Interactive computer systems, or the store-in-a-box concept of shopping, is gaining ground among retailers and at least one user is predicting these systems will become an industry standard.
Touch-screen video display terminals offer retailers the means of showing their customers a full inventory without having to pay the price of storing all that merchandise on the premises. Stock is pooled at a central location and shipped to the customer-usually within a week.
These interactive systems, which use video disc technology to link the computer`s storage capacity with the video disc`s visual display and sound capacity, operate with a simple finger touch to give access to reams of data.
The technology gives retailers a way to merchandise a complete line of products and services profitably.
The first retailer to take full advantage of the technology is Florsheim Shoe Co., which already has installed 250 electronic ”salesmen” in stores from Washington, D.C., to Bloomington, Ind., to Port Arthur, Tex., and is in the process of installing 150 more. The company expects to have 2,000 units in place within two years.
The Florsheim system puts customers in touch with the company`s complete inventory of men`s shoes-about 19,000 combinations. It`s practically impossible for any store to hold that kind of inventory, but it is fully accessible via computer, regardless of store location. Once a selection is made, the shoes can be delivered to the customer within seven days.
ADDED EFFICIENCY
Other systems used in other companies display not only inventory, but provide information on how certain products are made, give instructions on how to perform certain tasks and offer information on store credit terms and policies.
”This will not replace salespeople,” emphasizes Perry Odak, president of ByVideo Inc., the Sunnyvale, Calif., firm that makes the interactive computer Florsheim is using. ”It`s just a way to make salespeople more efficient.”
Levi Strauss & Co. is also marketing its men`s jeans through interactive video systems. Zale Corp.`s Bailey Banks & Biddle jewelry stores are hawking their Rolex watches, Waterford crystal and other expensive items via video disc and L.R. Balfour Inc., king of college ring-makers, has installed the machines in college bookstores to allow students to call up their particular college and choose the options they want to customize their own ring.
In addition, Lowe`s Companies Inc., a nationwide chain of do-it-yourself home centers, is testing a handful of the automated saleskeeps in selected stores.
These companies are all using ByVideo`s products, but the California company is not the only designer of interactive video systems and software.
FLEDGLING INDUSTRY
However, it`s still a fledgling industry.
”If you took your shoes off, you could probably count us on your appendages,” says Steven L. Roden, president of Comsell, an Atlanta-based maker of interactive video disc equipment. ”There are probably less than 20 companies, but three years ago, there were just two or three.”
Other companies are producing interactive video terminals and software that are being used to market a diverse range of products, including furniture, carpets, tires, nursery plants and Cuisinarts.
Comsell is producing video disc hardware and programs to be used in selling banking services, insurance policies and vacations.
Most major retailers are looking at these systems, says Doug G. Hosking, national director of electronic shopping consulting for the accounting firm Touche Ross.
Hosking is reluctant to speculate on how far this technology will penetrate the retailing industry, but says, ”based on some study results,
(interactive video disc) terminals have proven they can be economical and a successful adjunct to in-store sales.”
INFORMATION TOOL
Lowe`s is using the interactive videos as an information tool. At a Lowe`s store video kiosk, a customer can obtain information on installing kitchen cabinets or bathroom fixtures, like commode and sink, plus the proper tools needed to do the job.
Also included in the presentation are color displays of Kohler plumbing fixtures and Appalachian Oak cabinetry. The company hopes to use sales of these products as a measure of the interactive video`s merchandising abilities.
”I think this is a good aid to selling,” says Don Davis, vice president of sales for Lowe`s, adding it is too soon to tell whether the kiosks will become a permanent fixture.
”Right now, we`re just trying to determine what use it`s being put to-whether people are using it out of curiosity or if it`s really helping them.” Randy Lively, of the Zale Corp., Dallas, is more enthusiastic over the video disc technology`s retail applications.
”I don`t think there is any limit to the utility of this,” says Lively, Zale`s senior vice president for finance and administration. ”What would be limited would be the creativity involved in the video presentation.
”If you have a schlocky presentation, you are going to have a schlocky customer reaction.”
AUTOMATED SALESMAN
Lively agrees with the experts that the automated salesman will only augment the basic structure of retailing-not change it.
”It merely expands the ability of the sales associate to provide information.” And it also helps update salespeople`s knowledge of what`s available with detailed product information, he says.
Although the 50 terminals that Zale`s is testing are information-only, the company may test a transactional model, with the ability to take customer orders, if preliminary results are promising.
That prospect is likely, he says.
The interactive video`s real value to Zale`s is that it allows a small store access to a large inventory of products, without having to expand store space to keep a larger inventory on hand.
”If this process as I`ve described it works, it will create competitive pressure inside the industry,” Lively predicts, ”and it may become a standard component of the retail experience.”
The technology has been around for about a decade, but no one could find a real use for it, says Comsell`s Roden. ”From the beginning, it`s been a solution in search of a problem.”
GLAMOR MARKET
The first problem it provided the answer for was as the 1980s version of the training film, but its real success as a solution may be in merchandising, which is much more of a ”glamor market,” Roden says.
”The military has gone gaga over video disc technology,” he says,
”because when the military is not fighting, it is training people, and they are always searching for optimal ways to train.”
But it has only been in the last four years that the application of video disc technology in retailing has been realized.
A national shortage of sales labor plus a retail emphasis on better customer service and the high costs involved in storing a large inventory work together to create a ”natural niche for video disc technology in retailing,” says Rockley L. Miller, editor and publisher of the Falls Church, Va.-based trade publication, ”Video Disc Monitor.”
After all, he says, ”an electronic salesman is consistent and doesn`t need insurance.” –
