You are to prepare a critical review of this case study comparing the use of ITC with current implementations. Particular emphasis should be placed on Information Systems and their use. Your review should also look at emerging technologies and discuss the impact they may have on a business such as Price Chopper.
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Price Chopper is a chain of 80 24-hour supermarkets in New England. The stores vary considerably in size, but average about 12 checkout counters. It is headquartered in Shenectady, in upper New York State.
During the last few years, Price Chopper has applied information technology (IT) very aggressively, particularly to its Point of Sale (POS) operations. It is worthy of a case study both because of the comprehensiveness of its IT strategy, and because several elements of the system are at the leading edge.
This document comprises a brief summary of the applications, supported by documents prepared by Larry Friedman, Vice-President Financial Services of the Price Chopper holding company, Golub Corporation. It is based on a presentation by Larry at an IIR Conference on Plastic Cards, in Sydney, on 18 March 1994. The details have not yet been checked with him. BACKGROUND
In 1976, a local bank network installed clerk-assisted Point-of-Banking (POB) terminals at the service desk in each Price Chopper store. In 1983, it installed ATMs at selected high-volume locations. Watching the progressive growth in popularity of the financial services available on its premises, Price Chopper resolved to offer a more extensive set of services. The attractions were to increase sales volume in its shops, to ensure control over decision-making about what was installed where, and to profit directly from these lines of business. In the mid-1980s, Price Chopper installed its own ATMs and POBs at customer service desks throughout the chain. These complement the other services offered at those locations, including photocopying, fax and Fedex courier despatch. In 1989, the company installed its own network, and a Stratus-based fault-tolerant switch and transaction-processing node. This captures a variety of financial transaction-types and passes them on to the relevant financial institutions. Additional aspects of the services, discussed below, are EFT/POS terminals at every checkout counter, supporting a variety of payment mechanisms; and a 'do-it-yourself' checkout system on trial at the Clifton Park store. In addition, EDI is being extended beyond purchase ordering to encompass advance shipping notices, invoicing and payment.
The majority of transactions at U.S. checkout counters are still cash (roughly 55% of transactions and 40% of value). Cash is the cheapest form of payment transaction for the company (about 7 cents per transaction). It has no desire to wean customers away from cash, and its cashless alternatives have...