Supermarket Operation and Service

Innovation

Billy Leung Dickens Chow

Kevin Kan Marcus Yeung

Rachel Yu Ricky Au

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Agenda

Supermarket shopping Shoppers’ Survey Wish list The Wiki Model - What is it? - Process flow (purchase, payment and collection) - etc Challenges and Limitations What’s Next?

 

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Supermarket Shopping

Combination of grocery stores into a place Customers choose and buy from a variety of products

Current Process

 

Shop Select Collect Pay

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Findings on Shoppers’ Survey

Frustrated with queues at pay points 84%

Walk away from a store with long queues 74%

Frustrated by out of stock product 84%

Frustrated by change of store layouts 76%

Frustrated by too few staff on the shop floor 71%

Frustrated by unclean stores 77%

Source: Kronos Survey 20084

Wish List

Customer

• No queue at checkout• More customer oriented

services• Pleasant supermarket

shopping experience

Supermarket

• Cost reduction: rent, labor etc.

• Profit maximization: turnover, patronage etc.

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NO QUEUE GUARANTEE

Objectives

Shorten customers’ shopping time Serve more customers and increase sales volume Provide more convenience to customers in supermarket shopping Increase product varieties Provide add value services to customers during their supermarket

visits

How?

A trolley-free supermarket shopping environment, offering express checkout service with

The Wiki Model

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Stocking Process Shopping Process

Warehouse

Table 1 Supermarket Business: Inventory Flow Cycle

WarehouseSupermarket

(in-storewarehouse)

Up-shelf(supermarket)

Off-shelf(shoppers)

Cashier Checkout

Purchase Ready-to-go

Supermarket(in-store

warehouse)

Checkout Point/ Cashier

Purchase Ready-to-go

Automated inventory Categorization Systemto bag purchase orders

• long queue • slow checkout• time consuming• trolley jam for homedelivery orders

• labour intensive

Current Inventory Flow

Proposed Inventory FlowOctopus card purchase

Manually off-shelf to trolleys

• warehouse direct deliveryfor homedelivery order

Supermarket: Inventory Flow

Video: Journey of a supermarket trolley

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Process Work Flow

Customer selecting items • Octopus card

Customer pay & confirm the order

Moving items from shelves to collection areaOption 1: conveying belt

Option 2: moving basket

Ordered items shifted to collection

Collection• Display order

number on a board

• Verify order number

• Customer collect goods

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Ordering Device: Octopus Card

Select commodities on

screenWave card Confirmation

kiosk

Payment kiosk/Check out

counterPick up number

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Octopus card reader installed for each of the commodities OR touch screen reader for selection of item wave card

No charge, only record unique number of Octopus Card

Octopus Card: Pros & Cons

PROS CONS

Almost everyone has an Octopus card**95% penetration in Hong Kong**** >17 million cards in circulation**

Process for ordering same items for multiple quantities

Well established and stable Octopus card system

Not able to check list of shopped items handy but at confirmation kiosk

Minimal R&D and testing costs Potential queue at confirmation kiosk

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Payment

Confirmation slip at confirmation kiosk Conventional methods of payment i.e. Cash/EPS/Credit

cards/Octopus card

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Back-end logistic system starts moving the ordered items to the counter for collection

Option 1: Conveyor Belt Option 2: Moving basket

Customers confirm order at confirmation kiosk (POS terminal)

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Back-end Logistics

Option 1: Conveyor Belt

Main controller trigger the relay at the respective shelves Selected items drop to “Smart Container” at the

conveyor belt Items per order to be collected via “Smart Container” to

the basket at goods collection area

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Option 2: Moving Baskets

Goods drop to the same collecting basket on the conveyor belt

Baskets start from the beginning of the belt and go through the circle

Customers collect ordered goods at the end of the conveyor belt

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Conveyor Belt vs Moving Baskets

Conveyor Belt WINS!!

More efficient: shorter route Avoid stacking Avoid overloading Easier to monitor

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Display board showing order number ready for

collection

Customers collect items by presenting

confirmation slips

Collection

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How does it benefit to customer and supermarket?

More product varieties

Less trolley traffic & queues

Tracking of expiry dates

Consumers & Patronage More $$$

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Less rental space Less rental cost More $$$

Challenges and Limitations

Consumer Behavior Logistics

Cost Implication Environmental Friendliness

Changing “shopping

experience” Last-minute change Consumer adaptability Bulk purchase & home delivery?

Bottleneck at check -out point during peak hours: another queue?

Sophisticated automated back-end system

• BYOB vs Packaging

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What’s next

Get the idea patented Build a prototype Develop software and source hardware Write up a business plan Study other options – Smartphone and QR Code

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Our Ideal Plan

A

B

C

A = High-end supermarkets

B = Regular supermarkets

C = Market expansion

HK Market

Overseas Markets

Year

Growth

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Q&A

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Future Ordering Device: SmartPhone

Allow user to install and run advanced applications Customers install specified Apps Feature phone could do the same via WAP technology Current penetration rate of smartphone:

80% in US by 2012

48% in Hong Kong in Q4 of 2009, not yet a mature media for making orders

Huge potential growth with expected penetration rate of 80% in 3-5 years

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Future Ordering Device: SmartPhone

Open App Take picture

Select quantities

Confirm order

Payment via

internet

Pick up number

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Ordering Device: SmartPhone

PROS CONS

Unlimited possibility for system development

Low penetration rate of smartphone

Easy information push to customers Stability of App in question

Save queue time by payment online

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QR Code (Appendix)

Matrix code (or two-dimensional bar code) Storage of more information, more character types that

could be printed in a smaller space Capability in handling all types of data (e.g. numeric and

alphabetic characters, symbols, etc…Up to 7,089 characters can be encoded)

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