Feb 7, 2002
San Diego, CA - February 7, 2002 - American food retailers are aggressively exploring top-line growth strategies using available and emerging technologies, according to a new report from the Food Marketing Institute (FMI). The study, Technology Review Highlights 2002, was released at FMI's 2002 MARKETECHNICS convention being held here.

Supermarket companies continue to realize significant gains in customer service and operating efficiencies due to new and enhanced technologies," notes Janice Jones, FMI's director of research. From POS systems at the front end to company-wide expansion of e-communications, this report identifies the critical function areas where retailers are investing their technology dollars."

Store Communications

Ninety percent of the survey respondents use e-mail in daily operations, with 79 percent using it at store-level. Internet access has also expanded, with 77 percent of those surveyed providing employee access at the store level and 18 percent planning to incorporate Internet access at the point-of-sale. The use of Intranet communication by food retail companies has increased as well, tripling in just the past five years.

Home Shopping

The survey finds that home shopping services are offered by 40 percent of supermarket operators, with an additional 13 percent planning to do so in the coming year. Home delivery is the most popular program, offered by 69 percent of retailers; closely followed by in-store pickup of products ordered, offered by 63 percent. Eighty-seven percent of respondents use their own stores as the primary fulfillment location for home shopping programs.

Point-of-Sale (POS) Scanning Systems

One of the fastest growing POS systems is the self-checkout station, currently in use by 19 percent of food retail companies in the survey. Usage tends to be most frequent with larger companies all of the respondents reporting the use of self-checkout systems in at least one store operate 11 stores or more.

Nearly 70 percent of respondents currently have stores capable of scanning the European Article Number 13 (EAN-13) code designed to facilitate trade on a global scale at POS and in their databases. Twenty-two percent are currently capable of scanning the EAN-14 code the next benchmark for international trading and 76 percent expect to have that ability by 2004.

Electronic Commerce

Supermarket companies are taking an interest in e-commerce business initiatives, according to the survey. Currently, 29 percent of food retail companies report participating in a business-to-business (B2B) exchange, and 57 percent plan to do so.

Forty percent of survey respondents use an electronic data interchange (EDI) to conduct business transactions with suppliers. However, 46 percent of those surveyed plan to move from an EDI to a B2B exchange.

Food retailers are also using scan-based trading (SBT) to synchronize supply and demand at the point-of-sale and to eliminate efficiencies that add costs to the direct-store-
delivery supply chain. The survey found that 29 percent are using an SBT operation and 23 percent plan to do so in the future.

Emerging Technologies

The survey asked participants about several new and emerging technological applications. At store level, 3 percent reported using biometrics, a technology that
allows for identification via an eye scan, thumbprint or other unique physical characteristic; and nearly 15 percent are planning to incorporate this system in the next few years. Similarly, 13 percent of retailers surveyed report the installation of readers for smart cards at POS and an additional 8 percent intend to install them by 2003.

One out of four supermarket operators surveyed are exploring the potential of wireless systems at the front end of store operations. Of these operators, 18 percent use
wireless networks at POS and 8 percent use wireless hand-held payment terminals. Throughout the store, 15 percent of participant companies use wireless scales in service departments and 25 percent use other types of wireless systems. Among the most commonly used are hand-held ordering systems and DSD receiving.

The complete results of Technology Review Highlights 2002 are available online to FMI members at www.fmi.org/pub. Printed copies of the survey results are available ($10 FMI member; $25 nonmember) through FMI Publications and Video Sales department (202-452-8444 or pubsales@fmi.org).