A N Y S I Z E O R D E R, A N Y T I M E Jewel Osco and PSI January 8, 2003.

A N Y S I Z E O R D E R, A N Y T I M E

Jewel Osco and PSIJanuary 8, 2003

Prepared for Jewel / Proprietary and Confidential / January 8, 20032

Agenda Introductions and expectations PSI ACM self checkout key advantages ACM self checkout program at Jewel

– Goals and overview– Description– Importance to Jewel’s success

Program outline details Measurements Self checkout “Best Practices” review Summary and next steps


ACM 700 self checkout key advantages

Any size order any time Higher sales and item

throughput Lower intervention rates Incremental security Intuitive system makes

ACM easiest to use


Key advantages - continued Faster throughput at peak

times Faster processing of non-

barcoded items with graphic images

Modular configuration options fit all store formats and sizes

Flexibility to accommodate use of baggers


Jewel Store #3162 ACM floor planA L B E R T S O N ’ – J E W E L / O S C O P R O P O S E D F R O N T E N D

N o v e m b e r 2 7 , 2 0 0 2

C o n v e n t io n a lL a n e # 6

C a n d yR a c k

M e d i u mA C M

4 B a gC a r o u s e l

M e d i u mA C M

4 B a gC a r o u s e l

L o n g A C M

P a yS t a t io n


C a n d yR a c k

4 0 . 4 4 "3 0 . 9 6 "

B a g R a c k B a g R a c k

L o n g A C M

B a g R a c k


C a n d yR a c k

B a g R a c k

4 9 "

BANK

4 5 1 "

3 0 . 6 0 "

4 0 . 4 4 " 4 9 "

2 9 "2 9 "3 6 "2 9 "3 4 "3 9 "3 4 "

2 9 . 0 8 " 2 9 . 1 6 " 2 9 . 0 8 " 2 9 " 3 6 " 2 9 " 2 9 "


ACM Self Checkout at Jewel


Success criteria for ACM self checkout at Jewel Industry-identified self checkout goals

– Enhance customer service

– Increase store labor productivity and profits

– Improve competitive advantage


Prove success with ACM self checkout study ACM self checkout study program quantitatively proves

self checkout success Monitors self checkout sales, items and customer

throughput – Increased customer utilization = higher customer acceptance– Increased self checkout sales and item throughput = increased

opportunity for labor savings Establishes customer service improvements

– Reduced customer line size Identifies opportunities for labor productivity

improvements– Locate opportunities to reduce labor hours on the entire front-end – Increase in overall front-end productivity levels


Program overview

Customer line size and labor utilization survey– Pre-self checkout– Post-self checkout

Measurement criteria– Front end sales, item and customer transaction throughput

• Self checkout and conventional lanes– Shopper line size per open lane– Number of associates working on a customer order – Labor hours used on front-end, self checkout and conventional– Labor hours earned from self checkout

Post-install consumer survey


In-store customer line size and labor utilization survey provides accurate, credible data

Real-store data supports ROI – Labor hour savings opportunities– Customer service improvements

Based on in-store observations and data analysis– Collect store-specific information, pre- and post-self checkout– Observe customer lines and front end staffing

• 15 minute intervals, 12 hours per day for 7 days– Collect data on store customer line size per lane

• Conventional lanes, Self checkout and service desk– Collect data on labor scheduling and resource utilization

• Count actual associates servicing customer orders• Assess information on labor scheduling and labor productivity levels

– Gather information on front-end procedures and policies


Customer line survey form


In-store customer survey Goal - obtain information on customer’s perception

of self checkout– Why they choose self checkout– How often do they use self checkout– What do they like about self checkout– Knowledge of self checkout at other stores

PSI interviews customers as they exit the store


Supporting information needed from Jewel

Retailer self checkout goals and expectations– Self checkout throughput– Labor savings– Customer service improvements

Weekly store throughput numbers – Sales, items, and customer transactions

• By hour, by day• Conventional lanes and self checkout

Actual weekly labor schedules for front-end staff– Identified by function

• Shopper’s assistant, bagger, carry/out, service desk, supervision, etc.

Store labor projection factors and productivity analysis data


Program timetable

Key Project Milestones Description DateInitial Kick-off meeting January 8, 2003Store Kick-off Meeting Review project with store management January 19, 2003Pre-self checkoutobservations

In-store observations to obtain baseline informationon customer line size and associate staffing

Week of January 19,2003

Installation of ACM selfcheckout

PSI staff to install new system and start training ofstore associates

February 9, 2003

Introduction of ACM selfcheckout to Jewelcustomers

Open new ACM self checkout for customer use. PSIto provide assistance in “Hosting” customer orders.

Weeks of February 9th

and 16th

Store team manages newself checkout system

Store team schedules staff for self checkout trainingand operations. Implements and monitors BestPractices

Week of February 9th

and ongoing

Post self checkoutobservations

In-store observation to collect information oncustomer line size and associate staffing

Week of March 16, 2003

Consumer Survey In-store survey of Jewel customers that use selfcheckout

Week of March 16, 2003

Final report on store study Present final report on collected store information. Week of April 6, 2003


Roles for effective implementation


Sample Charts from Previous Studies


Comparison survey data (Sample)


Consumer line survey data (Sample)


Why shoppers use ACM self checkout (Sample) (Multiple responses accepted)

It’s easy to use

There were lines at the other lanes

It’s fun

Lanes handle small and large orders equally well

I like to do it myself

I like to bag my own groceries

My children like it

I don’t have to deal with the cashier

52%

0% 20% 40% 60%

52%

50%

45%

32%

23%

18%

0%


Consumer survey data (Sample)

Much prefer ACMSomewhat prefer ACM

Both about the same

Somewhat prefer Other

38%28%

28%6%


Keys to Success


Recipe for success Company-wide commitment to support program Set goals for ACM Self Checkout

– Customer service– Labor reduction/reallocation– Throughput, sales, items and transactions

Select measurements and monitor performance Implement operational “Best Practices” for ACM at

store level Publish results with focus on improved performance Retrain as necessary


Best Practices implementation crucial to success Keep ACM lanes open

– Open self checkout lanes to match store hours Train and staff lanes appropriately

– Staff self checkout with friendly, courteous associates– Train associate to be at front of lane to assist customers– Communicate self checkout benefits to customers and store

associates– Provide bagging assistance at the lanes as needed

Actively manage entire front end– Open conventional lanes next to self checkout first– Manage self checkout as part of the overall front end– Develop labor schedules using ACM lane capacity to improve

service while reducing hours


Summary and next steps ACM self checkout offers Jewel unique advantages

– Easiest to use, fastest, friendly, flexible PSI self checkout study provides replicable tool to

prove success Next steps

– Review the study outline and provide feedback to customize it for Jewel’s needs (1/15/03)

– Set up store level meeting to review with store team (prior to 1/19/03)

– Review training materials and “Best Practices” to make sure they comply to Jewel’s standards and policies (02/05/03)


Appendix

Operational Best Practices


Operational best practices

Operational best practices really works! Successful implementation requires

commitment– Management support– Goal setting and measurement– Training on best practices

Best practices– Lane always on– Appropriate staffing and training– Actively manage entire front end

Responsibilities– Cashier, front end manager, store manager


Best practices programs have increased usage by 35%

15.2%

16.5%16.2%

16.5%16.5%16.3%

17.8%

18.6%18.5%19.1%19.2%18.8%

19.8%20.5%

10.0%

14.0%

18.0%

22.0%

Cu

sto

me

r U

sa

ge

%

* 2001 utilization program. Percent of total store including deli, pharmacy, and other non front end depts.


Successful implementation requires 3 commitments

Management support Goal setting and measurement Training on best practices


Management support Strong, outspoken support from Executive, Division,

District, and store management Weekly inspection of SCO performance through

management reporting, rankings and measurements Actions to improve all stores’ performance

– Address underperforming stores– Support continuous adherence to best practices


Goal setting and measurement Store specific goals for SCO customers, items and

sales, measured by – Absolute numbers– As a percentage of total front end numbers

Store specific goals on labor hour reduction/reallocation

Store specific goals on customer service levels (e.g., number of shoppers waiting in line)

Measure goals weekly and communicate absolute and relative performance of all self checkout stores


Training on best practices Complete training provided to all stores

– Initial start-up training– On-going support and re-training for all front end

associates, particularly new associates Incorporate SCO training into present front end

training – Leverage PSI-developed training materials– Develop internal training programs and documentation– Leverage internal SCO experts


Best practice #1: ACM lanes always open SCO lanes open when the store is open, handling

express and full service– Close only for maintenance, cash loading or balance

closing – At off-peak hours, set up conventional lane nearest SCO

lanes or customer service desk to accept suspended orders

Staff lanes with a trained SCO cashier Use signage and consumer education material to

drive usage Change “express lane” signage to accept full or

express sized orders to accommodate traffic volume


Best practice #2: Appropriate staffing and training Assign the most customer friendly associates to the

SCO lanes Train SCO lane associate to be available at front of lane

to assist customers– Scan for customers who want full service– Encourage new users and show them how to use the lanes– Answer questions and guide use– Bag for customers to increase service and throughput – Enhance security through presence at the lane

Provide dedicated baggers if available at other lanes Train all store associates, particularly front end

associates, on use of SCO


Best practice #3: Actively manage entire front end Adjust front end schedule to achieve labor reallocation

goals while maintaining service levels– Reduce conventional lane hours, especially during off peak times

Open conventional lanes as full service lanes first and as express only when needed

Open conventional lanes near SCO lanes first, then spread out

Open conventional express lanes only when third conventional lane needed

– First express located next to SCO lanes, then full service next closest

Close non-productive conventional lanes and reallocate labor to other departments


SCO cashier responsibilities Consumer friendly and proactive with assisting

customers Work at lanes, not at paystation as much as possible Remain at SCO lanes, do not leave to perform other

tasks Priority of tasks

– Tender at the paystation when needed (< 10%)– Help customers at lane– Proactively seek new customers– Help customers bag their orders– SCO lane area maintenance


During off-peak periods use flexibility of SCO lanes– Close conventional lane and reassign cashier to other tasks

During busy periods at the SCO, assist SCO cashier – Bagging customer orders– Providing assistance to customers at the lanes– Proactively seeking new customers

Schedule SCO lanes and front end as one– Utilize SCO lane capacity to absorb conventional lane volume during cashier breaks and lunches

Schedule SCO lane training for new front-end associates Manage SCO lanes as part of overall front end

Front end supervisor responsibilities


Store management responsibilities Provide positive environment for SCO success

– Provide support to SCO lane staff– Ensure qualified associates are assigned to SCO lanes during

scheduled hours Communicate SCO benefits to store associates and

customers Manage SCO as tool to improve store performance

– Strive for improvement, review store performance and front end labor schedules regularly

– Monitor performance of the lanes, using SCO and POS reports


Summary: Significant improvements are achievable

Requires:

Management support

Goal setting and measurement

Training on best practices

A N Y S I Z E O R D E R, A N Y T I M E Jewel Osco and PSI January 8, 2003.

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