EXECUTIVE TECHNOLOGY
May 2001

New York - Disparities between in-store price displays and actual product price are a common retail problem.

Macy's East may have found the solution. The company plans to install a dozen electronic signs in the kids' section of a test store in Bridgewater, N.J. The company's senior merchandisers here will operate the battery-powered signs remotely, uploading the information that will be displayed on them via a wireless network. This will eliminate manual price updates and should result in fewer mistakes.

"The immediate benefit and driving force behind the solution is pricing integrity, to make sure the price on the sign is correct," said Benjamin Diss, director of information systems at Macy's East here. "The senior merchants are going to be making the changes themselves, over the network to each individual sign." He added. "They're going to watch this very closely."

Any wireless price change will be reflected on the signage in real time, so the retailer could potentially use the solution to announce temporary or impromptu offers on products. "You can hold store-buster sales where you set special prices and change the signs to reflect that," said Diss.

But, price integrity is just one potential benefit of the electronic signs - and not necessarily the most significant. While Diss declined to discuss any additional gains in detail, the retailer is clearly anticipating the possibility of sales lift. There will probably also be substantial savings in labor and material costs.

The signs, a product of Gyricon Media, New York, consist of plastic frames, inside of which are about 30 million bi-color magnetic spheres, each no bigger in diameter than a human hair. These spheres collectively form images as some rotate to show their white side, while others reveal their black side.

Macy's believes the signs' upkeep will be relatively simple. "Because it is electronic paper, there is no LCD (liquid crystal display) or LEO (light-emitting diode)," said Diss. "There are no high-powered requirements. It's battery-operated, and we're looking at a battery life span that's measured in years."

For the past few years, Macy's East has been experimenting with electronic signage technology in a few select locations, but those signs feature LCDs.

According to Diss, there are plans for expanded testing of the technology in spring 2002, provided the technology proves to be a success. "And we believe it will," he said. "Electronic paper is going to revolutionize the way that retailers create signs."

The 11-by-14 inch signs will be attached to fixtures placed across the center aisle of the test store's Macy's Kids section, also called KidsZone. During the test period - June 1, 2001 to Jan 1, 2002 - the signs will display primarily product names and prices.

Macy's East is a division of Federated Department Stores, Cincinnati.