Piggly Wiggly Finds the Right Touch

 
 
By Andrea Orr  |  Posted 2005-07-18
 
 
 

Piggly Wiggly Finds the Right Touch


Charleston, S.C., is a refined Southern city where people go about their business in an unhurried fashion, more focused on civility than speed.

The Piggy Wiggly Carolina Co. chain of grocery stores—which is based there—seems, at first glance, to be far from the cutting edge of efficient retail technology. Company executives speak with a soft languor, even when discussing the most serious business matters. And the official corporate Web site playfully directs all correspondence to an e-mail address that ends with "ThePig.com."

Today, no one remembers how the grocery store chain got its odd name in the first place, but Piggly Wigglys long-standing commitment to customer service is legendary. When the first Piggly Wiggly opened its doors in 1916 in Memphis, Tenn., it offered a radically different way of shopping, featuring wide-open aisles at a time when other markets stocked goods behind a counter and employed clerks to retrieve individual items.

Even in the tradition-steeped antebellum South, Piggly Wiggly understood that no one wanted to spend all day buying groceries. Almost a century later, Piggly Wiggly continues to seek ways not only to make shopping more convenient but also to find more customers.

Never mind popular innovations such as bar-code scanners and debit card readers that have been broadly adopted by all grocery stores. Piggly Wiggly focuses on the room for improvement remaining, said Rita Postell, manager of employee and community relations at Piggly Wiggly Carolina, a chain of 118 Piggly Wiggly franchise stores.

When Piggly Wiggly discovered that fingerprint-reading technology, after decades of development, had become cheap and reliable enough to be deployed on a broad scale, it recognized benefits beyond speed and efficiency, said Postell. What better way to capture information about your customers while easing concerns about identity theft than with a payment process that lets shoppers seal transactions with their fingerprints?

"People can steal your identity but not your finger, at least not usually," she said.

While improving the shopping experience had been a long-standing goal of the company, the escalating cost of credit and debit card transactions has in recent years become a more pressing concern.

"It had gotten huge over the years," said Rich Farrell, vice president of information services at Piggly Wiggly Carolina. "Eight years ago, there were no electronic payments. Now, they are a huge item on the bottom line."

In October 2003, Farrell traveled to an electronic payments conference in search of a new payment solution that would satisfy the concerns of both its convenience-minded customers and its cost-conscious management.

It was at that conference that Farrell learned about Pay By Touch, a San Francisco company that sells merchants a simple fingerprint-reading technology that consists of a compact finger scanner that can be attached right next to the credit card readers, as well as an under-the-counter box to process the transactions. Like the other alternative payment systems, Pay By Touch transfers money via the Automated Clearing House network.

Under Farrells recommendation, Piggly Wiggly launched a pilot program to test Pay By Touch in a small group of stores last fall. The test run went so well it was quickly expanded to a companywide rollout.

Shoppers who signed up for the new payment system were able to open accounts that linked either to credit card accounts or to checking accounts. They could link all Pay By Touch transactions to their store loyalty cards as well, so they could get credit for shopping at Piggly Wiggly without having to carry the loyalty card.

"The project really was quick and easy," Farrell said last month, shortly after the 118-store rollout was completed. "Problems were few and far between."

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The launch did not, however, go off without a hitch. Piggly Wiggly had to spend several weeks writing its own software to link the Pay By Touch technology to its existing transaction network. Because biometric technology is still not foolproof, the system occasionally fails to read fingerprints of people with rough or extremely calloused hands.

"For people who might work in construction or some other field that is hard on the hands, their fingers are harder to read," said Eric Bachman, Pay By Touchs chief operating officer. Bachman said the company had opted to employ a high level of scanning sensitivity that would eliminate the risk of a false positive or a finger being misidentified.

Like Farrell, Bachman concurs that introducing the fingerprint scanners to stores and shoppers was almost surprisingly simple. Once consumers drifted to the in-store kiosks out of curiosity, it was easy to get them to stay and complete the 2-minute registration.

Of course, the development of the underlying technology had been far more painstaking. Pay By Touchs product is the result of decades of research into biometrics. Long a futuristic-sounding concept that was touted at trade shows but not deployed broadly, biometric technologies such as fingerprint scanners remained on the margins of high-tech innovation until the terrorist attacks of Sept. 11, 2001, sparked interest in hacker-proof identification technology.

"Sept. 11 was really an event that brought biometrics onto the map in so many ways," said Bachman. "A lot of investment was made, and costs came down."

Since it was founded in 2002, Pay By Touch has acquired rights to multiple biometric patents and has refined the underlying technologies for use in retail.

Piggly Wiggly Carolina spent the early months of this year introducing the Pay By Touch technology to all its stores, and the rollout was completed last month.

In fact, initial statistics reflect consumer adoption rates that are more stunning than just satisfying. Just months after Piggly Wiggly introduced the service, it is finding that between 15 and 20 percent of its noncash customers, or those who typically paid by check, credit card or debit card, now use Pay By Touch, said Postell.

Among those early adopters is a surprising number of people who fall into a demographic thought to be fearful of technology. Postell said that many seniors had been quick to switch to fingerprint payments, which upon reflection made sense. Many of those seniors, she said, indicated they were as concerned with offline theft as they were with identity theft and were grateful for a system that let them go to the market free of any encumbrances that could be lost or stolen.

Even the companys own clerks quickly took to the technology, finding it a convenient way to make small purchases such as a can of soda or a pack of gum when they were on short breaks and had their wallets tucked away in employee lockers.

Judging by loyalty card statistics, Piggly Wiggly has found that its Pay By Touch consumers are not only moving through the checkout line more swiftly but also coming back to the store more often.

"They are buying more than they used to. It must be the ease of the purchasing process," said Farrell. "When we first purchased this technology, we were looking for a payment system that would enhance speed, convenience and security, and this does all three," he added. "It is still so new to market, but we really feel like it is the wave of the future."

Andrea Orr is a free-lance writer in San Francisco. Contact her at andrea_orr@sbcglobal.net.

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