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Here’s Woolworths’ latest technology idea to grow supermarket profit

Tristan Harrison
woolworths share price

Woolworths Group Ltd (ASX: WOW) is trying out some new technology to see if it can grow supermarket profit and the share price.

One of Woolworths’ newest supermarkets has been fitted with two innovative ideas according to reporting by News.com.au.

The first is trying to fix a problem caused by another bit of technology. Self-serve checkouts have allowed many more customers to be served at once for little ongoing cost because there’s only one employee for the whole zone, rather than one employee for each customer that’s paying for their purchases.

But at the busy times of day the self-serve checkout area can become packed with people and trolleys.

To solve this problem, a Melbourne store and Sydney store have been installed with a larger self-serve machine and it includes a conveyor belt. It’s just a trial at this stage, but you can see how this could improve margins a little for Woolworths if it’s not needing to pay an employee to check out some trolley customers, who are then paying for their shopping quicker themselves than using a normal self-serve machine.

News.com.au quoted a Woolworths spokesman, “It’s about providing another convenient option for customers and is designed to complement the manned check-outs and traditional self-serve options at the store. We want to give our customers choice, so they can pick the checkout option that works best for the shop they’re doing on any given day.

“We’re pleased the Millers Junction store will provide ongoing employment to more than 100 team members, many of whom will work at the front of store to serve our customers.”

The other piece of technology that is being tested is a safety robot which goes around the store and alerts staff about any spills or safety hazards on the shop floor. It has apparently led to a significant reduction in trips and slips compared to other stores.

Foolish takeaway

It’s nearly always a good idea for a business to try out new technology to see if it will make a difference. Woolworths will be relying on customer feedback to see whether to roll out the conveyor belt self-serve checkout nationwide, but it could be a useful addition for customers whilst very slightly boosting overall margins.

The post Here’s Woolworths’ latest technology idea to grow supermarket profit appeared first on Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019