NEW TECHNOLOGIES CAN HELP STORES FIGHT INTERNET: SURVEY

ORLANDO, Fla. -- New technologies will help keep brick-and-mortar retailers from losing customers to the Internet.But if the stores want happy shoppers, they'd better make sure their customers understand the benefits and methods of these technologies.These were the conclusions drawn from a new study commissioned by the International Mass Retail Association, Arlington, Va., to measure consumer acceptance

ORLANDO, Fla. -- New technologies will help keep brick-and-mortar retailers from losing customers to the Internet.

But if the stores want happy shoppers, they'd better make sure their customers understand the benefits and methods of these technologies.

These were the conclusions drawn from a new study commissioned by the International Mass Retail Association, Arlington, Va., to measure consumer acceptance of retail technologies. It found people had strong feelings about the personal data they were willing to divulge to retailers -- and the methods used to obtain it.

"The critical thing is that the retailer has to show customers a tangible benefit they will derive from sharing personal information such as shopping behavior and taste preferences," said Mark J. Larson, national director of KPMG's retail practice and a partner in the consulting firm.

In an interview, Larson reviewed the study's results, which were announced at IMRA's annual convention by Raymond R. Burke, professor of business administration at Indiana University. The convention took place at the Orange County Convention Center here.

The research was conducted in March and April by KPMG and the Kelley Business School of Indiana University, based on written interviews with a nationally representative sample of 2,413 consumers.

"These types of technologies have the potential to impact retail more than the Internet, for now," Larson contended. "We found that 12% of consumers shopped on-line in the last two months, compared with the 91% who shopped in discount stores and 94% who shopped in supermarkets."

The study was commissioned by the IMRA in a bid to prevent the Internet from siphoning too much business from traditional stores, in part by applying technology in their stores.

The research showed discount stores had a few key weaknesses that made them vulnerable to competition from e-tailers, despite many strengths.

Discounters fell short with customers in the amount of product information they make available; only 44% said they were satisfied. Service satisfied 52%, and the speed of shopping, 57%. According to Larson and Burke, such ratings make discounters vulnerable to losing these shoppers to on-line retailers.

Nevertheless, 76% of the respondents said they liked the value they received at discount stores; 72%, the convenience; 71%, the selection; and 67%, the product quality.

More than 70% of consumers believed they would benefit from retailers' adopting various in-store technologies, such as touch-screen kiosks, self-scanning devices to obtain prices of items, body scanners, electronic point-of-sale signs and handheld shopping assistants like Palm Pilots, which would provide customers with shopping lists and promotional information, based on their past purchases at the store.

Only 9% of consumers said they thought these technologies would be a disadvantage. At the same time, 74% said they did not consider it safe to give out a credit card number on-line, and 62% were not comfortable doing business with an establishment that could only be reached on-line.

"The consumer is in the driver's seat in today's retail environment," Larson noted. "It is our intention to provide brick-and-mortar retailers with a road map to help them make informed business decisions about how to enhance the in-store experience for today's increasingly sophisticated shopper.

"The challenge for retailers," Larson said, "is to walk a fine line in which they are not intrusive in dealing with their customers but are using strategic, one-to-one marketing techniques in finding out what their customers like and dislike."

Generally, consumers were most willing to offer retailers demographic data -- age, sex and address. They were much more reluctant to divulge financial information such as salaries and mortgage payments.

Eighty percent said they would share their names, 69% would offer their addresses, 42% would give their phone numbers, and 26% would give their e-mail addresses.

Not surprisingly, most respondents willing to give e-mail addresses used computers; 42% said they'd share them with retailers, as did 50% of those on the Internet.

The study found that consumers were mostly positive about sharing information with retailers about shopping habits, including favorite products and brands, the stores where they shopped most frequently, acceptable prices for products and their hobbies and interests.

When asked about methods retailers use to track their purchasing behavior by observing them, however, consumers responded far less favorably. Only 23% like to be tracked by frequent-shopper cards, 17% by past-purchase analysis and just 6% by their on-line transactions. Consumers were most negative about retailers purchasing information about them from other businesses they patronize; only 4% favored that method of obtaining data.

"These results indicate customers are willing to share information, but only when they can control the data-collection process," IU's Burke noted in a prepared summary of the consumer study.

"They clearly dislike when the information is collected and distributed without their knowledge."

As for leading-edge biometric technologies, the study found that consumers overwhelmingly do not like them.