From cellophane to QR codes: Supermarket technology through the years
While changes today may be more complicated, they’re all focused on the same goals grocers and other retailers had more than a century ago: To offer better food, more efficiently and stand out.
A century ago, most grocery stores offered a limited selection of dry goods and didn’t let people choose their own products. Instead, shoppers had to place their order with a clerk who collected the products — usually from a back room — and totaled everything up. Pricing wasn’t standardized, and neither was quality.
While the experience is very different today, grocers continue to pursue the same opportunities they have for decades. They’re still pushing for faster checkouts and easier ways to pay. Many supermarkets also are streamlining their distribution systems and seeking out innovative new products.
In some cases, innovations from the past have come full circle. Home delivery was one of the first services early grocers offered, and local sourcing was widely practiced.
As today’s grocery experience migrates online and onto mobile phones, and as retailers employ sophisticated systems to better manage their operations, it’s helpful to look back at the past as a reminder that the push for better retail technology is ongoing, full of recurring themes and illuminating ideas.
The rise of self-service grocery
In 1879, one of the most ubiquitous technologies in the supermarket industry got its start when James Jacob Ritty, a bar owner from Dayton, Ohio, patented the first cash register. The invention was meant to keep employees from stealing by keeping a running sales tab. And while “Ritty’s Incorruptible Cashier” didn’t deter thieves, it did inspire a new way of logging transactions. After being acquired, Ritty’s register company was sold in 1884 to John H. Patterson, who renamed it National Cash Register, or NCR, which is still in operation today.
For years, customers relied on clerks to gather and process their orders. Then, in 1916, a southern wholesaler named Clarence Saunders opened Piggly Wiggly, the world’s first self-service grocery store, in downtown Memphis. Shoppers walked along a single, winding aisle, and for the first time could select products themselves. Everything from barrels of pickles to chocolate bars and Campbell’s Soup was now within reach.
Of course, not everyone was thrilled with the concept. According to a biography of Saunders, a woman refused to touch a pound of butter herself. Instead, she went across the street to a grocer that charged more.
As revolutionary as it was, Saunders’ Piggly Wiggly was still missing a few key categories — namely, produce, meat and other perishables. Although refrigeration technology stretched back to the early 1800s, it wasn’t until the mid-1920s that this technology became commercially viable, according to Michael Ruhlman, author of “Grocery: The Buying and Selling of Food in America.”
“Commercial refrigeration units allowed for the creation of the supermarket, a single store that sold not just groceries, but also meat, seafood, dairy and produce,” Ruhlman writes.
The modern supermarket
In 1930, former Kroger employee Michael Cullen built a large store in Queens, New York that offered groceries as well as perishable products, all at low prices. During the Great Depression, Cullen rapidly grew his King Kullen stores, which in addition to having everything under one roof also offered another novelty: free parking.
The modern supermarket had come to America.
Positioning supermarkets as a one-stop shop, of course, meant customers had more products to carry. Throughout the 1930s, most shoppers lugged their items around in large baskets — a labor-intensive practice that a man named Sylvan N. Goldman eventually made obsolete.
In 1937, the Oklahoma City grocer built the industry’s first shopping cart, which he fashioned after a folding chair. The new-age device had wheels attached to the legs and two baskets perched atop the seat. “It’s new — It’s sensational. No more baskets to carry,” read an ad for Goldman’s invention.
Despite its revolutionary design and function, customers hated Goldman’s shopping cart. Men thought that pushing one around would make them look weak, while women thought it looked too much like a baby carriage. Still, Goldman persevered, going so far as to hire models to push carts through his Humpty Dumpty stores. Three years after he invented the shopping cart, Goldman had a seven-year waiting list for orders.
As supermarkets grew, food companies found new and attractive ways to display their products. The adoption of cellophane in the 1920s proved to be a boon for grocery stores, with the transparent material serving as quality packaging that let shoppers see the product before they purchased it. DuPont, one of the leading developers of cellophane, saw the material’s potential to boost impulse buys. In a report distributed to merchandisers and retailers, DuPont stated that half of all purchase decisions happen in the store, and that “point of sale factors, such as display and packaging become all-important to stimulate unplanned, impulse buying.”
New ways to pay
Processing lots of customers and selling at high volumes meant supermarkets needed to streamline their payment options. Credit cardshad their roots in metal charge plates offered by department stores in the 1920s, according to “Paying with Plastic,” by David S. Evans and Richard Schmalensee. It wasn’t until the Diners Club card came out in 1950 that the format finally gained mainstream approval.
Accepted only at restaurants, Diners Club nevertheless grew quickly and inspired other providers. In 1958, American Express and Bank of America came out with credit cards, but the “BankAmericard,” as it was called, was the only option made for use at outlets other than restaurants and entertainment venues.
To promote adoption, Bank of America staged an audacious publicity stunt, mailing out 60,000 pre-authorized cards to customers in Fresno, California. The “Fresno Drop,” as it became known, spurred widespread fraud and late payments that cost the bank millions — but it also raised awareness. By 1961, Evans and Schmalensee said, the BankAmericard turned a profit for Bank of America.
Still, payment technology had a long way to go. In the 1960s, electronic cash registers, spurred by the growth of the first electronic desktop calculators, began showing up in stores. By the 1970s, they dominated the market, according to the Smithsonian Institute. Despite this, the checkout process wasn’t quite fast enough for supermarket operators who were welcoming more customers and stocking more products than ever before.
In 1974, the Universal Product Code, or barcode — first imagined in 1949 by an inventor who drew four lines in the sand at Miami Beach — was implemented. The store was a Marsh Supermarket in Miami County, Ohio. The first product, a pack of Juicy Fruit gum, was selected to show how small the barcode could be printed. A team of engineers looked on as the price popped up on the register display, and they felt certain the UPC would become huge. This didn’t appear likely at first, but as mass merchants such as Kmart and Walmart adopted the technology in the late 1970s and early ‘80s, it quickly took off.
Online ups and downs
In the late ‘80s, just as ATMs were becoming widespread in the U.S., an emergency room physician and part-time tinkerer named Howard Schneider got an idea: What if grocery stores could implement a technology that did for food buying what ATMs did for money withdrawal? Schneider, who also had an engineering degree from MIT, went to work at his home in Montreal, and eventually came up with a self-checkoutmachine.
Schneider took his new machine to trade shows across the U.S., and pitched the concept directly to supermarket executives. Many said ‘no,’ but finally Price Chopper said Schneider could test the machine in its store. On August 5, 1992, the first self-checkout debuted in Clifton Park, New York.
Just two years later, Pizza Hut became the first food company to implement online ordering with PizzaNet, a program that ran in the Santa Cruz, California market. A Los Angeles Times headline in 1994 declared: “On-Line Pizza Idea Is Clever but Only Half-Baked.” The first grocery e-commerceoperation came a few years later when Louis Borders, the founder of Borders bookstores, founded Webvan.
Webvan had big ambitions, expanding to eight cities and investing $1 billion in warehouses and other infrastructure during its first two years. In 1999, the company raised $370 million in an initial public offering, with shares valued at $30 apiece. But it soon became apparent that slim margins and low consumer demand couldn’t support Webvan’s mission. The company eventually closed down in 2001. A young online retailer called Amazon scooped up Webvan for pennies on the dollar, and several years later relaunched the service in Seattle as AmazonFresh.
The 21st century has seen a flurry of technological innovations that have impacted the grocery industry, from faster, more intuitive online ordering to mobile payments and supply chain efficiencies. In 2008, Stop & Shop became the first grocer to test handheld scanners that let shoppers skip the checkout line. Three years later, QR codes began showing up on product packaging. That same year, a Singapore subway station posted QR codes corresponding to various food products that commuters could scan and order for home delivery.
And while the innovative gadgets and systems may be more complicated these days, they’re all focused on the same goals that grocers and other retailers had in mind more than a century ago: To offer better food, more efficiently and stand out in the marketplace.
