Why Woolies boss is looking at start-ups to never run low on bread again

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Technology is revolutionising the way supermarkets do business but Australian shoppers aren’t yet ready to embrace some of the futuristic innovations retailers are trialling, Woolworths chief executive Brad Banducci says.

“Technology has become crucial to the future of retail – this is the key for us,” Mr Banducci told Fairfax Media on the sidelines of the National Retailers Federation’s annual expo in New York City.

Mr Banducci was scouring the expo on Tuesday looking for the latest innovations from tech giants and start-ups that could be used in Woolworths’ almost 1000 stores.

Among those that caught his eye was a new barcode scanning technology from software company Digimarc which embeds a code that is imperceptible to the human eye into a product’s packaging design, meaning any part of the item can be scanned at checkout.

The technology has been used by US supermarket Wegmans on its entire range of home-brand products, and Digimarc says it speeds up checkout scanning times by 30 per cent.

“We know our shoppers will let us use their data to help them have a better shopping experience, but we’ve got to be very cautious,” Mr Banducci said.

Several exhibitors at the conference are pitching software that uses cameras and image recognition software to monitor product levels on shelves.

“If you want to upset a customer, don’t have bread,” Mr Banducci said, adding that technology that alerts store managers whenever stock was low was a “fantastic” tool.

Similar technology was being used to check the accuracy of online orders before they are collected or shipped, and to monitor supply chains.

Mr Banducci said he spotted a couple of other attractive technologies that “we’d rather keep to ourselves”.

Some of the most significant advances in the way supermarkets operate have happened recently in China, where some shoppers do not ever encounter a staff member or checkout.

Some Suning and Alibaba stores use facial recognition software to identify customers and automatically charge their bank accounts for the products, which are tagged with sensors, they walk out with.

Mr Banducci said Woolworths could be doing similar things if it wanted to, but had to tread carefully around customers’ privacy concerns and privacy laws.

“I don’t know if the Australian consumer is ready for it. Maybe the next generation will be,” he said.

“We know our shoppers will let us use their data to help them have a better shopping experience, but we’ve got to be very cautious.”

Woolworths recently introduced a suite of digital innovations at its Marrickville Metro store, including installing touch screens to tell bakery staff what they needed to bake and when, and enabling an in-store product finder in its app.

“We’re doing a lot of learning and proof of concepts in that store before we take it to further roll-out or further enhancements,” said Fay Ilhan, Woolworths’ head of e-commerce sales and digital innovations.

Those changes were driven by the company’s new division WooliesX, which was formed last year and brought together its digital, e-commerce, customer loyalty and customer services teams in an effort to drive innovation at the 93-year-old supermarket.

“There is as much opportunity to digitise the back of house as the front of the shop: how you sign in contractors, how you figure out how many chickens to cook – there’s amazing opportunities,” Mr Banducci said.

The reporter attended NRF as a guest of Microsoft.

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