The next time you use the self-checkout register at your local Wal-Mart
or grocery store it might be using IBM technology,
thanks to an acquisition by Big Blue Thursday.
The retail stores solution division of the Armonk, N.Y.-based tech giant
bought out Productivity Solutions, Inc., to bolster its point-of-sale
(POS) product line for retailers for an undetermined amount. The entire
company of 140 employees, based out of Jacksonville, Fla., will be
assimilated into IBM’s retail division.
The deal is the natural evolution of a marketing agreement the two
companies have enjoyed for the past couple years, said Greg Thompson, an
IBM spokesperson, where PSI provided the hardware and IBM the software,
certain components and services. Thompson said IBM picked the company
because of the modularity of the automated checkout machine.
PSI’s self-checkout machines are used by Lowe’s, Big Y Foods and BJ’s
Wholesale Club, among others.
There has been a burgeoning demand for self-checkout at the stores in
recent years, as more and more customers look for a more convenient
method of paying for their purchases. According to IHL Consulting
Group, a retail industry analyst firm out of Miami, stores are seeing as
much as 35 percent of their inventory getting checked out using the
technology. Spending on the systems that make the technology work is
expected to surpass $1 billion in market value by 2005.
“Self-checkout has become an important new trend,” he said. “Customers
really prefer to have one point-of-sale vendor. Checkout is the most
important part of retail; it’s the moment of truth, where they give you
the money.”
While the PSI purchase may only be a small part of IBM’s existing retail
stores division, the technology used is considered an invaluable
stepping stone to future gains in the retail industry at the
point-of-sale. Self-checkout is just one of the platforms IBM expects
to roll out in the near future.
Big Blue envisions a Retail On Demand service for the shopping centers
of the future, where customers aren’t reduced to waiting in line to make
their purchases. Instead, they’ll be able to buy their milk or latest
DVD using an Internet shopping card, wireless tablet PC or kiosk.
The end result, of course, is the promise of RFID
end-all-be-all in shopping convenience. With RFID, customers could just
walk out of the store with their purchases and have the bill
automatically tallied against their bank account.
The technology is used today, but it’s primarily used at the supply
chain management level to account for inbound/outbound pallets at the
warehouse.
RFID at the consumer level is anywhere from 7-10 years away, said
Thompson, mostly due to the cost of the RFID tag. Similar to the bar
code found on packages today, the tags give out a weak radio signal for
transceivers to pick up, putting the cost of a tag between 25-50 cents.
That’s a prohibitive cost for retailers, Thompson added.
