Article

Superquinn testing NCR's retail technology

The Ireland-based supermarket chain signed a deal to showcase and test NCR's retail technology, including kiosks, electronic shelf labels, other hardware and point of sale software.

March 24, 2002

Superquinn has a new brand on display in its grocery stores: NCR. The Ireland-based supermarket chain signed on in June to be an exclusive user of NCR Corp.'s retail hardware and software, including kiosks. The deal, which NCR called a Center of Excellence, is NCR's first.

NCR's presence in Superquinn will be extensive. Frank Murphy, Superquinn's finance director, said, "Ninety percent is NCR in the store. What is not, is a business NCR is not in."

Advantages

Being a Center of Excellence gives advantages to both companies. Superquinn prides itself on technical innovation, and testing the latest equipment will confirm this reputation.

"We actually encourage the use of a lot of technology. We're a great believer in the fact that we can use technology to improve customer service," Murphy said.

Now the company has a way to try out the latest retail technologies.

"We get to play with that technology before anyone else," Murphy said.

Richard Maton, NCR's public relations manager for northern Europe, said NCR's products will be featured when Superquinn host visits from other retailers from around the world.

Superquinn will also send its executives into the marketplace to spread word of the new technology at a variety of business meetings. The first such event was an NCR business conference held in Istanbul, Turkey in May, Maton said.

One might think that Superquinn's impact in the retail trade, and its potential to help NCR's reputation, would be small, given that the supermarket chain, founded in 1960 by Feargal Quinn, has fewer than 20 stores.

Murphy said that the grocer's relatively small size actually encourages visitors.

"The reason (for the visits) is that we're a small company and non-threatening," he said.

The chain has earned interest and respect for its tech innovations from around the world, according to Sarah Turnbull, senior project manager for NCR.

"They are very known, world-renowned really, for different methodologies that they run in their stores for their customer loyalty schemes," she said.

Lots of tech: kiosks

The Superquinn loyalty program, called SuperClub, will be added to NCR kiosks under the new agreement. According to NCR's Maton, Superquinn will purchase NCR's model 7401 Web kiosk and incorporate it into a kiosk application called InTouch. 

These kiosks will be placed strategically throughout stores. They will feature information on wine, recipes, the SuperClub program and a new program called Save Your Change.

Fifteen companies participate in SuperClub. Customers can earn points and redeem them at businesses such as Texaco, Justyne Flowers, the Eircom phone company, Great Southern Hotels, and Executive Travel, Murphy said.

Using the Save Your Change program, customers can have change from purchases added to their loyalty cards, and take their money out again any time they want.

"It started out as a point of convenience both for us and for the customer," Murphy said. "Now it's a real savings program."

Customers can withdraw money by printing vouchers at the kiosks.

"The kiosk almost becomes an ATM," he said.

Superquinn has set a standard of four kiosks per store -- at the checkout area, in the wine department, and at other key locations for its programs. In all, Superquinn will operate 76 kiosks. The kiosks have two printers, one printing on standard stationery for recipes and other customer information, and one for vouchers printed on special, secure stationery, Murphy said.

Shelf labels go wireless

In addition to kiosks, NCR is installing its DecisioNet electronic shelf labels. The permanent plastic wireless labels allow Superquinn to update prices without having to print new labels or manually add them to shelves.

This is the first installation of Version 3 of the product, Turnbull said. She said DecisioNet was quicker and more cost-effective than manually changing labels.

"When there is a price change, the information will be beamed to a specific label on the shelf edge and that will update the price. They may have 5,000 price changes for a week," she said.

NCR plans to prove the system works before introducing it in America.

"They have to prove it actually works in a retail environment to get a U.S. certification," Murphy said.

Murphy said that Superquinn is not obligated to keep the system, and will test the product rigorously.

"We intend to test it both technically and for customer acceptance," he said. "We will take our time doing it."

Testing it in a real-world situation is necessary, he said, because a laboratory environment can't reproduce interference with the radio frequency (RF) that may be encountered in stores.

"You can test it to death in a laboratory environment, but because of the RF system it's not as easy to do that. There's nothing like a real live environment to really test the components," Murphy explained.

He said interference from other in-store electronics, such as point-of-sale (POS) scanners and refrigerators, can cause problems.

One concern is whether customers will like the shelf label system.

"Customers dislike change intensely," Murphy explained.

He said the store will set up DecisioNet aisle by aisle to minimize disturbing customers and will inform them of what is going on and why.

"If you explain the reasons to the customers they'll forgive you," he said.

More tech

NCR is providing the grocer with a new point-of-sale system and other hardware, including scanners and POS terminals. In addition, Superquinn is interested in adding NCR's customer relationship management (CRM) system.

"This is actually an initiative we are pushing with them," Murphy said.

Where does it end?

The retail chain has not lost its autonomy when it comes to choosing its technology.

"We're not obliged to take every technology NCR produces. They would like to think that they could persuade us to use all of their good technology for the business, but they would have to persuade us," Murphy said.

What's the cost?

Turnbull would not disclose the financial terms of NCR's agreement with Superquinn, though the Center of Excellence designation provides Superquinn with some leverage.

"We can negotiate a good deal with NCR, but at the end of the day there's no question of getting these things for nothing," Murphy said.

NCR helped with the cost of installing DecisioNet, Murphy said, but Superquinn wouldn't accept the new technology at no cost. It's one of Murphy's laws.

"We wouldn't be comfortable getting something for nothing," Murphy said. "If it doesn't work, we have to feel that we can have a decent row (fight) with NCR as well as anybody else."

Downside

What if the Center of Excellence turned out to be not so excellent? Murphy could only think of one pitfall.

"Perhaps we've put all our eggs in one basket," he admitted. "But we're very confident we've put them in the right basket."

He said that NCR was chosen to provide technology based in Superquinn's own criteria based not on price, but on quality and uptime.

"The more we looked the more happy we became," he said. "I have to say that NCR won out by a long mile."

Companies who become Centers of Excellence must be technology-driven, innovative and have a good reputation worldwide, Maton said. NCR originally supplied Superquinn with ATM machines for its TUSA in-store bank.

NCR's vice president for retail solutions Alberto Camuri, who worked with Superquinn on the deal, is also pursuing other Centers of Excellence in central and southern Europe.