Through a special arrangement, presented here for discussion is a summary of a current article from Supply Chain Digest.
Since May of 2010, Kroger has been testing a revolutionary new approach to point of sale and retail checkout that involves high-speed imaging of bar codes or other identifiers to reduce its own labor costs and speed shoppers through the checkout process. The technology, Advantage Checkout, developed with Fujitsu, was on display at the NRF conference.
The heart of the system is a "scan tunnel" similar in a sense to tunnels some airlines have tried to deploy to manage the tricky job of scanning baggage bar codes that are oriented in every possible angle. A battery of imaging scanners on all sides not only read bar codes, but use optical character recognition (OCR) technology to read letters and numbers and potentially to capture a picture of the product as it goes through the tunnel.
As an example of how the system can work, if there is a bad bar code on an item, the imager using its OCR capability may still be able to identify the product based on the printed UPC number below the actual bar code. A display at the end of tunnel tells a store operator when a product was "seen" but not identified, where quick manual handling of the item would take place. After a shopper's items have all been placed on the cart, a red bar similar to the separators commonly used today to indicate when one order ends and the next begins is placed on the belt. When the scan tunnel sees that, it notes the order is complete and the POS systems produces a total bill ready for payment.
Current read rates in the pilot program are 98.5 percent or more.
Kroger said the system can reduce store labor by further empowering customer self-checkout. Current self-checkout systems in grocery stores are generally used by shoppers with a relatively small number of items but Advantage Checkout is designed to be used for large or small volumes of items in a shopping cart.
The high speed of the system -- the belt inside the tunnel is moving at rapid pace -- means the system can dramatically improve the processing time for a given customer through checkout. Customers or a store associate can rapidly place products on the belt and off they go through the tunnel as the cart continues to be unloaded. It is clearly capable of processing many dozen of items in a short period of time.
"The key is reducing the number of product touches," Kroger CIO Chris Hjelm told SCDigest. "How can we eliminate billions of touches a year by both our customers and our associates? That was a key design goal."
Now, Kroger has to decide if, how and when it will actually roll the Advantage Checkout system out to its own stores -- and potentially make the technology available to other retailers. Kroger holds a number of patents related to the system. The design also assumes that item-level RFID won't be coming to the the grocery industry any time soon.
Discussion Questions: What's your take on this Kroger Advantage Checkout system? Do you think it can be successful in mass deployment? Should or will Kroger make it available to others any time soon?
What's the likelihood that checkouts in the near future will somewhat resemble Kroger's Advantage Checkout system?