To consolidate information across all locations, data was printed out and then faxed or shipped to headquarters where it was re-entered into corporate information systems. Some of the more progressive retailers deployed remote access technology that could "poll" their stores for results, usually once or twice a day, via a dial-up modem connection to each store.
Today, retailers demand much more from a wide range of technology solutions deployed throughout their operations. They strive to move much higher volumes of information in close-to-real time to support market basket analysis, perpetual inventory, price optimisation, and vendor-managed inventory initiatives. Further, the number of smart devices in stores is exploding. Take for example self-check out scanners at Home Depot and countless grocers, the handhelds used for line busting at Sam's Club, and kiosks in McDonald's restaurants that allow customers to "configure" and pay for their meal and then pick it up at the counter.
It's not just about classic innovations in Point-of-Sale devices, or even the chip-and-pin initiative in the UK; mobile and wireless computing is now playing an increasingly important role, as are other intelligent devices such as footfall and drive-through monitors that raise visibility to store activity and operations.
While there has been a great deal of talk from technology analysts and others about the "real-time enterprise"(where information is captured and distributed as soon as it is available) and how the concept applies across all industries including retail, for many retailers there is just so much information that might possibly be collected and analysed that the real challenge is to create the "right-time enterprise." That is, businesses need to ensure that the right information gets to the right people at the right time, in a format which makes the information understandable and, above all, actionable.
Three consistent themes are underlying retail use of technology in creating the right-time enterprise: increase revenues, reduce costs, and enhance the customer experience. Relying on technology to achieve these goals first requires that retailers take steps to:
- Empower people, maximise technology--Ensure employees are engaged, trained and motivated to use information systems, while in turn, making technology both simple and reliable for the user.
- Gain frontline visibility--Enable visibility into what is really happening in the field and in the store - from both a business and a technology standpoint.
- Drive consistent execution--Centralise control over process execution and enforcement of corporate policies.
Retailers today are faced with a complex challenge when it comes to employees. How can an organisation balance the increasing complexity and the need for specialised knowledge within the store environment with the fact that employee turnover continues to mount and good help is hard to find? Retailers are rapidly turning to distance learning to train employees thereby increasing productivity, enhancing customer service and improving employee retention. To guarantee these results, companies must be able to get electronic training materials down to the stores and update this content in a timely and efficient manner. In addition, they must be able to track which employees have completed which training modules, and with what results.
At Captain D's, a chain of more than 500 restaurants located throughout the country, computer-based training videos that contain built-in testing modules are sent out once a quarter to each store location using Multicast and VSAT technologies. Every employee is expected to view these videos and managers back at headquarters can then review who has viewed the video, taken the test, and how well they did on it--all at the individual employee level.
Another area where technology can help employees increase productivity is the use of in-store handheld computing devices that enable unique new capabilities like queue-busting, which speeds the customer through the checkout process and improves the customer experience. Similarly, wireless stock control applications track and reconcile the availability of stock inventory, providing immediate updates to headquarters.
Gain frontline visibility
Retailers need to know what is really happening at every location across their retail enterprise. The continual decline in the price of technology has accelerated the deployment of intelligent devices that can provide unattended monitoring. Drive-through food outlets, for example, are finding that they can significantly improve efficiency and customer service by monitoring and centrally analysing the flow of cars through restaurant check-out lanes. With the immediate transfer of this information back to the production process, trends can be analysed that would suggest improvements to layout and process.
Checkers Drive-In Restaurants, the largest double drive-thru restaurant chain in the United States, has implemented a machine-to-machine system that collects individual drive thru times at each store and rolls that information back to headquarters for consolidation on an enterprise basis. Having this information available has helped Checkers design programs to improve operational efficiencies and increase same store sales by some 11 percent in the second quarter of 2003, according to published information.
Footfall monitors in retail stores are another important example of the need to link together a growing number of data sources, and act upon the information collected. Intelligent data collection can also help to optimise the supply chain, reduce stock-outs, and optimise the store to maximise the potential of the local environment.
Drive consistent execution
Processes throughout retail systems need to be dynamic. Retailers must be able to successfully introduce and drive new processes constantly and consistently. For example, customer self-service is proving to be an increasingly powerful tool in many stores. Also, many retailers use touch screen and kiosk technology to collect customer details, deliver tailored information to the customer, and promote special offers. Delivering the right content at the right time is clearly critical to the whole process, and management solutions are required to ensure that content is up-to-date and relevant.
Coinstar, the company that provides coin redemption kiosks in some 9,000 locations across the U.S., partners with local retailers to promote special offers within their stores. In addition to receiving money in a more convenient form than a jar full of pennies, the Coinstar transaction also dispenses incentive coupons for specified store items, driving traffic to targeted areas of the store.
Another example of innovation is the need to regularly enhance point of sale software and the data that supports it - in the form of price files, product availability and cross-selling information. Retailers who have the ability to continuously update their point of sale environment are able to react quickly to new market opportunities, and meet the competition head on. Movie Gallery, a large video retailer with close to 1,100 stores in the U.S., pushes new data such as pricing information, new movie/game releases, and promotions to each store, instantly giving them the most up-to-date information they need to conduct business and providing a common look-and-feel and customer experience at each of its locations.
The challenges of managing the frontline retail environment are far from trivial, but those retailers who master them and stay on the leading edge deliver consistently superior results. The challenges, the solutions and the technology may have changed beyond recognition over the past 15 years. But the key to success remains the same--providing and controlling a frontline environment that reflects the unique dynamics of doing business at the Point of Action--wherever customers are served and won.
biography
Joan Herbig is CEO of XcelleNet, a provider of frontline management solutions for the retail industry. More than 200 industry leading retailers including Blockbuster, Clarks Shoes, and Chif-fil-A count on XcelleNet solutions to drive success at the front lines of their business. For more information please visit www.xcellenet.com.
