Shoppers have corne to expect much more than just food and standard non-food items from their supermarkets. Retailers are jumping through hoops trying to provide their customers with more select services.
Elsevier Food International, Vol. 6, Number 1, February 2003
David Litwak

Maybe it is the elusive concept of one-stop shopping that everyone is always talking about, but over the past few years supermarkets have become much more than food stores. In fact, they have become much more than supermarkets, at least in the traditional sense. We all know that supermarkets have been selling a large variety of non-food items for many years. First they added sections, such as greeting cards, home-office supplies, garden supplies, automotive supplies, and even apparel. Then they squeezed a full-service pharmacy into the stores, followed by a florist, and finally came the invention of the hypermarket or supercenter.

The supermarket has evolved to the point where it is now incorporating as many purely service businesses under its roof as possible.

The one thing that this one-stop shopping evolution had as an underlying basis was that it all revolved around the selling of products and possibly some value-added services such as prepared foods sold through the deli section. The supermarket has evolved to the point where it is now incorporating as many purely service businesses under its roof as possible. All to satisfy the consumer's need for convenience. Around the world, the types of services that food retailers are offering their shoppers include ATMs, banking services, dry-cleaning, shoe repairs, film processing, insurance brokerages, hair salons, travel agencies, postal and package delivery services, real estate brokerages, tyre sales and installation and other automotive services, driving schools, child care, catering, and so forth. Moreover, supermarkets in the UK are now awaiting legislation that would allow them to sell cars. Car sales through supermarkets have already been tried in other parts of Europe.
In the US, most supermarkets are fairly common in the services that they offer to their shoppers. For instance, according to the Food Marketing Institute, 83 per cent of US supermarkets that were constructed in 2000 had a beverage bar, 59 per cent included a pharmacy, 48 per cent had an in-store bank, 38 per cent an ATM, 31 per cent a photo centre, 28 per cent gave cooking demonstrations, 24 per cent featured a dry cleaner's, and many had petrol pumps as well as in-store child care.

Financial services
Among the most popular of shopper services in supermarkets are financial services. Whether it be ATMs, in-store banks, investment services, mortgage loans or tax preparation services, many supermarket shoppers have become accustomed to making financial transactions while in the supermarket. The latest trend in supermarket banking, especially in the US, is the mini-branch or the automated branch that offers limited banking services and is manned by only one staff member, or no staff member at all. Shoppers make most of their transactions via a series of sophisticated ATMs. Many of these automated branches feature Internet-connected kiosks, as well as telephone links to bank staff. If a bank clerk is onsite, he/she is usually there during limited hours to assist consumers.
There is one large philosophical difference that should be pointed out between supermarket operators in the US and the UK that drastically affects the scope and types of banking services that they offer. "In North America as in the UK, grocers act as Trojan horses for banks expanding into new geographic areas," says Gwenn Bezard of New York and Paris-based Celent Communications. "Due to regulatory concerns, retail grocers have approached financial services differently in North America than in the UK. While British grocers have frequently taken an equity share in financial institutions, North American grocers, primarily in the US, have tended to let space to bank branches. However, new strategies, circumventing restrictive regulations, will allow US grocers to playa more active role in banking.
"While banks' branches and brands keep grocers' volume purchasing power at bay, Celent predicts that in the next three to five years grocers will increasingly benefit from the competition among banks wishing to link up with them. While the impact of grocers on financial institutions is still modest, Celent expects grocers' footprints in financial services to increase, thanks to their powerful brands, their sales culture, and the commoditisation of banking business and products," Bezard says.
In the UK, supermarkets and other large retailers have already taken a firmer grip on the financial services that they offer by operating their own banks, often in partnership with an existing bank. For instance, clothing and food retailing icon Marks & Spencer operates authorised bank Marks & Spencer Financial Services.
Tesco also has a financial services business, which it opened as a joint venture with National Westminster, the UK's largest bank. In a unique twist on traditional supermarket loyalty programmes Tesco expanded the use of its Clubcard to include a savings and payment arrangement. Not to be outdone, Sainsbury's has teamed up with The Royal Bank of Scotland to form Sainbury's Bank, a full-service consumer bank with branches in Sainsbury's locations.

Coin power
One type of financial service that has gained the most popularity among supermarket shoppers is perhaps the simplest of services. Shoppers line up to put all their coins into a little green machine without any type of product dispensed back to them. All they get for their hard-earned and long-saved coins is a little slip of paper.
Coinstar, Inc. has become one of the most prolific services offered in the US, Canada, and the UK over the past decade. Started in 1992, the Bellevue, Washington-based company has seen its novel idea of helping consumers get rid of all those coins that have been taking up space in drawers and in jars for years. Coinstar has just installed its 10,000th coin machine with sales estimated to be $130 million. Supermarkets have had great success with Coins tar in the UK. The company recently announced that the UK units had counted one billion coins since their introduction there in 1999. There are about 400 machines in operation in the UK in Asda, Sainsbury's, MAKRO and Tesco stores. More than half a billion of those coins were counted in the last year alone, illustrating the tremendous growth in popularity of the service.
"One billion coins is a real milestone for us," says Alex Camara, managing director of Coinstar UK. "All the feedback we've received from consumers has been extremely positive and we plan to roll out many more machines this year and in 2003."
Coinstar's research shows that about 70 per cent of the money that the machine counts and generates a credit slip for is subsequently spent with the host retailer. This is a huge benefit to the retailer if he can attract customers into the store using the coin-counting machine and then hold them in the store to spend the counted money.

Automatic vending
Since convenience is the driving force behind consumers' decisions on where to shop, anything that makes shopping more convenient is considered a service by many consumers. Enter the modern version of the tried and true vending machine. People have been buying sweets, snacks and beverages out of vending machines for years, but the new generation of vending machines are versatile enough to allow consumers to do most of their shopping at the touch of a button. In early August, a street in downtown Washington, DC saw the coming of a new era in automatic vending in the US with the opening of Store 2000. Store 2000 is either a huge multi-product vending machine or an automated convenience store. The concept was developed by Automated Distribution Technologies of Exton, PA and the self-contained unit measures 18 feet by 9 feet and can hold up to 156 different products, while dispensing up to ten products per transaction. "The Shop 2000 is a unique product which effectively addresses some real concerns in the convenience industry such as space restrictions, labour availability and shrinkage," says Hettie Herzog, president and CEO of Automated Distribution Technologies. "For the retailer it represents an opportunity to serve new customers in non-traditional locations."
The concept of an automated convenience store may be new to the US but it has been in use in Europe since 1996. The Shop 24 multi-product vending machines from the Belgian New Distribution Systems have clearly been the inspiration for the Shop 2000 model in the US. Shop 24 has over 160 stores installed in seven European countries (Belgium, The Netherlands, France, Germany, Italy, Austria and the UK) with contracts to install at least 150 more.
What distinguishes Shop 24 from its American counterpart is that Shop 24 is adaptable to being either a stand-alone unit placed in any street or car park but can also be incorporated inside any store. Casino in France, for instance, has installed Shop 24 in the exterior wall of some of its supermarkets, facing out into the street. In this way, Casino shoppers can buy essential groceries even when the store is closed. Moreover, when the store is open, the Shop 24 gives Casino shoppers the added convenience of not having to enter the store to buy just a few crucial items.
Another feature of Shop 24 is a mobile version that is fully housed inside a trailer-type casing on wheels. This version can be easily moved from place to place by truck or even by forklift. This allows the retailer the freedom to place the Shop 24 anywhere in his car park, or to give him a presence at any location or any community event, such as sports matches, concerts or in parks.