Alcone Marketing Group – Consumer Lab

The Consumer Lab is the consumer insights and brand strategy group at Alcone Marketing Group, a consumer activation company.

Big Boxes Aim to Speed Up Shopping

Time-Pressed Customers Get
Help Finding Wanted Items;
The Self-Checkout Debate

By KRIS HUDSON and ANN ZIMMERMAN
June 27, 2007; Page B1

The average shopper at a Wal-Mart supercenter spends 21 minutes in the store but finds only seven of the 10 items on his or her shopping list.

[Faster]
Checkout lanes at a Costco in Washington state; to ease congestion, each register is staffed with two employees.

As Wal-Mart Stores Inc., the world’s largest retailer, tries to boost flagging sales growth, one key is helping customers find and buy those eighth, ninth and 10th items before they rush off to their kid’s soccer game. So the chain is attempting to make its sprawling stores easier to navigate. Among the changes: better signs to help shoppers find merchandise, more convenient placement of hot-selling items and staffing changes to speed up checkout times.

“We don’t decide how long the people are in the store,” Wal-Mart marketing chief Stephen Quinn explains. “What we decide is how easy it is for you within the 21 minutes you’ve allocated to get what you want.”

Many of Wal-Mart’s big-box brethren, from Home Depot Inc. to Best Buy Co., are also pursuing the goal of making their premises less overwhelming for shoppers. Their tools range from brighter light bulbs for quicker comparison shopping, to personal assistants catering to customers’ whims. Like Wal-Mart, many are determined to eliminate lengthy checkouts, perhaps the biggest turnoff of all for harried customers.

Focusing on convenience represents a turning point for discount retailers. For years, they kept building bigger and bigger boxes, figuring the combination of low prices and huge assortment trumped other considerations. The result is that shoppers all too often spend much of their time trudging from department to department to find elusive items on their shopping list, and some give up without finding them.

Wal-Mart’s efforts last year to lure upscale customers by stocking fancy merchandise and clothing largely failed. Wal-Mart’s same-store sales, or those at stores open at least 12 months, rose a meager 2% last year, its smallest annual increase since it began tracking such sales in 1979. But Americans collectively make 127 million trips to Wal-Mart each week, and the retailer knows if it can sell each of them another item or two, it can keep its sales growing rapidly. Indeed, Wal-Mart officials say the chain’s customers are spending more during each visit this year, which is helping the retailer offset a decline in overall customer visits.

At the same time, retailers with smaller-store formats are nipping at the heels of big-box retailers. Dollar stores have much less selection than a Wal-Mart or a Target, but their pricing is aggressive and customers can buy what they want in minutes. Tesco PLC, the British grocer, plans a splashy entry into the U.S. market over the next few months with 10,000-square-foot stores, a 20th the size of a typical Wal-Mart supercenter.

Big-box retailers are using different tactics to make their boxes less intimidating. In a pilot program, electronics retailer Best Buy is employing “personal shopping assistants” in 60 stores who are knowledgeable about all merchandise in the store. They wear button-down dress shirts to set them apart from regular Best Buy salespeople clad in Navy blue polo shirts. Their job is to individually serve time-starved customers making complicated purchases such as home-theater systems. Best Buy won’t disclose the results of the pilot program, other than to say it has resulted in the retailer introducing more cross-department training in its 852 U.S. stores.

Best Buy rival Circuit City Stores Inc. has outfitted salespeople in 20 of its stores with computer tablets hung from their shoulders like book bags. The salespeople use the tablets to call up product specifications for customers and help them compare features of various merchandise.

Target Corp. and Wal-Mart have attempted to make shopping easier for new moms by clustering baby clothes, baby food, strollers, diapers and even maternity clothes in the same department. Target customers “have responded favorably and it has translated into positive financial results for Target,” says spokeswoman Lena Michaud, who declined to cite specific sales figures.

[Faster]

Hardware chain Lowe’s Cos. frequently checks lighting levels at its stores to ensure bulbs haven’t dimmed with time. Lowe’s installed “Need Help” buttons where shoppers often need to summon assistance — key-cutting and shelving areas, for example. The average response time: Less than one minute. Rival Home Depot tested the call buttons this year and is now installing them in its roughly 1,900 U.S. stores.

At Wal-Mart, catering to 21-minute shoppers enlists several disciplines. The retailer is striving to clear more of its aisles and widen them. It has installed a computer-modeling system to dictate cashier schedules at 1,000 of its U.S. stores. The goal: to have more cashiers available during each store’s peak shopping periods. Wal-Mart executives say that 85% of its stores using the scheduling system posted sales gains in March and April twice that of those not using the system.

Checkout is crucial because Americans aren’t patient shoppers. A 2006 survey by the Mystery Shopping Providers Association found average checkout-line wait times of four minutes, 27 seconds, at grocery stores; four minutes, 55 seconds, at apparel stores; and five minutes, 23 seconds, at department stores. Still, hurried customers bristle at the wait times and often perceive the delays as longer than they actually were.

“Navigating jammed aisles and then waiting to check out for more than a few minutes isn’t worth the price savings on just a few items,” says Guilbert Brown, a college administrator, in Virginia. Mr. Brown says he favors Target above Wal-Mart due to the relative ease of navigating Target’s aisles and checkout process.

Many retailers, such as warehouse-club chain Costco Wholesale Corp., have added technology that allows shoppers to swipe their credit cards before their entire purchase is rung up. In 2003, Costco opted to incur an extra $40 million in annual expense to augment the staffers who box merchandise at its registers and load it into customers’ carts.

The result: In the past three years, Costco’s average hourly transactions per register increased to 45 from 37, according to the retailer.

Some big-box retailers are embracing the most controversial of checkout-line evolutions: self-checkout areas, where up to four shoppers scan their own purchases under the supervision of one cashier. Home Depot has installed self-checkout in all of its U.S. stores, and Costco is experimenting with it in 30.

But Target Chief Executive Bob Ulrich eschews self-checkout as clumsy and confusing for shoppers. Instead, Target fine-tunes the staffing at its registers. “Our staffing schedule is designed to cover maximum peak volume,” he says. “I am convinced that one professional checker is as fast as four self-checkout machines.”

Posted by rfprice

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