Unlike industrial companies, METRO GROUP as a retail and wholesale company does not conduct research and development in the strict sense of the term. For this reason, there are no important expenses to report.
But we do practise innovation management in order to exploit new concepts and technologies for the good of our sales lines and companies. By taking this approach, we intend to provide customers with further added value – through new business models, attractive product ranges and improved processes. Furthermore, innovations help us to achieve our sustainability goals. As a result, innovation management does its part to fuel positive, long-range growth in sales and earnings at METRO GROUP.
You will find examples of the innovative products and services offered by our sales lines in the chapter “Strategic positioning of METRO GROUP”.
Customer centricity creates a critical competitive edge in retailing: those companies that have a deep understanding of their customers’ needs, shopping habits and lifestyles are the only ones that can offer the right products and services to these individuals. For this reason, our innovation management is designed to identify technological and social trends – even outside our core business – at an early stage, to assess their impact on retailing and to devise specific solutions for our Company.
In the process, we systematically tap the know-how and experience of our own staff working in all divisions of the Company. We also maintain a close partnership and a structured network with external companies and organisations to keep track of the increasingly dynamic development of products and services.
Teaming up with internal and external partners, we refine specific solutions for our own retail business and test them under real business conditions. If the innovations live up to our expectations, we will introduce them step by step in our stores. This process is always carried out in line with the specific needs of our sales lines.
METRO GROUP Future Store Initiative
One example of a networked partnership with external partners is our METRO GROUP Future Store Initiative that we set up in 2002. Today, this alliance includes more than 75 companies and organisations from the scientific community, the consumer goods industry as well as the service and the information and communication technology sectors. We jointly test innovative solutions designed to meet the challenges of our operational business. The ultimate aim of these partnerships, which we continued in the reporting year, is creating added value for the customer.
A central testing platform for the initiative is our Future Store in Tönisvorst, a city in the western German state of North Rhine-Westphalia. This store is a Real hypermarket where the sales line has been testing new concepts and technologies under real-world conditions with the assistance of the initiatives’ partners since 2008. Innovations that prove themselves in the Future Store are then introduced step by step at Real. Away from their work with the Future Store, our alliance partners also test new technologies and concepts under real-world conditions. These concepts include
- a digital management system for product shelves,
- an IT platform for customer coupons,
- a checkout system for restaurant customers and
- the use of Radio Frequency Identification (RFID) on the product level.
Digital management and marketing system
To support product introduction and provide customers with increased orientation in the store, the partners of the METRO GROUP Future Store Initiative have developed the Shelf-Vision Concept. This concept combines digital multimedia labels and flat-screen monitors that can be attached to chilled display cases. In addition to static product information and QR codes, short videos can be shown on the labels as a way of drawing customers’ attention to certain products. The monitors are used to thematically and optically organise the product groups. Real began testing the Shelf-Vision Concept at the Future Store in December 2012.
Electronic coupon solution
As part of the Future Store Initiative, Real has also introduced a so-called validation platform for customer coupons. Essentially, this is a computer system to which all checkout counters in the hypermarkets are connected in order to confirm the validity of coupons. Thanks to this application, digital coupons can be offered. Using their smartphones, Real customers can select the desired coupon and redeem it at the checkout counter. They do not have to carry any paper coupons in order to save money while shopping.
While the validation platform was being introduced, the Company carried out a standardisation programme involving digital coupon management that has been embraced by the committees of the responsible international organisation, GS1. As a result, the sales lines of METRO GROUP no longer have to use the patented systems of external companies.
Real is also using another new type of coupon system for reverse vending machines used by customers to return empty containers. The benefit: along with the container refund receipt, customers receive coupons right before they start shopping. As a result, they can be targeted more systematically.
Technical support for professional customers
A modular software package specifically designed to meet the needs of the professional customers of METRO Cash & Carry has been developed by our internal IT service provider, METRO SYSTEMS and external partners. The components of this business suite are an iPad checkout system and a customer loyalty application.
The checkout application known as METRO POS is designed in particular for the young generation of restaurant operators who are interested in trying new technologies. A restaurant’s wait staff will use an iPad to take customers’ orders. The device then wirelessly transmits the information to the checkout system. A ticket is automatically printed for each order, and the kitchen staff can then use it to prepare the order. The solution helps to streamline order and payment processes and to significatly cut waiting times. In peak times, the kitchen’s work can be reduced by up to 80 percent. During the reporting year, new functions were added to METRO POS, which is available in 3 versions. The application is already being used in several restaurants. The official product introduction was made in September 2012 at the Hogatec trade fair in Essen.
With the second module of the business suite, the professional customers of METRO Cash & Carry can design their own customer loyalty programmes. Restaurant and coffee bar owners can use the software to issue their own coupons or discount vouchers that can be redeemed via smartphone. This module was successfully introduced in a test project in 2012 conducted in conjunction with a Düsseldorf restaurant.
Radio Frequency Identification on products
Our Company is one of the retailing pioneers in the use of Radio Frequency Identification (RFID). With this technology, product movements in the supply chain can be automatically recorded and then wirelessly transmitted to IT systems. Up to now, we have primarily used RFID on such carriers as pallets. During the reporting year, we tested the technology on the product level as well. At MAKRO Cash & Carry Netherlands, transponders were attached to individual products from selected partial assortments. Transponders are tiny computer chips equipped with antennae that can be read without physical or visual contact to scanners. In this test, the technology was used to secure the products and optimise inventory management. During the test, the technical applicability and the commercial strengths were demonstrated in a productive environment. Using these findings as our basis, we will determine in 2013 the extent to which the system can be introduced nationally. A similar test was conducted in 2012 by Media-Saturn in Russia with CDs and DVDs. We completed the necessary technical installations in a logistics centre and a consumer electronics store in 2012. We expect to have the initial test results in mid-2013.