Magazine article Marketing

Checking out the Goods: Scanning Systems Are Serving an Increasing Range of Roles Other Than Just Product Sales

Magazine article Marketing

Checking out the Goods: Scanning Systems Are Serving an Increasing Range of Roles Other Than Just Product Sales

Article excerpt

CHECKING OUT THE GOODS

Retailers are discovering the ever-widening range of benefits from scanning systems. Electronic point of sale (EPOS) systems were initially seen as simply a more efficient checkout method. Useful by-products now include inventory-keeping, ordering of products and item-by-item profit calculation.

Scanning has opened new horizons in the speed, scope and accuracy of market research. This is both in generic research - like that of researchers Nielsen, with its Homescan system, and AGB Market Information, with Superpanel - and in-house research by retailing groups to spot early trends in product sales, test the effectiveness of merchandising techniques and promotions and to determine the locations of new stores. EPOS-based systems can also build customer databases.

Nielsen and AGB track products sales, mainly in the food sector, by installing barcode scanners in a geodemographically weighted cross-section of homes. Purchases are "wanded" by the families' shoppers. These data, used to guide sales volumes and trends, are collected, consolidated and analysed via telephone modem by central computers.

Retailers can themselves replicate this type of research with information from the point of sale rather than from the purchaser's home.

Another area of development is in EFTPoS (electronic funds transfer at point of sale), where bank debit cards are scanned to pay for purchases. Sainsbury's claims to be the leader here, with EFTPoS accounting for 1 bn [pounds] - about 20% - of its turnover, used by 700,000 customers a week at nearly 300 stores.

Although Sainsbury's has yet to hold individual customer databases, it can at least theoretically build an analysis of card-holders' buying habits from EFTPoS data. In the US such information is frequently sold on to database companies.

"We are aware of the uses to which scanning is being put in the US and we are considering them," says a Sainsbury's spokeswoman. "But at the moment we are not proposing to use the data for electronic marketing. It is very much for our own assessment of what we are selling and what we might sell, rather than specifically targeted marketing."

Liz Mandeville, head of research at the Brighton-based RMDP consultancy, which specialises in applications of computer-based technology in retailing, explains: "With a computer recording details of what has been sold, at which till and at what time, the information can be used, for instance, to control stock and make decisions about locations and staffing levels."

She notes increased use of hard-held portable terminals, speeding up inventory-taking and, combined with the sales data, giving information on "shrinkage".

Barcodes on outer cases enable products to be tracked from manufacturer to point of sale.

At most supermarkets, ordering has been quickened from weekly to daily and multidaily cycles. "The large supermarkets can place several orders a day because they know exactly what they have sold and what the trends are," says Mandeville. Sales of some products, such as soft drinks, are related to weather and ordering can be linked with forecasts.

The quality of barcodes is being improved to reduce failure to read by the scanners. …

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