Jetsons Have Nothing On This Supercenter
By George Anderson
A piece in the Arizona Daily Star says AutoCart, a planned 130,000 square-foot drive-through supercenter to be built in Tucson, Ariz. or Albuquerque, N.M., sounds as if it were straight out of an episode of the Jetsons.
The idea behind AutoCart is to make shopping more convenient by giving consumers the option of placing an order online or via fax and picking it up. Customers will also be able to drive to the store and order through a wireless touch screen that attaches to the steering wheel.
When orders are placed, workers pick and pack the selections and move them along a conveyor belt until they reach the checkout destination. The creators of AutoCart say they will be able to help shoppers fill a two-week major shopping trip order in 12 minutes.
AutoCart will sell a wide range of goods, including groceries, hardware and office supplies. The company expects to be able to process up to 600 cars per hour.
AutoCart’s chief executive, CEO Michael Saigh, said it is looking at medium-size cities such as Tucson to initially test the concept because it did not want to be deluged with more customer traffic than could be handled.
Mr. Saigh is bullish on his and AutoCart’s prospects. “The technology exists, and the mood in America is ripe for this concept,” he said.
Not all share the AutoCart CEO’s faith.
Author, media personality and industry analyst Phil Lempert said, “I can see a drive-through convenience-store kiosk working well but not this mammoth thing.”
Moderator’s Comment: Are consumers ready for AutoCart? What will it take for it to succeed? –
George Anderson – Moderator
12 minutes is a long time to sit in a drive thru line. Seeing how often things get screwed up in fast food drive thrus, I just can’t imagine this process will be a smooth one that many shoppers will want to sit through. And, I don’t think 12 minutes is a realistic number. It’s a cute idea, but is going to require major fine tuning. Dairy Barn on Long Island had a similar concept years ago and executed it well, albeit with a convenience store type assortment – not sure if they are still in business or why it didn’t spread.
I think the main take-away from this business case will be that it works for specialty retail but not general retail. It works for fast food, liquor stores, drug stores, and banks, but once you cross a certain line of complexity, people are going to want to be able to slowly make purchasing decisions one at a time – the way they do when shopping aisles of a store with a cart.
I also don’t see it working well with items above the commodity level.
To perform to expectations, this system will have to be backed up by the fastest, most inexpensive automatic picking and retail replenishment system available. They need to talk to the folks at Alert Innovation, which could provide the perfect accompaniment.
Target Corporation tried a variation of this concept in the early 70’s and it failed. If it did not work for Target, I find it hard to believe a new start-up would be successful.
Here in Tucson, we have a car culture. On the hottest summer days, it may be tempting to pull into a covered portico and have service people load your order into the back of the SUV, rather than enduring the “devil’s anvil” effect on the walk across the parking lot.
I see AutoCart as an online grocery fulfillment center minus home delivery. Location and reach will be key factors. How far will people drive to pick up their orders? This is a city of boulevards and traffic lights with one freeway slicing along its southwest corner. A central location with good road access will be pricey.
While I applaud Mr. Saigh’s outside-the-big-box thinking, I also believe he should carefully investigate the potential trading area footprint for his concept before he invests his family money in brick and mortar.
Have to respectfully disagree, SleddCo, on the impulse purchase issue. Online retailers have gotten quite sophisticated with their impulse offers, and not necessarily by using those obnoxious pop-up ads. (Example: Amazon’s recommended books feature.) Additionally, one would assume that AutoCart would make use of historic purchase information to make this (potentially) much more effective than the generic offers on end caps and at checkout in a traditional supermarket.
What I can’t figure out is how they intend to manage the backup of shoppers who use the touch screen on-premise to place orders. I’ve stood in line at relatively simple deli ordering kiosks, behind shoppers who take 5 minutes to click their way through an order for 1/2 lb. of salami and some beet salad. How long will they take to enter their entire grocery list…and general merchandise items, as well…? Only thing I can imagine that would work would be tangential parking bays for customers to use while punching in their shopping list.
Sounds like a good concept but I think it is a failure waiting to happen. As everyone else has already said, perfection is extremely important and almost unattainable. 12 minutes is an eternity, and with one screw up, you can kiss that customer goodbye.
The other issue is the revenue the company will lose by not having the customer in their store. A large amount of all purchases of items that have a substantial gross profit margin for a store (i.e.; Candy, Magazines, Lighters, Batteries) are all impulse buys. You don’t have them on your “shopping list” but, when you see them, you realize you want them. By ordering online, or on a touch screen, you won’t see these items, therefore you won’t buy them, and the store won’t profit as they would if you had actually come in to shop.
Unless, when ordering, they have a bunch of advertisements popping up, which will also cause major problems for customers.
I don’t feel that we (the public and consumer) are ready for this, and probably won’t be for a while.
Sink or swim, it’s always nice to see a new retailing concept. Personally, I’m skeptical about it, but I’m also confident that other retailers will learn a thing or two from it that will improve their own businesses.
Just what we need … a way to sit on our behinds for even more of the day, and all in the name of “convenience”.
Customers won’t wait an average of 12 minutes. And then comes the real test – the consumer’s skepticism the order has been filled correctly. If they move the ordering process to being on-line, they may have a chance, but all it will take is for 10% of the orders to have a single error and all the profit will be erased. Having a 10% error factor is not out of the question. All anyone has to do is think of the % of times fast-food drive-throughs mess up orders…and those involve far less SKUs than this process.
It is an interesting novelty idea, but I doubt that it will prove to be very practical or achieve enough volume to be viable. 12 minutes sounds fast, but seems like an eternity if you are just sitting there waiting for it. The key will be, as others have suggested, is to then be able to use that time doing something else that is either productive or enjoyable. Shouldn’t be too hard to do, but will potential customers make that connection? I’m guessing not enough.
Auchan has been testing a similar idea in Northern France called Chronodrive. Place orders online then pick it up at a designated drive through area at the store. Or you can place an order while you’re there via touchscreen.
The end result may be the same. Will customers wait?
Great idea and on target with the top trends. Convenience is big and getting bigger. Just think: you can shop for groceries and sundries, eat a quick meal, do your e-mails and phone calls on the BlackBerry and not even leave your car! Many will see this as a real time saver. The keys are quality and service. They will need to get the orders right and be pretty timely or have something to keep people’s interest – maybe a big screen TV you can watch while waiting. Many of these elements are already working from drive through Convenience/beer stores, quick oil changes, etc. And consumers are liking to not have to deal with store personnel and using automatic checkouts. So I give it a big thumbs up and I’m ready to go buy stock in the Company! It is nice to see something refreshing out there beside Wal-Mart.
“…a blessing for working parents who don’t wish to drag tired, hungry children through a store”???!!! Sure, keep them cooped up in the car instead. Puhleese. I’d love to know what happened to his other business ideas – perhaps they self-destructed along with the CDs and videos.
The way I read the article is that 12 minutes is for the whole process, start to finish, not just the post-order wait. Judging by the length of time it takes to place a grocery order online, and then adding the time it would take for the picking and packing element, that sounds highly optimistic. The more you order, the longer the whole operation takes.
The big question has to be what you do between finishing the ordering process and collecting at checkout. Not possible to achieve this without some sort of time lag. And I’m not sure where Michael thinks the quick meal is going to come from – bring your own picnic when you shop? Or perhaps you can be given a television screen to use between the end of the shopping and the departure time. I’m not sure how he thinks shoppers would be able to place their orders and check their emails simultaneously.
Also, what happens to the people waiting behind the one whose order has gone wrong? Not that you can check the order until you get it home of course.
If this was just a pickup line for a pre-ordered service it might stand a better chance but arriving, ordering and then picking up just doesn’t grab me as viable at this moment in time. Certainly not on the scale described.
AutoCart will be successful if it can build brand loyalty by creating an effortless ‘buying’ opportunity versus a time interested ‘shopping’ experience.
The most important part of the entire supply chain may be the point of delivery to the customer in the vehicle. These should be the most trained and courteous employees in the store.
Their ability to interface with customers, handle any coupons, MIRs or out of stock substitutions with intuitive and like branded products may generate huge customer satisfaction and shopper loyalty.
In response to Al McClain re: Dairy Barn. Surprisingly, they’re still in business. 51 stores on Long Island.
http://www.dairybarn.com/index.html
http://www.microsoft.com/resources/casestudies/CaseStudy.asp?CaseStudyID=16091