulting in higher average market basket sizes (shoppers buying more per-store-visit than they currently are doing) at the Fresh & Easy stores, which is something the grocery chain needs to achieve, as we've discussed in depth in the blog, but hasn't been able to achieve in a significant enough way to help it break-even financially to date.
This hope that the "Scan As You Shop" system being tested in the Burbank store could lead to higher average market basket purchases was discussed at Fresh & Easy's weekly meeting at its corporate offices in El Segundo, California last Wednesday, in fact.
There's no hard evidence out there though, based on our experience and research, that such mobile self-scanning systems result in encouraging shoppers to purchase more per shopping trip. In fact, there's actually some evidence to suggest the opposite can occur, which is that because shoppers are able to keep a real time tally of their purchases as they shop, it better enables them to hold purchases to a set amount, even putting items back that exceed that desired total spend. Therefore, impulse purchases could be reduced.
Fresh & Easy's senior management, led by CEO Tim Mason, also have as a goal with the "Scan As You Shop" system the speeding up of the checkout process in the Fresh & Easy stores, according to our sources.
This is a bit odd since Mason and Fresh & Easy's spokesperson have been saying since the first Fresh & Easy stores opened in November 2007 that one of the hallmarks of the chain's self-service checkout system is that it allows for faster customer checkout than conventional full-service checkout, which is offered by all of Fresh & Easy Neighborhood Market's competitors in California, Nevada and Arizona. Some of those competitors also offer self-service as an option, along with full-service checkout, in some of their stores.
Additionally, as a source with extensive experience working for Tesco's Fresh & Easy points out, the Fresh & Easy stores have only 10,000 square-feet of selling space (there are four 3,000 square-foot "Express" format stores and a handful of 7,000 square-foot stores) and eight grocery aisles, so: "How much time can you really save with 'Scan As You Shop,'" over the current time it takes to checkout in the stores, the source says. " They're (Fresh & Easy) not Costco, with people filling their carts to the brim," he adds.
The source points to another high-tech project, called Agora, that Fresh & Easy spent a considerable amount of effort and money on but hasn't in his analysis (and in ours) provided any tangible benefits to the fledgling Tesco-owned chain.
"I see 'Scan As You Shop' as "another wasteful project, like one called Agora, a triangulation program for users with an IPhone or Android phone, where you download an app for your phone and upload the floor plan of your store, then you can see where you are," he says. "You can also type in, for example, 'rice' and see what's the best path to get to the shelf with rice. But again, F&E only has 8 aisles, how lost can people get?"
He adds: "To do this project (Agora), you'll need 3 detection devices, an app, a specific map of the store and all the SRD (Space Range and Display) plan for the store real time for the consumers. They've piloted this project in the Manhattan Beach store. It seems like a waste of resources to me," the source says by way of comparing the 'Scan As You Shop' effort to it.
"With so much focus on all these special technology projects, I think UK and Tim [CEO Mason] have lost focus on the issue at hand," the experienced Fresh & Easy employee says. "They don't need cool tech to help people - they just need more people and sales. They don't need Agora or 'Scan As You Shop'. They just need someone to fix GO (Group Ordering - written in the UK) so that their just-in-time supply chain doesn't screw up. They need better quality assurance in the fresh dept and for the suppliers," the source says.
Mobile self-scanning systems offer potential benefits for shoppers who choose to use them however, such as having the ability to keep that running tally of what they purchase.
Some systems also include the ability to pay for purchases via smart phone. The test system at Fresh & Easy doesn't offer that feature at present.
But the benefits of the systems for grocers depends on the specific chain and where it's at from a development and financial standpoint.
In terms of time savings, a mobile self-scanning system can perhaps achieve that in a store where checkout is full service, although full-service is often actually much faster than customer self-service. But since the Fresh & Easy stores have self-service checkout only, which means customers unload, scan and bag their purchases at the checkstand anyway, it's hard to see where any meaningful time-savings will be achieved with the "Scan As You Shop" system.
Instead, what occurs is better explained as customer-labor shifting - rather than the customer scanning and bagging at the checkout, they do so while shopping.
It takes essentially the same amount of time to scan and bag while shopping as it does to do it at the checkout though. The only time-savings we can see with the system at Fresh & Easy is if all of the self-checkout lanes in the store have lines, something seldom seen in a Fresh & Easy store, at which point it might be faster using "Scan As You Shop" because the two specially-designated checkout lanes might move faster than the regular self-service lanes, assuming customers are lined up at them waiting to checkout.
It takes essentially the same amount of time to scan and bag while shopping as it does to do it at the checkout though. The only time-savings we can see with the system at Fresh & Easy is if all of the self-checkout lanes in the store have lines, something seldom seen in a Fresh & Easy store, at which point it might be faster using "Scan As You Shop" because the two specially-designated checkout lanes might move faster than the regular self-service lanes, assuming customers are lined up at them waiting to checkout.
Christopher Luna-Vasquez, a customer who used "Scan As You Shop" for the first time today at the Burbank Fresh & Easy store, told Fresh & Easy Buzz he likes the mobile self-scanning system for just that reason - that it allowed him to track his purchases in real time while shopping - and that it was faster for him than using Fresh & Easy's regular self-checkout system.
Whether or not there are enough fans of the "Scan As You Shop" system at the Fresh & Easy store, like Luna-Vasquez, is yet to be seen. But that's what tests are for, as long as they aren't biased tests.
In our analysis, testing the "Scan As You Shop" system at one store is fine. However, on a priority scale of 1-to-10, it doesn't even register in terms of where Fresh & Easy should be focusing it's efforts as a grocery chain, in our analysis.
That job one focus needs to be on the basics of foods and grocery retailing, which we aren't seeing being done in El Segundo, although we do see it being done by workers at store-level, despite a number of limitations placed on them by policies coming out of the home office.
[Photo credits: Christopher Luna-Vasquez and Rafael Luna-Vasquez, special for Fresh & Easy Buzz. Taken February 5, 2011 at Fresh & Easy Neighborhood Market, Olive and Verdugo, Burbank, California.]
