Piggly Wiggly Finds the Right Touch

Case Study: A new biometric payment system gives the old-fashioned Piggly Wiggly grocery chain a whole new way of making customer contact.

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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