The focus is on the front end.
While retailers and wholesalers are diligently tending to the needs of other areas, such as warehouse operations and corporate computing, point-of-sale systems will top the priority lists of many companies this year.
Retailers are demanding more of the front end and investing in personal computers to get it.
"Right now we have traditional, dedicated registers. With that kind of locked-in technology, we cannot go forward using the registers as a marketing tool," said one retailer, echoing the sentiments of many others.
PC-based POS systems can deliver new levels of flexibility for data retrieval and provide the platform for electronic frequent shopper programs.
"The open-systems point-of-sale is very well suited to that; it's ready to go," said Robert Hartless, vice president of management information systems at 43-store Byrd Food Stores, Burlington, N.C.
Automating manual tasks -- from the distribution center to the store back door -- is another area of emphasis for distributors seeking to streamline operations and reduce the great volumes of paper.
At Valu Food, Baltimore, an automated receiving program is in the works and eventually the chain hopes to retrieve files from stores electronically.
"That's our long-term goal for next year," said Joe Mazziott, director of management information systems. "Right now everything's handled manually. It's a paper nightmare."
SN interviewed retailers and wholesalers to see what technology projects would emerge as most critical in the year ahead. Here's what they said:
Al Van Luvender VP, MIS Riser Foods Bedford Heights, Ohio
We're going to be doing [electronic] coupon validation or coupon scanning. If we're going to validate coupons, we have to set up a process to update active coupons and codes. It will require some back-end programming to support that environment.
I think the [throughput] time at the front end will be reduced with the program. Cashiers will be able to scan the coupon and immediately know whether it's valid or not. Another benefit will be being able to capture information electronically and send it to the clearing house vs. having to deal with paper coupons.
We're also going to expand our labor-scheduling program to other store departments like grocery and perishables.
We're looking at implementing back-door direct-store-delivery receiving.
Robert Hartless VP, MIS Byrd Food Stores Burlington, N.C.
We'll be installing a warehouse management software system that will include receiving, put-away, retrieval and purchasing. We've been using some basic homegrown stuff for ordering goods, picking them and getting them out the door. We think the new system will provide a good return on investment and help improve the turn ratio in the warehouse. We will be starting the conversion in early January.
At the store level, we're going to be putting in open-system PC-based cash registers at the POS. We haven't chosen the system yet -- I'm right in the middle of that now. But we hope to have it chosen by January.
We decided to go to open systems to be more flexible in what we offer customers and in our reporting capabilities. We want an integrated system to handle debit, credit and check authorization and, in the future, a preferred customer data base. I also think we will do a frequent shopper pilot in 1996.
Rex Eutsler director, MIS, EDP Sun Management Services Defiance, Ohio
One of the things we're looking at is computer-assisted ordering and using our POS data to help plan orders. We're also looking at a wholesaler interface. That's going to be part of the software upgrade beginning next year. It would be direct communication that can electronically take a file from our wholesaler and import it directly into our system.
Right now we have a stand-alone system for accepting credit and debit cards. I'd like to incorporate it into the registers and have it all together in one transaction.
We're also looking at a frequent shopper program that could soon be operational at the store level. But it will probably be a year before we start reaping the benefits from collecting the frequent shopper data. We're still upgrading our corporate systems, which should allow quicker communication with stores.
Joe Mazziott director, MIS, EDP Valu Food Baltimore
We're looking to install an automated receiving system in our stores. Once we get a whole DSD receiving package, we'll have everything received at the back door scanned and electronically tied into our accounting department.
From there I'm planning to dial into the stores to [electronically] pick up the files. That's our long-term goal for next year. Right now everything's handled manually. It's a paper nightmare.
Joe Wood marketing manager Roundy's Pewaukee, Wis.
Our frequent shopper program is going to be a priority for us in 1996. I'm working on a kids club card, where we'll set aside a batch of Universal Product Code numbers for kids so they can use the kiosk. We'll be targeting them, maybe not with product discounts but with free cookies, for example. We will also get to know their birthdays, and things like that.
We're also coming out with a new frequent shopper card. We're introducing a card with a magnetic stripe and preprinted bar code that will offer calling card functionality.
Robert Agee VP, EDP C.B. Ragland Co. Nashville, Tenn.
We're going to be looking pretty hard at upgrading our mainframe, which is a couple of generations old. Because our operations have been geared around the mainframe, I'm not sure we will go with client-server [computing architecture]. Client-server is good once you get there, but when you've got as many applications as we've got operating now on the mainframe, it would be like changing the whole world.
We're using electronic data interchange in a limited way. We've got a few vendors up and running, using it for purchase orders. But there's no choice: we have to get more into EDI. Some of the larger vendors are going to force us to get into it whether we want to or not.
William Rohal MIS manager G.A. Love Foods Burlington, Ontario
One thing we're going to concentrate on is our POS systems, both for new stores and our existing registers. We want to get into PC-based register systems. Right now we have traditional dedicated registers. With that kind of locked-in technology we basically can't go forward using the registers as a marketing tool. We need something with more flexibility.
Louis Nasti MIS director Victory Supermarkets Leominster, Mass.
We're converting a lot of our computer networks to Windows. It's a sizable job for us because a lot of the applications weren't there in the past. We've done the harder things first; now we're coming to the back door. We're finally getting around to installing automated time and attendance. We left that for one of the last things to do. A labor-scheduling package would be the next logical step after it.
VP, MIS regional chain
We're installing a new program for category management. Currently, our category managers can look at overall categories in a legacy system but can't look at specific item movement. They will have that capability in the new year as well as some new pricing tools.
Another area we're working on is an electronic marketing, customer loyalty program. As part of that, we may do a pilot with customer home shopping using the Internet. We'll be testing a cashier performance program. We have a basic system now but it doesn't pinpoint [exceptions] very well. We have cameras monitoring the front end, but we want to be more precise about where to focus them.
Major Eastern wholesaler
With the completion of our new distribution center, one of the key areas we now have to focus on is warehouse automation and systems.
One thing I would like to do is explore an executive information system and financial analysis program. EIS would give us a barometer as to how things are going, how the employees are doing, the average cost per employee. As a long-term strategy, I see us getting involved in that area.