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Innovations Abound

BY CSA STAFF

Today’s shopper is more time-starved than ever before. While a plethora of new technologies promise to ease the shopping experience, retailers need to analyze current and future consumer trends to understand which solutions will create a unique, satisfying shopping experience—both now and in the future.

“Innovation is key for inventing new ideas,” Dr. Gerd Wolfram, managing director, information technology, for METRO Group, Düsseldorf, Germany, said during the ERI eXchange. The event, which was sponsored by the now-defunct Retail Systems Alert Group, was held in Boston in June. “However,” he continued, “retailers need to consider the future of the industry, consumer needs and external trends if they really want to help the consumer in the future.”

Eager to respond to this demand, METRO Group is already considering its options to improve store-level visits. Unlike most retailers that rely solely on internal test labs and limited store-level pilots when evaluating new solutions, METRO Group tests all new concepts and technology platforms at its Future Store, located in Rheinberg, Germany.

Among the many initiatives the store is testing, METRO is bullish on its Personal Shopping Assistant (PSA) solution. This small mobile computer, complete with a touchscreen and barcode scanner, is attached to the shopping cart. It eases the shopper’s visit by delivering individualized shopping lists, comparative offers, an overview of what has already been scanned and placed in the trolley, and it even features electronic-payment options.

However, the chain is exploring how to further leverage the power of this application by transitioning functionality to a more “familiar” device. “Fifty-eight percent of shoppers are using cell phones,” he said during the keynote session, “Dominate the Competition With Chainwide Innovation.”

“Looking ahead, shoppers will expect to improve their store experience by gaining more functionality through their cell phone,” Wolfram noted.

The cell phone has the capacity to support many retail-level applications, including delivering targeted promotions and shopping lists. However, their functionality doesn’t stop there.

“While the number of shoppers who utilize our PSA increases each year, within the next five years the experience that the PSA currently delivers could be available through the mobile phone,” he said.

The mobile phone can also be the link retailers and shoppers need to bridge the shopping experience from the consumer’s kitchen to the store’s sales floor. For example, the industry has been promising the “smart refrigerator” and “smart pantry” for at least 10 years.

As RFID (radio-frequency-identification) tags move to an item level on consumer product goods (CPGs), these concepts could find their way to the masses sooner than expected. And by tying in the functionality of mobile phones, smart household components’ potential could be unleashed even faster.

“As items are removed from a smart refrigerator, RFID tags are electronically read and a virtual inventory is calculated,” Wolfram explained. “This will also create a wish or shopping list that can directly be delivered to the shopper’s mobile phone to remind them of what they need to purchase during store visits.”

Wolfram did not reveal any definite plans to test these solutions.

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Winn-Dixie team honored for turnaround

BY CSA STAFF

JACKSONVILLE, Fla. The team that lead Winn-Dixie Stores’ successful turnaround initiative is being honored by the Turnaround Management Association for the best ‘Mega Company Turnaround’ for 2007. Comprised of financial experts from The Blackstone Group, Skadden, Arps, Slate, Meagher & Flom and Smith Hulsey & Busey, the team helped Winn-Dixie regain the market share and profits it started to lose in the mid 1990s and early 2000s to competitors Publix and Wal-Mart.

Winn-Dixie filed for Chapter 11 bankruptcy in early 2005 after reporting  year-to-date losses of $552.8 million or $3.93 per share of common stock and a decline of 4.9% in identical-store sales in its second fiscal quarter over the same period in 2004.

 

Despite the difficulty of achieving a succesful turnaround, Winn-Dixie began its reorganization effort, while still continuing to operate its core business and preserving jobs. According to the Turnaround Management Association, it created new common stock for five classes of unsecured creditors, with recoveries ranging from about 96% to 53%. The company emerged from bankruptcy on Nov. 21, 2006.

For its fiscal year ended June 27, Winn-Dixie reported adjusted EBITDA of  $85.9 million compared to a loss of $27.8 million last year and an identical-store sales increase of 1.6% 

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Sears ends deal with maternity retailer

BY CSA STAFF

PHILADELPHIA Sears and Mothers Work, the world’s leading maternity apparel retailer, will not be renewing their agreement, Mothers Work announced today. Under their current agreement, Mothers Works operates the maternity apparel department in 502 Sears stores through the sale of its Two Hearts Maternity branded merchandise.

Mothers Work said it expects its partnership with Sears to end on June 20, 2008, when it current deal with the company is expected to expire.

Rebecca Matthias, president and ceo of Mothers Work, noted, “While we are disappointed about the end of our relationship with Sears, we feel the decision not to proceed with a renewal is in the best interest of our stockholders since we were unable to reach terms on a renewal which would be favorable for Mothers Work and our stockholders. “

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