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Stores getting smarter by relying on tech to drive sales
By Jeannine Aversa
Associated Press
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WASHINGTON — Red pumps. Silver slingbacks. Bronze flats. Black suede boots. Size 7½, please.

Without leaving the customer’s side, Macy’s sales associate Felicia Dixon uses a small, handheld electronic device that essentially summons the shoes in the right style, color and size, from the stockroom. It is not quite magic: A clerk in the backroom receives the request electronically and brings out the merchandise.

The shopper does not have to hunt around for a clerk each time she wants to try on a different style or needs a different size. Better service means happier customers, and that could lead to more sales.

At least that is the hope, from the retailer’s perspective.

Stores spend $34.5 billion a year on all kinds of technology, from the cables and routers behind-the-scene to in-store devices such as price checkers, self-service checkout stations and electronic kiosks for customers, says the National Retail Federation.

With older equipment needing to be replaced, spending for high-tech upgrades is expected to increase, the federation says.

Some workers might view technology such as self-checkouts threatening their job. Other devices — electronic price checkers or Macy’s shoe locator — might make their jobs easier.

Still, the number of jobs in some segments of the retail industry is diminishing, and economists believe that technology has played a prominent role.

An Associated Press analysis of Bureau of Labor Statistics’ employment data found that department stores have slashed 247,100 jobs since June 2001, when employment in that sector peaked. The number of jobs at food and beverage stores has fallen by 118,800 since April 2000.

Technology that allows companies to produce more goods or provide service to their customers with fewer workers or with their current staff is a factor in some job losses, economists say. A second is consolidation when a company buys out a rival or merges with a competitor.

“No local union has ever reported laying off people because of self-scanners. We installed these machines and now the direct result is X number of jobs have changed,” says Jill Cashen, spokeswoman for the United Food and Commercial Workers International Union, whose members include workers at grocery stores, department stores and other retailers.

Productivity — the amount a worker produces for every hour on the job — has grown at a faster rate in the retail industry than in all industries across the economy. Had this not occurred, there now would be nearly 4.5 million more jobs in retailing, according to Mark Zandi, chief economist at Moody’s Economy.com. “Arguably it has been hard on workers,” Zandi says.

Yet companies say a reduced work force is not the main goal of technological innovations.

At the Macy’s in Arlington, Va., store manager Paul Gassner says extra workers were hired when the shoe locator technology was brought to the women’s shoe department some two years ago. He said it has “significantly improved sales” and proved to be a big time saver. It lets sales associates such as Dixon get shoes on customers’ feet more quickly by saving employees the time of having to keep running back to the stockroom.

It took Dixon a week or two to master the device. Now it’s easy, she says.

More familiar to customers is the self-checkout.

The retail industry spent $380 million on installing new self-service checkout units in 2006 and is expected to rise to $457 million this year, says Greg Buzek, president of IHL Consulting Group, a research and consulting company that specializes in technology for the retail and hospitality industries.

Making the investment in self-checkouts may not necessarily yield a big payoff for the retailer.

The average self-service checkout machine costs $21,000 and has a typical life of five years, Buzek estimates.

In contrast, a regular cash register costs on average $4,000 and has a longer life — typically nine years, Buzek says. Often, the self-service checkout machines are clustered in a group of four at stores, with one store clerk designated to oversee the self-checkout squad, he says.

The average wage of a grocery store cashier is $19,060 a year, according to the Labor Department.

Experts say the appeal for companies of self-service checkouts is to free workers in the store to do other tasks and to give retailers more flexibility in scheduling workers where and when they are most needed.

Stores also are increasingly interested in ways to use technology to provide more information about products or other things while shoppers are in the store.

One example is the interactive kiosk. Through a live video link, a customer can ask an expert about equipment needed to install a home theater system or how to connect computers at home via wireless routers or what kind of hiking equipment or kayak to buy.

Hogan says that in the future, shoppers might be able to pay for their purchases by touching a finger to a screen or electronic pad, which would match a digitally stored imprint of the finger, and typing in a personal identification number.

Take a look
Macy's sales associate Victor Coronel, right, scans the bar code on the bottom of a boot Stephanie Sams is interested in trying on at Northpoint Mall store, Nov. 2, 2007, in Alpharetta, Ga. The information from the scan is wirelessly sent to the stockroom where an expediter locates the shoe, allowing the sales associate to help on the floor longer. (AP Photo/John Amis)
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