News

Leveling the playing field

January 25, 2006

This article appeared in the Retail Self-Service Executive Summary, Winter 2006.

While grocery shopping trends in recent years have perhaps favored the big-box store, the place where someone can get new tires for the car while picking up milk and juice for the evening, smaller retailers are far from giving up the fight. But the economy of scale at work in this battle means the small player needs to maximize efficiency at every point in the operation.

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The neighborhood grocer

Sunset Foods operates four neighborhood supermarkets in affluent suburbs of Chicago. It's a family-owned business, and has been since it first opened its doors in 1937.

According to vice president and general manager Frank Lomoro, efficiency is crucial, as is keeping customers thrilled to be shopping at his store. The recent addition of "line-busting" self-ordering kiosks at his stores' delis has helped with both of those goals.

"Our delis are very busy and the kiosk gives our customers another option so that they don't have to wait in line as much," he said. "The customers come in the store and the first thing they do is enter their deli order, since our kiosk is right near the entrance. Then they continue their shopping and pick up their deli order on their way to the checkout; it works great."

Lomoro said that deli sales have definitely increased since the machines went in, not only because of efficiency gains but because average order size is larger. "I also think that our efforts in the deli are better organized since we have someone in the kitchen dedicated to filling kiosk orders, and that gives our deli clerks more time to interact with the customers that prefer to place their order the traditional way," he added.

Sales, marketing opportunities

Juan Perez is president and chief technology officer of Adusa Inc., the company that designed and installed the system for Sunset Foods. He said that, several years ago, his company did original research at stores in California using their self-ordering system and found that average order size grew from 25 percent to 65 percent.

Since many small grocers are boutique efforts in one way or another, usually emphasizing one or more particular specialties, self-service has the added benefit of doing most of the heavy lifting when it comes to product selection.

"I can tell you that Custom Filtering, which is a feature of our software that enables the retailer to give the kiosk customers an easy way to find specific product types - such as low carb, heart healthy, kosher, etc. - can drive additional sales," Perez said.

"Many customers have told us they're really thankful that we've put the kiosk in," Lomoro said. "The real story, I think, is in the growing number of customers that are using the kiosk and how it's just become second nature for them. For us, if it makes the customers happy and increases the department's sales, what's not to like?"