Device gives insight into customers’ habits

Larry Johnston, CEO of Boise-based Albertsons, wants to know the brand and container size of the detergent his customers prefer and what time of day chunky peanut butter is likely to sell out at particular stores.

He is getting the answers through technology like the Shop ‘n’ Scan devices now being tested at more than 100 Albertsons stores in Chicago and the Dallas-Fort Worth region. The hand-helds, which will soon be available at stores in other cities, allow customers to tally and bag groceries as they shop, eliminating time on checkout lines. They also remind customers about items they may have forgotten. Shoppers who pick up a package of hot dogs, for example, are asked whether they also need pickles or rolls.

At the same time, Johnston and his subordinates get lots of information on customer buying habits – everything from how often shoppers buy a bottle of ketchup to what cookies or cosmetics they splurge on most. The information is used to target particular customers for promotions and to track store inventories.

Stymied by slow growth in the economy and an inability to raise prices, Johnston and tech-savvy CEOs at other big companies are getting directly involved in figuring out ways to use technology to extract more profits from their businesses. These days they are using computers as much to gather information as to improve efficiency. The data they get enables them to cement relationships with their best customers, which translates into higher revenue and profits.

At Albertsons, which spent some $500 million on technology last year, “we’re now in a completely wireless environment,” says Johnston. Later this year, the company will provide all store directors and department managers with devices “that will tell us such things as, ‘in 10 minutes, the store will run out of double-AA eggs, so it’s time to restock,’ ” he says. One-third of stock items are in the back room of the stores, he adds, so “we’ll be able to replace these out-of-stock items without incurring customer dissatisfaction.”

Johnston and Chief Technology Officer Bob Dunst have also supplied all hiring managers with software to help in employee selection. The software guides the managers to particular questions aimed at determining candidates’ ability to serve customers and their interest in a long-term job. It is helping to reduce the 70 percent turnover levels common at many retail outlets. Albertsons last year hired about 100,000 employees from a pool of more than two million applicants.