This Week's Herman Trend Alert

Leadership in Normal 2.0
 

  The Herman Trend Alert

September 13, 2000

Labor Shortage May Alter Retail Stocking Systems

107 Days until January 1, 2001

As the labor market continues to tighten, employers seek opportunities to apply technology to perform tasks traditionally performed by humans. Robotics are commonplace in manufacturing, administrative processing has been automated by computers, and supermarkets employ technology to streamline customer check-out.

As we think about the dance between labor and technology, we see another interesting possibility. A major change may be in our future . . . and not far away.

Years ago, before retailers moved into self-service, almost all merchandise was behind the counter. Customers would tell clerks what they wanted, and the clerks would go to the shelves to gather the desired items. Some stores, like auto parts retailers, still operate this way. Retailing changed when customers were invited to wander through the aisles and select their own purchases. Clerks still stocked the shelves, but shopping efficiency (and impulse buying) improved as customers filled their carts themselves. This system works well today, with customers taking their choices to check-out counters for clerks to tabulate and package. Every item sold is marked with a bar code that indicates the price. The check-out process is changing with technology (see last week's Trend Alert).

Stocking all those shelves is labor-intensive, sometimes annoying to shoppers who have to weave around shipping cartons in the aisles, and requires clerks to continually straighten stock so merchandise is attractively displayed. With the difficulty of hiring, training, and retaining enough workers, grocers are challenged to keep up with the tasks.

Web-retailers don't worry about stocking display shelves. Their focus is on well-organized automated warehousing -- using technology to efficiently and quickly pick and pack products by bar code. Using this technology, brick-and-mortar retailers could display one package of each item on "shelves" for shoppers to see, but keep the inventory in a warehouse area. Shoppers will carry bar-code wands instead of pushing baskets. As they scan items they want, the automated warehousing system will pick them from inventory and send them to the check-out area. Costs will be tabulated automatically, eliminating the need for check-out clerks.

This design may be the next generation of shopping.

Trend Alert is a weekly electronic trends bulletin produced as a public service by The Herman Group and the Workforce Stability Institute, Greensboro, NC. Trend Alerts are written by Roger Herman and Joyce Gioia, co-authors of LEAN & MEANINGFUL: A New Culture for Corporate America, (390 pages., hardcover, Oakhill Press, 1998) available in bookstores at $27.95. Also available through amazon.com.


Comments from our readers:

You wrote in your 9/13 Trend Alert: "Shoppers will carry bar-code wands instead of pushing baskets. As they scan items they want, the automated warehousing system will pick them from inventory and send them to the check-out area."

Such a supermarket was tested about a decade ago, al beit with a clipboard and pencil. I believe the supermarket was in France. The idea failed primarily due to the lack of a tactile connection between the buyer and the object. This gap was a barrier that the technologists failed to anticipate. In America, Service Merchandise operated in the same fashion and was more successful.

The buyer in a supermarket is a mythical being called a "housewife" which has not yet been modeled by technologists. Possibly there is not a technologist alive today that thinks like this mythical being and only a few who even believe in the being's existence. Service Merchandise serves a broader cross section of buyers.

Perhaps there is a futuristic university or technical group somewhere that developing a computer model of the "housewife", a model that can spark a future trend.

Dear Herman Group,

I recently signed up for your Trend Alert, on the kind suggestion of our beloved VP of Human Resouces. I decided to pass along some thoughts about this current one. Let me know what you think. Thanks!

There are rich ideas in what you suggest here. At a minimum, it points out that there are many customer groups in our society, and there are means-to-the-end that work well for some and not at all for others. I'm quickly reminded of the rise and fall of one retail channel that had parallels to what you suggest - the catalog showroom. There was interest in this arena particularly when unique products were offered at value prices. There was a compensation for the added dimension of the time of having the warehouse pick your order. There were glitches in the process, largely labor-related, as well as out of stock scenarios. But as the product mix became homogenized and price parity became the reality, this channel fell in demand to where it was impossible to recover.

One factor that all these scenarios must seriously consider is the economic resource of Time. Today, a large sector of our society has a higher value on time expended than price, assortments, and even ambiance. It will be interesting to witness how your ideas suggest changes to technology, labor, and shopping paradigm.

Shirley Hoffman


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