Natural Foods Merchandiser

Tech Boosts Info-Based Merchandising

Naturals retailers and pharmacy owners have known all along that giving their customers articles and books on the products they sell helps differentiate their stores from mainstream retailers and improves sales. But now they can accelerate the process with high-tech installations.

For decades, Steve Hoose and his wife paid for magazine subscriptions to have information on specific products available for customers of Perelandra Natural Food Center, their Brooklyn, N.Y., naturals store. But a couple years ago, Hoose decided to dump the magazines and invest the savings in a Healthnotes information kiosk.

Perelandra "is not a high-tech store," Hoose says. Nevertheless, the kiosk is prominently displayed at the end of his biggest aisle.

The kiosk is a touch-screen affair that lets customers instantly access information varying from prescription/nutritional supplements interactions to how to cook a turnip. He says about 50 people a day use the machine. "We had to have this thing be very customer friendly," Hoose says. "You couldn't have a keyboard-and-mouse set up and expect people to know how to use it."

Portland, Ore.-based Healthnotes Inc. is an authority in publishing research on nutritional supplements.

Independent retailers were the first—and remain the most loyal—audience for the kiosk product line, says Healthnotes President and Chief Executive Schuyler Lininger. The product was designed to a large degree with naturals retailers in mind. "Retailers in the health food industry have to compete on more than price," he says. "That is becoming difficult with so much new information coming out every year."

"If we educate people, they'll trust us and if they trust us, maybe they'll buy our products."
However, Lininger and other executives charged with introducing high tech to health food stores say that not all efficiency-improving devices will gain traction. Many store owners—Hoose among them—are highly skeptical about automating certain processes. They're afraid of losing what sets them apart from conventional and mass-market stores—a high-touch relationship with their customers.

"The basics in the industry have not changed at all, and some of the high-tech stuff can be adjunct to existing efforts. But if you think you can change something in the existing setup through technology, you will get in trouble—for example, if you think more technology justifies less personal contact in an area like customer service," Hoose says.

So it took a company like Healthnotes to win over the hearts and minds of health food retailers. Started in 1986, the company produces its own content by tapping authors of articles in 550 medical journals to tailor their content to be easy to read and understand. The articles are then displayed in Healthnotes kiosks.

"We review hundreds of journals, and hundreds of thousands of articles get triage," Lininger says.

Healthnotes' reputation, not its technological savvy, was the primary reason Hoose decided to go with the company. Tapping a solution that got an award for technological innovation from Computerworld-Smithsonian didn't hurt either. Healthnotes' Lininger says the kiosk, which is sold as a hardware-software combination, with an annual maintenance fee that covers editorial content updates, pays for itself in three to four months. Customers not only linger longer in the store, but owners get a glimpse at what's on customers' minds by correlating Healthnotes searches and daily sales logs.

Comparing Notes
Let's say a particular store had a run on calcium supplements. Store owners might not know what to make of it unless they establish a close rapport with customers. But a Healthnotes report would reveal numerous inquiries about mild hypertension, which can be treated with calcium supplements.

"Such intelligence helps with identifying merchandizing trends and with the whole marketing approach in individual stores," Lininger said.

The latest trend with Healthnotes' customers is placing the kiosks in particular supermarket departments, like seafood as opposed to meats. Large customers, like Seattle-based PCC Natural Markets, are finding that customers begin to associate Healthnotes terminals with shopping at their stores, so they plan to locate kiosks in specific supermarket sections, as soon as these facilities are built.

Healthnotes also builds Web sites for natural foods stores. The articles Healthnotes puts on the Web are more in-depth than the short bits that can be displayed and printed from a kiosk touch screen.

Onsite Innovation
Despite its growing popularity and nationwide recognition, serving up short, product-savvy information is not Healthnotes' private turf. A lot of innovation in technological delivery of information to customers occurs at pharmacies, which historically are a more computerized and sophisticated group of retailers because of big investment into computer training and specialized software needed to fill out prescriptions and obtain reimbursement from insurers.

Elephant Pharmacy in Berkeley, Calif., is in the midst of an initiative to merchandise product information storewide in an effort that involves in-house editors, patented processes and laser printers.

"The vision behind the company was to create a store that would have the widest possible variety of products under one roof, and giving customers information helping them to make a choice among this variety," says Stuart Skorman, Elephant Pharmacy chairman and chief executive.

Throughout the pharmacy, special gondolas that serve up detailed product information are affixed to every shelf. Shoppers visiting the pain relief aisle, for example, may pull on a tab beneath the aspirin bottles and read about the uses of the drug and the contraindications. The gondola pullout tray as a method of serving up product info is patented, and Elephant is looking for ways to license it to other retailers.

Skorman says the next phase in Elephant's information program is to add laser printers at the check stands, which would help sales clerks give customers free brochures listing detailed information associated with medicine they just bought. All of those are just small steps to a complete information exchange utopia Elephant hopes to achieve someday.

"Eventually, upon entering the store you'd take out your own card and put it into a machine, which would tell you your prescription is ready and ask you how your cold is and give you a newsletter talking about your grandmother's breast cancer," Skorman says. "There will be this whole information structure where we are here to help you with whatever you want, and it would be easy for customers to access that—online, through a newsletter or information in the store."

While this vision will require some years in the making, Elephant Pharmacy was one low-tech step closer to it in February when the store moved some books into the product aisles. Elephant has been gradually increasing its literature department and expected to have about 4,000 book SKUs shelved this spring. "We have books on sex near the contraceptives and nutrition books near the supplements," Skorman says. "If we educate people, they'll trust us and if they trust us, maybe they'll buy our products."

Max Smetannikov is a freelance writer in Washington, D.C. He may be reached at [email protected].

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