Improving store communications is getting top billing in 1997, according to information systems executives.
A wide range of communications technologies from in-store paging to e-mail and multiple direct lines linking stores to headquarters are being planned to open up retailer communication lines.
Upgrades at the point of sale, especially to accommodate more sophisticated data gathering for frequent-shopper programs, will emerge as particularly important this year.
For some retailers, such as Sobey's, Stellarton, Nova Scotia, and Glen's Markets, Gaylord, Mich., accounting and financial software also will get a facelift.
SN recently interviewed retailers and wholesalers to find out what their most important changes and information systems priorities will be in the year ahead. Here's a sampling of what they had to say.
chief information officer
One of our major initiatives involves upgrading our corporate-to-retail network in two areas. One is improving the visibility and control of all the applications on the network and another is increasing the bandwidth capacity.
Right now we're using a satellite uplink for our wide area network services, but we're now looking at other technologies to provide increased bandwidth and greater reliability.
We're also doing a lot of work with an intranet to provide a common gateway for distributing information to all associates. For example, I gave a presentation to my department about our information technology initiatives for 1997. As it turned out, there was demand from other staff in the company to know about our technology initiatives. Transmitting the information to them via our intranet proved very easy.
We're going to expand use of the intranet, both at corporate and retail, to include projects such as training packets, marketing strategies and merchandise strategies.
chief information officer
Whole Foods Market
For the new year we are planning centrally hosted, new scanning systems to do centralized purchasing. Our point-of-sale systems will remain the same, but the new scanning system will encompass the back-end host system.
We have a very heterogeneous environment right now. Our existing scanning systems at the store and regional levels are different systems and are not compatible. The data integrity is not as strong as it could be and our movement data and cost-item data are not fully reliable.
The first phase to support the scanning system is keeping track of item movement, item cost and price margins, and passing this information to our registers. We are in the project design phase and are about to begin training and documenting the business processes it will alter.
We also plan to install a program to do payroll in-house. This process was previously outsourced, and more expensive than it needs to be. Information is also less available for perusal than it should be. By bringing it in-house, the new system will help us track these things.
We hope to be using the process by the end of 1997. It will keep track of payroll checks and related information, like who was paid, how much was paid and benefits information. It will process an immense amount of information. We have already gone through our business process analysis.
We are in the process of surveying and choosing the tool set to implement new data warehousing systems. The system will consolidate and reformat all data in the company that will be used to do an analysis of our business. It will allow users to easily get information needed to make decisions.
H.E. Butt Grocery Co.
We are expanding our continuous replenishment program. Throughout 1997, we will pursue vendors who are not currently participating in this program. We are in the process of identifying vendors, then we will ramp vendors on board to the project. It will be a continuing process in the new year.
We are also expanding electronic invoicing use for direct-store-delivery products. It makes the receiving process more efficient.
We are using the information in advance-ship notices to get a more accurate picture of a balance on orders and more of an understanding of what is being shipped.
Other ASN advantages are in the areas of receiving. We are using it in some warehouses, and we are looking to use it for our internal system as an update of purchase order information.
The goals we would like to reach in 1997 include increased service levels to our stores, and a reduction in inventory throughout the chain.
Stellarton, Nova Scotia
We will be installing new personal computer-based point-of-sale systems in all stores. We are currently running a frequent-shopper program and the POS system we currently use is not enhancing the program for us. This new system will integrate the frequent-shopper transactions at the point of sale.
It will also act as a perpetual inventory system, as it can keep track of inventory on the computer as products are sold or received.
Our POS system should be in all 105 stores by the end of 1997. So far, we have about 35% of our stores done.
We will be expanding our database management project. Currently, we use database management to identify our best customers and lost customers in connection with our frequent-shopper program. In addition to this, we will use the system to learn about and use our customer purchase information. This information will let us better understand our consumers' purchase behavior.
We really just started looking at how this project will be developing throughout the year, but it will not be complete by the end of 1997. This is something that we will be continually developing and doing different things with, based on information.
We've got a lot to do -- 1997 is kind of a watershed year for Glen's Markets in the technology area. We're pretty much replacing everything we have, all software applications. A lot of what we have is outdated and needs to be replaced or upgraded.
We're not just putting in new financials, price management and analysis applications. We're also making decisions on payroll and human resources and we purchased some software from a company in Holland for polling of our stores for sales and movement data.
Right now we are doing application analysis and defining our environment. We have some of the software installed but we're not using it yet.
We have made sure with the software applications that we chose that the Year 2000 issue will not come up. We've done that from our operations systems straight through to our software applications so we don't have any issues with Year 2000.
Byrd Food Stores
I'm interested in time-and-attendance software. It's something we haven't done and I'm pushing for that. Scale management is another important area.
We are testing in-store paging and have done a couple of surveys with store personnel. Initially, the store personnel didn't like carrying a belt pack and wearing the piece that clips onto your ear, but after two days that was gone -- the benefits far outweighed those discomforts. They really liked being able to page someone from wherever they are standing without having to go over the overhead [public address] system.
We still have another survey to do and we'll put numbers to it to quantify the results to determine how quickly the system will pay for itself.
Once that's done, we would probably go into any remodels or new stores with the technology.
assistant VP, MIS
Hy-Vee Food Stores
West Des Moines,
Our No. 1 priority next year is expanding and refining our in-house-developed computer-assisted ordering program for the stores. This offers tremendous long-term benefits, including reduced inventories, reduced lead times and fewer out-of-stocks as well as improved communication with our vendors.
However, it's a challenging project because we're introducing perpetual inventory to the retail store.
Our second priority is communications with our stores, meaning how do we link our stores together and what technology will we use -- such as frame relay, the Internet and satellite communications. Right now we're considering all the options and we will study those further in 1997.
Our third priority is direct marketing and what technologies we can use in this area to communicate with our customers. We're in a couple of direct-marketing programs at this point. We will be getting into a card-based marketing program in 1997. Currently, we are experimenting with another preferred-customer program using personalized coupons. The customer is issued coupons based on prior purchases and the frequency of those purchases.
Our fourth priority is preparing our programs for the year 2000. At this point we've identified all the areas that need changing, and in 1997 we will prioritize and determine which ones can be done in-house and which ones require outside assistance.
services, and chief
Certified Grocers of
What is changing for Certified Grocers is the realization that we need to be retail-focused as well as a good wholesale distributor. That's important as a co-op because we really have both to do.
The big issue is how to deploy effective technology in a mature industry. For example, we have begun interactive ordering, which allows us to use radio-frequency technology in the store, connecting the wholesale distributor and grocer more effectively.
Our customers are very excited about it and are embracing this technology. They're seeing it make a difference in their stores. The implementation of this technology will continue into 1997.
Taking that a step further is our inventory management, which will enable us to improve service levels and our in-stock capability for our grocers by connecting the technology at the store level in a more timely manner. We are achieving this through the integration of our purchasing systems and continuous replenishment program and Efficient Consumer Response initiatives as an ongoing process through 1997.
Minyard Food Stores
Our top priority is to get communications between the corporate office and the stores. Currently we are on dial lines using modems to get in touch with the store.
But we'll be getting into Integrated Services Digital Network and frame relay, which will connect us directly to the store for communication purposes. We've been working on this for quite a while and we hope to have it in place in 1997.
Today we have three or four phone lines to each store. By making this change, we'll reduce the lines to one. We'll have everyone on-line as a direct connection to the corporate office. Essentially, we are putting out a wide area network. We will also have them on e-mail and we're looking at other applications where the store manager can look up prices direct from our mainframe at the store level.