Invisible VS. Intrusive: Guess Which Wins

By Tom Steinert-Threlkeld  |  Posted 2004-02-05 Email Print this article Print

"If you want to succeed with in-store technology, it's easier to get employees to go along with your plan than customers. "

It's accepted fact that Wal-Mart Stores blew past Kmart and other discounters largely because pickup-truck driver Sam Walton pioneered the use of technology to improve his "supply chain." Based on bar codes, he collaborated with vendors to speed goods to shelves, track them on their way out and quickly restock not just with the same goods, but the right goods.

It almost seems a foregone conclusion Wal-Mart will lead the way again in introducing new information technology, forcing other retailers to catch up. Wal-Mart is at the forefront in evangelizing—and demanding—the use of tags containing chips and antennae that provide even greater efficiencies in keeping track of inventory.

But at least one chief executive believes he can beat Wal-Mart at the technology game. He is Larry Johnston of Albertson's, whose quest to establish his company as the preeminent grocer in this country—bar none—is chronicled by senior writers Mel Duvall and Kim S. Nash in "A Shot at the Crown,".

Johnston hopes so-called "Store of the Future" technologies will enable Albertson's not just to avoid being the latest retailing roadkill for Wal-Mart, but to create a better, more profitable and bigger merchant of food than all the Supercenters, Neighborhood Markets and other outlets the spartans from Bentonville can put together.

Speeding forward five or 10 years, his customers will compile shopping lists on personal portals, pick up personal shopping assistants at the nearest Albertson's store, then beeline up and down aisles to find the right cans, bottles, packages and sacks according to directions onscreen.

Oh, yes: Checking out may just mean walking out the door. Radio signals will scan those tags, prices will be tallied up and a credit card nicked for the total, without the shopper breaking stride.

Sounds possibly, even probably, too good to be true. Twenty years ago, proponents of Television of the Future had us all getting highly "interactive" with our sets. We'd be choosing camera angles at football games, even calling the plays. We'd order pizza onscreen. Oh, and of course, we'd pick any movie we wanted to play back at any time of day.

That last part finally is starting to happen in limited ways in large markets. But the vast majority of consumers of televised images are passive, not active. They are not changing their habits.

What Wal-Mart has done so effectively is make its uses of technology invisible to the customer. All it promises is popular products at low prices—and that shoppers will find them on the shelf. From there, every one knows how to put a box in a buggy. At checkout, Wal-Mart is more interested in the high technical art of creating spinning merry-go-rounds for the bags its cashiers must fill than getting shoppers to bag their own goods and check themselves out.

Larry Johnston's big challenge is to get his customers, still largely females of all ages, to adopt an intrusive technology. He is asking them to keep in hand a device whose main purpose could well turn out to be emitting an endless stream of promotions to the customer. It could be pop-up ads run amok.

What must be demonstrated is a compelling reason—clear savings—for customers to participate. Regular shoppers already know what's in each aisle. Many pretty much know what they're going to buy. In 27 years, I can count on one hand the number of times my wife has even compiled a shopping list. Yet she gets the job done.

Yes, you can argue generations change; that Johnston or others betting on personal-shopping assistance will win in the end with young customers who have grown up computer happy and savvy.

But counting on changes in customer behavior, in the short- or long-term, is not as strong as Wal-Mart's technology strategy, in which the application is hidden and the only persons who need training are those on your payroll.

Besides, as Duvall and Nash note, Johnston is already playing catch-up. If he wants to be number one while he's still CEO, he doesn't have the luxury of counting on generational change to get there.

Tom was editor-in-chief of Interactive Week, from 1995 to 2000, leading a team that created the Internet industry's first newspaper and won numerous awards for the publication. He also has been an award-winning technology journalist for the Dallas Morning News and Fort Worth Star-Telegram. He is a graduate of the Harvard Business School and the University of Missouri School of Journalism.

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