Coming soon to stores near you: smart shelves, faster checkout

Retailers, hoping to lure shoppers at a time of soft sales, are tapping technology to make browsing and buying easier.

In the future world of shopping, customers might encounter:

• Overhead cameras that beam lines of light to help shoppers navigate through store aisles.

• Salesclerks who can tell - instantly - if something is in or out of stock.

• Computers that track customers' buying preferences at department stores.

These are just some of the ways that retailers are hoping to use technology to make shopping feel more like an adventure and as easy as buying online often is. The goal for retailers is to eliminate the most frustrating moments - such as spending too much time at checkout or discovering that a wanted item is out of stock after a drive to the mall. Some solutions to these problems were on display here this week at the annual convention of the National Retail Federation (NRF).

"Most of the technology is available today," says David Meany of Cisco Systems. "But you are not going to see it applied until the retailers find it valuable - whether it's increasing productivity or adding value for their customers."

The ideas might well be timely because it appears that retailers plan on spending money this year to upgrade their stores (after reducing capital spending last year). According to a study, in the next 12 months more than half of the retailers queried plan to replace or upgrade their point-of-sale systems, while 33 percent will redesign and relocate stores.

"This is a change from the last two years, where the top priority was cost reduction," says Scott Hardy, a managing director at BearingPoint Inc., the McLean, Va., consulting firm that did the survey with the NRF Foundation.

The spending will come against a backdrop of modest sales gains for the industry. NRF economist Rosalind Wells has projected 3.5 percent growth in 2005, which would make it the slowest period since the 2001 recession. "Consumers will be faced with rising interest costs and won't have the stimulus provided by tax cuts," she says. "They will also be faced with higher energy costs and slow wage growth."

Enter technology, which may inspire consumers to at least visit the mall to see what's new. One such attraction might be "smart shelves." Through the use of radio frequency identification (RFID) tags, which are basically small tags with a computer chip that transmits a radio signal, retailers can tell exactly where an item is. "A lot of times the merchandise is in the store, but it's in the back room or in overstock, and this technology locates it," says Mr. Hardy.

The technology also allows the retailer to keep a profile of what each customer purchases. "Without your saying anything, the retailer will know what you've bought in the past and can offer you other items you might be interested in, " says Chris Enright of IconNicholson, which is adapting the technology.

Eventually, the technology will also help consumers check out faster, especially in self-checkout lanes. Instead of running a bar code over a reader, an RFID receiver will instantly add up all the items in a bag and charge the consumer's account. It will also catch those who "forgot" to check out.

Retailers have also been intrigued with ceiling projectors or cameras, which would allow a store to guide a consumer to a product and possibly even answer questions. IBM is developing the system and says it turns almost every surface in a store into a potential "touch screen".

Shoppers can also expect to see more "smart kiosks." In the not-too-distant future, consumers will be able to download music to their iPod or other devices at their supermarket, Wal-Mart, or other store. "You're likely to see it in retail stores, restaurants, bars, lots of different places," says Ed Tuhkanen of TouchTunes Corp., which builds the jukebox-looking machines.

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