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Case Study: Kroger deploys Irisys Queue Management to achieve faster checkout and higher sales – without adding labor expense

  
  
  
  
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The Kroger Co.’s faster checkout initiative was recently ranked No. 3 among the InformationWeek Elite 100 listing of the top business technology innovators in the United States. Kroger’s QueVision technology is powered by Irisys intelligent Queue Management solution. It uses infrared sensors and predictive analytics to arm store front-end managers with real-time data to make sure registers are open with customers need them. 

The solution, across the Kroger family of stores, has reduced the time a customer waits in line to check out, on average, from four minutes before QueVision to less than 30 seconds today. As follows is a case study of the roll-out of the Irisys Queue Management solution across Kroger’s 2,400 locations.

Overview

Industry sector: Retail, grocery
Geography: USA
Service solution: Intelligent Queue Management
Project size: Over 2,300 locations

Organization

Headquartered in Cincinnati, Ohio, USA, and established in 1883, Kroger is the USA's largest traditional grocery store chain, its second-largest general retailer based on revenue, and the world’s fourth-largest retailer.

Business Issue

A key component to Kroger’s business strategy is a “Customer First” commitment that is central to guiding every strategic decision. As part of this effort, Kroger felt a better checkout service would reward loyal customers and differentiate its service delivery from competing national discount chains and regional grocers.

Kroger decided to move from a 1+2 service commitment (1 customer being served in the checkout with 2 customers waiting in line) to a 1+1 service level (1 customer being served in the checkout and no more than 1 waiting in line).

In deciding this commitment, Kroger also assessed the level of additional cashier labor that would be required in-store to deliver 1+1. At the time, company officials anticipated they would need – and were willing to pay for – more cashiers if it reduced customer wait time at the checkout.

Solution

Irisys met with Kroger in 2007 and began trialing the Queue Management solution in 2008 with its IS&S Department to prove the technology. Once the technology’s accuracy and efficacy had been validated, Store Operations engaged in a four-store trial.

Initial results showed that Kroger, using the Irisys Queue Management system, could deliver a required 85% 1+1 service level with existing, already scheduled cashier labor.

To prove the system further, Kroger progressed to a 19-store trial in Toledo, Ohio, in 2009. The results again showed the goal improvement in checkout service could be achieved with Irisys Queue Management system – and, again, without deploying additional checkout labor.

Moreover, the response from customers in Toledo was extremely positive and led to a noticeable improvement in customer satisfaction scores and uplift in sales. Kroger successfully trialed the Queue Management solution in two additional regions. In all of its regional trials, Kroger consistently identified improvements not just at the checkout – but in customer loyalty, shopping frequency, overall customer spend, and significantly increased sales.

While a defined ROI measurement underpinned Kroger’s business justification – i.e. a single capital investment in the Irisys system versus an ongoing revenue investment in additional cashier labor – the real driver behind deploying the Queue Management system was to improve checkout service.

Kroger commenced a rollout to all stores in 2010. The rollout of the system was accompanied by an in-store marketing campaign - advertising a “Faster Checkout at Kroger” – that extended externally via TV, radio, and print. Kroger branded the system internally as QueVision and began publicizing its results in 2013.

Business Benefits

Rodney McMullen, Kroger President and COO commented during Kroger’s 2nd quarter 2012 earnings conference call: “Our market share gains are a result of our investments in all 4 keys of our ‘Customer First’ strategy. People often talk about investments we make in price, but there are many ways we have invested in our non-price keys, people, products and shopping experience, to strengthen our connection with customers in our stores.

“For example, over the last several years, we've set out to improve the shopping experience by reducing customer wait time at checkout,” he said. “Customers have told us they do not like waiting in long lines. Based on that feedback, we developed a solution that has reduced the average amount of time a customer waits in line to check out to about 30 seconds today compared to around 4 minutes in the past. Our customers tell us they noticed the difference, and we are delivering a shopping experience that makes them want to return.”

Getting shoppers through checkout as quickly as possible is key to building customer loyalty and reported by Kroger as one reason earnings were up 9.6% in the three months ending May 25, 2013, compared to the same time a year ago.

Kroger Chairman and CEO Dave Dillon cited “inspired, Customer First service” for strong financial results including earnings of $481 million in the quarter ending May 25 - the 38th consecutive quarter of profits for the retailer’s continuously operating stores.

And Marnette Perry, Senior Vice President of Retail Operations, said: "The technology enabled us to execute at the front of the store without that additional [labor] expense. It's remarkable that we've been able to improve execution as much as we have without a big price tag.”

“Nobody likes to wait in line,” she said. “If we wanted to develop loyalty from our customers, we really had to respect their time and improve the checkout experience.”

Since the technology was deployed, Kroger’s score on customer-satisfaction surveys has improved 42 percent on the speed of checkout, Perry said. “There are 7 million shoppers at Kroger stores today – we’ll save them 25 million minutes today.”

Kroger executives said they learned something surprising from Kroger QueVision data that helped them boost certain orders. The system showed more customers than Kroger realized bought a small number of items in the morning and at lunchtime – and that express lanes would back up.

So Kroger added 2,000 new express lanes to its stores nationwide, which it credits with growing the number of small orders over the last two years. 

And Kroger cites additional benefits besides happier customers. For example, the technology has helped boost sales at smaller urban stores with limited parking space – because customers get in and out faster, they free up parking spaces more quickly.

And though company officials originally anticipated they would need – and were willing to pay for – more cashiers if it shaved customer wait time, the cost of staffing did not rise. Irisys Queue Management technology is so smart, it makes scheduling more efficient.

 

Download Queue Managment Case Studies

Who Are You Behind in Line? Avoiding the Supermarket Stereotypes

  
  
  
  

We’ve all been there – the long line, packed self-checkout, and slew of slow shoppers.

Grocery stores have become synonymous with shopping stereotypes, so much so that The Huffington Post recently put together its list of the “11 Worst Types of People to Get Stuck Behind in Line.”

Among the list include the “couponer,” the person with 40 items in the express lane and the talkative shopper. But fortunately these scenarios – and shoppers – can be avoided with Irisys’ grocery queue management solution.

Installed in more than 4,000 of the world’s busiest supermarkets, Irisys’ intelligent Queue Management solution delivers actionable traffic data that creates shorter checkout lines – and faster checkouts – to deliver the ultimate customer experience.

Thermal people counting devices at entrance/exit doors and over checkout lanes unobtrusively identify shoppers by sensing their body heat. This data is then utilized to predict the number of staffed checkouts needed in 15- and 30- minute intervals.

Ask us how Irisys’ Queue Management solutions can help enhance the shopping experience for your customers – building strong customer loyalty, and breaking the stereotypes.

Big Data: Enhancing Customer Experience in Real Time Builds Brand Loyalty

  
  
  
  

Delivering the ultimate shopper experience increases customer loyalty. And though retailers have personalized customer service for decades, they have primarily been limited to using historical data to make critical in-store decisions.

Retail Customer Experience explores why retailers should utilize real-time and historical data to develop effective service-delivery strategies that keep shoppers returning for more. Real-time data gives retailers the insight they need to effectively adjust store layouts; optimize staff scheduling; reduce queue wait times; and gain in-depth knowledge of conversion rates.

When retailers don’t truly grasp the fluctuations within a variety of performance metrics, they may be tempted to drop prices rather than to change store and service strategies – a knee-jerk practice that can become a race to the bottom, according to Retail Customer Experience.

The world’s leading retailers recognize the value of real-time data, which is why they utilize Irisys’ People Counting and Irisys’ Queue Management solutions.

Irisys’ most recent innovation – the Gazelle intelligent analytics platform – unites modern design with a powerful software suite, providing capabilities with incredible valuable. Its WideTrackerTM feature delivers up to 16 counting lines and provides greater behavioral insight in spaces where video and legacy systems are challenged – giving retailers insight on how to create better traffic flow and increase sales through higher conversion.

And with more consumers comparison-shopping online before heading to their local stores – or comparison shopping via smart phones while they’re in a store – traditional retailers must be equipped with timely information that drives superior, consistent customer experiences.

Learn more about Irisys’ technology by downloading our People Counting case studies and Queue Management case studies.

And ask us how the world’s No. 1 supplier of People Counting and Grocery Queue Management solutions can help you build better customer insight and stronger customer loyalty through that increases sales.

Amazon Prime Ups Membership Fee – and Opportunities for Traditional Retailers

  
  
  
  

Some consumers did not react well to Amazon’s announcement that the cost of its annual Amazon Prime membership fee would jump from $79 to $99 this spring. The New York Times reports some shoppers don’t think the perks of the program – including streaming video content, e-books, and two-day shipping (that some say takes longer than two days) – are justified by a higher price.

It’s the first membership-fee increase since Amazon launched the service in 2005. And at least one online retailer didn’t wait to reach out to customers who may flee – ShopRunner, according to The New York Times, announced it would waive its annual $79 fee for Amazon Prime members for one year.

Traditional retailers may consider utilizing the opportunity to appeal to some of Amazon’s 237 million active customers. Those who offer online ordering with in-store pick-up may be particularly poised to market convenience and speed to potential customers – and without the additional expense of an annual membership fee.

But are retailers truly prepared to impress new customers if their stores don’t deliver optimal staffing levels, ample product, fast checkouts, and a best-in-class experience? They would be with Irisys People Counting and Irisys Queue Management in place. The world’s leading retailers utilize these solutions to deliver superior customer experiences that make great first impressions and drive loyal customer relationships.

Its most recent innovation – the Gazelle intelligent analytics platform – unites modern design with a powerful software suite. Its robust capabilities can be incredibly valuable in determining whether responsive marketing strategies – like timely promotional pushes to attract former Amazon Prime customers – are effective in achieving higher traffic.

Its WideTrackerTM feature delivers up to 16 counting lines and provides greater behavioral insight in spaces where video and legacy systems are challenged. And sequential line logic enables data analytics like store penetration, customer / kiosk engagement and customer flow and walk-through.

And Irisys’ Queue Management solution delivers the intelligence that makes checkout lines shorter and faster for customers. Kroger has credited Irisys’ Queue Management solution for drastically reducing its customers’ checkout times – from an average of four minutes down to just 26 seconds.

Take action today. With Amazon opening the door for online retailers to evaluate – and increase – premium pricing strategies, retailers that operate traditional stores should be prepared to take advantage of potential customer gains. Contact us, or explore our People Counting case studies and Queue Management case studies – and you’ll see why Irisys is the world’s No. 1 supplier of People Counting and Grocery Queue Management solutions.

Study: Customers Walk Out of Stores, Abandon Purchases when Lines are Long

  
  
  
  

Americans will abandon a checkout line and leave a store without making a purchase after eight minutes of waiting in a checkout line.

British shoppers won’t even wait around that long. They’ll walk out after just six minutes.

These are among the findings of a new Omnico Group study, which also found 77 percent of Americans are less likely to return to a store where they experienced long checkout lines.

These findings aren’t surprising to us at Irisys, the world’s No. 1 supplier of grocery queue management systems. Irisys’ intelligent Queue Management solution is installed in more than 4,000 of the world’s busiest supermarkets – making checkout lines shorter and faster for millions of customers.

Mass retailers are pulling out as many high-tech stops as possible to remain competitive and keep their customers happy and loyal – especially in the grocery industry, where profit margins are incredibly slim.

Click here to find out how Morrisons and Tesco enhanced their service-delivery strategies using Irisys’ Queue Management solution.

Click here to see the type of powerful – and positive – buzz America’s largest traditional grocer, Kroger, generated when it deployed Irisys’ Queue Management solution nationwide.

Or click here to Contact Us for more information.

Make 2014 Count: Industry Group Forecasts 4.1% Retail Industry Growth

  
  
  
  

The National Retail Federation projects U.S. retail industry sales will increase 4.1 percent in 2014.  That growth – higher than last year’s 3.7 percent – presents a timely opportunity retailers can seize to grow and, more importantly, sustain a wider base of loyal customers.

While consumers are out exploring their favorite shopping centers and malls, they will also be out exploring retailers they've never visited before with most returning to those that deliver the best service and a positive experience the first time and every time.

But consumers have increasingly high expectations about in-store shopping. While twenty-one percent of U.S. shoppers who responded to a recent survey by Accenture plan to make more purchases from physical retail stores, they also want those stores to offer the same convenience of online stores – meaning products are well merchandised and easy to find; price points are competitive; and checkout is simple and fast.

For traditional retailers to deliver that same level of efficiency, both company-wide and store-specific operations must be addressed. This process often begins with obtaining actionable traffic data that is utilized to create the ultimate experience for your customers – which includes delivering superior service throughout the store and ensuring checkout is fast

Both of these elements encourage consumers to spend more time browsing and seeing what a store has to offer, which can lead to larger purchases and significant revenue gains. 

Contact us to learn more about Irisys' intelligent People Counting and Queue Management technologies. And be sure you're prepared to maximize new relationships with new customers now – and in the future. 

Experts Cite Super Service as Key to Nordstrom and Kohl’s Being Named America’s Favorite Fashion Retailers

  
  
  
  

One is known for high-end fashion and accompanying high prices – and the other for affordability. But they’re both committed to delivering consistent, high-quality service to their customers. And that’s why a recent Market Force Information study found that Nordstrom and Kohl’s, respectively, are America’s No. 1 and No. 2 fashion retailers.

In addition to earning the top overall spot, Nordstrom also took the “Service” category – followed by Banana Republic, American Eagle, Express and Dillard’s.

The survey studied more than 4,000 consumer opinions about specific fashion retailers, and then took into consideration each chain’s number of physical locations to calculate weighted results.

The ability to deliver superior customer service is a crucial component to defining consumers’ perceived experience with a particular retailer – and building a loyal bond that brings customers back.

But the failure to deliver on customer expectations can cause retailers to flounder. Take Radio Shack, for example. Once regarded as a leading consumer electronics retailer, it now falters in its ability to connect with customers. A recent survey of 10,000 consumers by Temkin Group Research ranked Radio Shack dead last – for the third consecutive year – in its customer experience.

Radio Shack also scored the lowest across consumers’ perceptions of “functional,” “accessible,” and “emotional” components of service delivery.

Particularly in today’s competitive landscape, it’s crucial for retailers to know as much as possible about their customers. That’s why analytics – from loyalty programs to targeting – are becoming even more powerful business development strategies. But such programs assume the in-store customer experience is strong enough to make a shopper return to cash in on special offers.

That’s why retailers should also use analytics to understand how consumers interact with their stores – from the moment they walk through the doors until they check out. Thermal people counters can accurately and unobtrusively capture the analytics that quantify a store’s actual traffic patterns – including peak and low-time trends.

The same data can also help feed an intelligent checkout management solution that helps improve staff scheduling and deployment. It even predicts the number of staffed checkouts needed in 15- and 30-minute intervals.

With that information, managers can adjust and allocate front-end and other staff according to real-time information – and help ensure each store delivers the service that nurtures healthy, long-lasting customer relationships.

Capture Unprecedented Door-to-Door Analytics

  
  
  
  

Retailers can now unobtrusively detect shoppers’ patterns and capture an unprecedented door-to-door view of their behavior patterns thanks to a partnership between Irisys and WirelessWERX, a leader in in-store behavioral analytics. The result is one of the most complete depictions of retail shopping behavior ever provided.

WirelessWERX_Irisys Joint Solutions Graphic

 

Lack of Online Grocery Options Drives Focus to In-Store Customer Service

  
  
  
  

For today’s consumers, grocery shopping primarily remains an in-store task. The lack of online options drives customers into physical locations, making service a key differentiator for grocers.

Failed online ventures emphasize the limited market options for supermarkets, as seen in 2001 when online grocer Webvan filed for bankruptcy after failing to convert and sustain a strong following of online buyers.

But the lack of online options does not alleviate grocers from the pressures of competition.

Customer experience remains a dominant focus for supermarkets, as they strive to satisfy shoppers every time they enter a store.

For grocers, big crowds and long checkout lines are two of the biggest concerns, according to the 24,000 respondents of Consumer Reports’ 2012 supermarket survey.

But high-tech in-store solutions are becoming effective tools to manage crowds, shorten checkout lines and keep customers happy.

Thermal-powered technology and checkout management systems can help grocers acquire new customers, retain them, and improve their shopping experiences.

Advanced technology can observe customer behavior and convert data into valuable footfall analytics – providing grocers with a roadmap for critical improvements. A thermal-powered checkout management system, for example, feeds grocers extensive data from non-intrusive infrared sensors installed over key points at the front end. Based on shopping patterns observed and learned over time, the system predicts how many staffed checkouts will be needed in 15- and 30-minute intervals.

In essence, thermal technology can translate to happier, more loyal customers and can improve bottom-line performance. 

Manage Checkout without Turning Customers into Cashiers

  
  
  
  

Technology plays a role in nearly every facet of our lives. Innovators work tirelessly to find the next big idea to make life easier. And the world of retail is not immune.

Groundbreaking ideas have completely transformed the entire shopping experience – from the once awe-inspiring automatic doors to the revolutionary introduction of ecommerce. And traditional in-store shopping still has several advantages over online, making it a prime target for high-tech improvements.

Today, significant innovations in retail technology have circled back to the front end.

But from self-checkout aisles to which we’ve become accustomed to smart phone checkout apps, recent upgrades can burden customers with the task of playing cashier.

On the other hand, what if retail technology improved the shopping experience by making the store itself smarter?

An integrated system that compiles data about shopper traffic both from the entrance/exit doors and the checkout could draw a roadmap for substantially improving store operations – enabling staff to emphasize customer service.

The various components of the system would have to work together seamlessly, collaborating to produce real-time analytics so managers could ensure sufficient registers are staffed as traffic fluctuates. And this system would have to do more than just store information; it would have to learn from history – constantly uncovering improvement opportunities.

Most importantly, if shopper traffic is to be monitored, customers should know their privacy is protected. The tracking system should be non-intrusive – utilizing innovation to develop advanced technology that detects people without the use of video cameras.

Rest easy, retailers. Such a solution exists. Click here to learn more.  

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