The checkout clerk is doomed, that last survivor of human warmth in most of today’s supermarkets. His eventual executioner will be the electronic computer, of course. Pilot systems using computers for automatic checkouts are already drawing a bead on the jovial little man in the green smock. Eventually even he will disappear from the faceless canyons of our sleek supermarkets.
But the writer finds a ray of hope in the conclusion of his editorial.
Skilfully designed packages can strike an emotional chord in the consumer, can create strong brand preferences even in the absence of product differences. Supermarkets can give the appearance of being a friendly, “human” place to shop even if the only humans visible are the customers.
To make more complete the rout of conventional merchandising by the computer-oriented system is the plan to automate even the trading stamp. American Premium Systems, Inc., a Texas firm, is developing a plan in which the customer receives a coded plastic card instead of a stamp book. When he makes a purchase, a card is punched with the number of credits he has earned. By means of a centralized computer, an IBM 1401 in this instance, records are kept continuously, and when the customer has accrued 1,500 points he receives a premium automatically. The obvious advantage here is to the customer, who is spared the messy task of licking thousands of evil-tasting multicolored stamps, and the danger of losing the book before redemption. But the storekeeper profits too. He does not risk the loss or theft of stamps, nor does he buy stamps for people who are not going to save them. The complete system will call for an IBM 7074 and represents an outlay of about $3 million to service some 6 million customer accounts.
Before leaving the area of merchandising, it might be well to mention inventory management in general and the effect of the computer upon it. Applying what is known as “conceptual order analysis,” one marketer who is using computers in his business talks of “warehousing without bricks or mortar.” With a confidence born of actual testing, his firm expects one day to have no inventory except that on his production lines or in transit to a customer. This revolutionary idea is based on practically instantaneous inventorying, production ordering, and delivery scheduling. While the warehouse without bricks or mortar is not yet a fact, research discloses many manufacturers who have already cut their standing inventories, from small amounts to as much as 50 per cent, while maintaining customer service levels. This was done using what by now are “standard” electronic information-handling methods. The implication here is of the computer not merely as a data-handler, but as a business organizer and planner as well.
Electronic Ticker Tape
The stock market lends itself to the use of high-speed data-processing, even though a Wall Street man achieved notoriety some time back as the first embezzler to use computer techniques. Admittedly it is harder to track down the hand in the till when it pushes buttons and leaves no telltale fingerprints or handwriting, but computerization continues despite this possible drawback. The same firm has added digital computers to one of its offices for faster service. The American Stock Exchange installed $3 million worth of new processing equipment to provide instantaneous automatic reports on open, high, low, close, bid, asked, and volume-to-the-moment figures.
International Business Machines Corp.
On the floor of the New York Stock Exchange, representatives of Thomson & McKinnon and IBM discuss a model of the computing system which will speed transactions from the offices of the brokerage houses in 41 cities to the New York and American stock exchanges.
The stock market’s need for the computer lies in the usual two factors: tremendous paperwork and increasing pressure for speed. Trading of stock amounts to about three-fourths of a billion shares in a year, and occasionally 3 million shares a day change hands. A major brokerage house has confirmations to handle on thousands of trades, dividends to credit to nearly half a million active accounts, and security position and cash balances to compute for each customer. The increasing amount of business, plus the demand for more speed and accuracy, make the computer the only solution.