Bullock’s Shifts to Bar-Code Price Tags : Give Salespeople More Time for Customers
Sharp-eyed shoppers at Bullock’s in Sherman Oaks might have detected something new along with the usual price tags on products ranging from sheets and towels to Haggar slacks and Levi’s jeans: black and white vertical stripes usually seen on food products.
Those “bar codes,” which grocers have used for the last few years, have slowly migrated from the supermarket to the big discount chain and now to the department store, although not without a fair amount of resistance on the part of some retailers.
And a decision last week by a trade group representing 45,000 department and specialty stores to support the technology could push these bar codes along faster than some merchants were expecting.
“Grocers proved it worked,” said Bill Sumner, vice president of information systems at Bullock’s. “We’re jumping on the bandwagon.”
More Time Helping Shoppers
At a time when department stores are rediscovering customer service as a way to improve sales, bar-code proponents say, the new technology means that salespeople will spend less time ringing up purchases and more time on the floor helping shoppers.
In addition, they say, the big stores will know more quickly what’s selling and what’s not and be able to replenish popular items almost overnight.
Customers who are aware of the change seem to appreciate it. Mimi Burnett of Glendale, shopping recently in the sheet and towel department at Bullock’s, said she first noticed the stripes several months ago and found that they’ve made things faster at the cash register.
Since late 1984, Bullock’s has been waging a somewhat lonely battle to win converts to the technology that is now in use in 13,000 of the nation’s 30,000 supermarkets.
Recent indications are that the campaign by Bullock’s and its parent company, Cincinnati-based Federated Department Stores, is finally paying off. The National Mass Retailers Institute, a New York trade organization representing 195 discount chains, last month endorsed the use of bar codes, also known as universal product codes, or UPCs.
“It was a matter of seeing the writing on the wall,” spokesman Richard Hirsch said.
And just last week there was support from the trade group that carries the most weight with department and specialty stores. The executive board of the National Retail Merchants Assn. voted to shift its support to UPC. For the last 10 years, the association has recommended the competing OCR-A, or “optical character recognition” technology, which uses special devices to read number and letter codes on price tags.
Hirsch, who represents the discounters, says flatly: “OCR-A for all intents and purposes is a dead standard.”
Officials at the National Retail Merchants Assn. will not comment on the resolution passed by its executive board last week.
The issue is under study by the group’s lawyers, who will determine whether the change raises antitrust considerations in the case of retailers who invested heavily in OCR-A and now might feel compelled to go with the new standard.
For retailers, a shift to using the hand-held laser “guns” or stationary laser “boxes” needed to read the bar codes and automatically register price and product information would involve a total industry investment of billions of dollars.
To be sure, merchants could expect to reap benefits from speedier transactions and improved inventory management. But the up-front expenditures could prove daunting for small retailers or for large mass merchants, such as Sears, Roebuck & Co. and J. C. Penney, that have invested heavily in the other technology.
K mart to Convert
K mart, the nation’s second-largest retailer, has earmarked nearly $400 million for converting its 2,050-store chain to bar-code technology, according to David M. Carlson, vice president of corporation information systems.
For Bullock’s, with 27 stores, the commitment is a much-smaller $9 million to convert the chain by 1989, Sumner said.
“K mart never seriously considered OCR-A,” Carlson said. “In our type of operation, UPC was already being applied to a large number of products.”
However, that isn’t the case with most of the 45,000 department and specialty stores that look to the NRMA to establish retailing standards. In such areas as apparel, manufacturers are only slowly starting to mark merchandise with bar codes.
As a result, Bullock’s had to devise a method of re-marking merchandise from manufacturers to incorporate both a bar code and a price. By including prices, Bullock’s hoped to avoid the customer complaints that greeted the elimination of prices on individual grocery products, Sumner said.
Having to mark the merchandise at the store ties up workers who must print out labels, count and separate merchandise and tag each item.
Levi’s Uses Both
These costs are a “double expense ultimately passed on to the consumer,” Sumner said.
He estimates that the elimination of double marking would save Bullock’s about $1 million a year.
Observers say Bullock’s “has led the charge” in trying to win support among vendors, and some big manufacturers have cooperated.
Levi Strauss & Co. decided to incorporate UPC markings along with OCR-A on its labels in January, 1985.
“Department stores need to get manufacturers to move with them by preticketing,” said Paul Benchener, Levi’s director of retail electronic services.
WestPoint Pepperell in Athens, Ga., has also gone to the dual marking system, but it hopes that the transition is temporary.
Ernie Slaughter, director of systems and procedures, estimates that each such label costs two cents. Multiplied by the thousands of styles of sheets, towels and blankets that the company makes, “you’re talking about a lot of labels,” he said. Going with only one marking would cut the cost in half, he said.
Some retailers note that the NRMA cannot really be faulted for choosing the OCR-A technology over UPC a decade ago.
At the time, bar coding at supermarkets was raising a ruckus among consumer groups, who complained that grocers would be able to sneak price increases by customers.
With OCR-A, tags could be marked with numbers and letters that, unlike bars, could be read by the consumer. A salesclerk would run a wand with a light beam over the numerical code or enter the code by hand.
Many merchants found this process to be cumbersome at best and inaccurate at worst, and they devised their own methods of ringing up transactions. As a result, department and specialty stores have never really had a single standard technology.
Most Won’t Commit
Federated Department Stores decided some time ago that there had to be a better way. Drawing on the expertise of the company’s Ralphs Grocery division, which was one of the first U.S. supermarket chains to convert to scanning, Sumner devised a pilot program at Bullock’s.
Over the last year and a half, several departments at the Sherman Oaks store have made the shift successfully.
As a result, Howard Goldfeder, Federated’s chairman, recently announced plans to convert other divisions as well--including Bloomingdale’s in New York, Rich’s in Atlanta and Filene’s in Boston. May Department Stores is also testing the technology at a store in Lorain, Ohio.
Most other department store retailers refuse to commit themselves to bar-code scanning in the near future, although several acknowledge that they are investigating the technology.
Buffum’s in Southern California remains firmly committed to OCR-A technology, at least for now. “We’ve been very successful with it,” said Frank Buehler, director of data processing.
No Overnight Success
“What we are reading through our wands, the customer reads the same. With the bar code, you’re looking at some wavy lines and printing out some descriptions for customers.”
Although Buehler said “we’d be delighted to stick with OCR-A,” he acknowledged that UPC might be “forced upon us simply because Federated and Bullock’s have made it a personal campaign.”
If that happens, Buffum’s is in luck. Its registers can be outfitted with the appropriate bar-code scanning equipment.
No one is expecting the industry to change to bar codes overnight.
“It’s not really something where the entire industry is turning around because of it,” said Hirsch of the National Mass Retailers Institute. “It’ll be a slow movement.”
But Sumner of Bullock’s clearly sees bar coding as a panacea.
“Imagine a department store during the midst of the Christmas rush with no lines,” he said.
“That’s what you’ll get with bar codes.”