While these retailers vary in their approaches to technology, what they have in common is the ability to "hit one out of the park." They lead the league in technology innovations in such key areas as leveraging frequent-shopper data and transportation management.
One of the common themes among these technology vanguards is that many of them have tapped into the Internet not only for on-line selling, but for communicating with their vendors and their stores as well.
Hannaford Links Voice, Data, Video
SCARBOROUGH, Maine -- Hannaford Bros. here is always hunting for technology that will have a significant effect on the business, and industry observers say the merger with Food Lion, Salisbury, Md., will present even more opportunities for information-technology excellence.
One of the retailer's latest projects is the installation of a robust communications network that will handle voice and video communications as well as data transmission, a move that is expected to significantly reduce the retailer's telephone costs and improve network reliability while laying the groundwork for a desktop video conferencing test this fall.
"The goal was to install a communications network that will handle all our communication needs -- data, voice and desktop video conferencing for all our 150 stores and headquarters," said John Bartlett, wide area network team leader. "We needed one network to serve the entire enterprise."
All the stores are already transmitting data over the new network, and all stores should be able to route phone calls to headquarters over the network in September, Bartlett said. Bartlett said the retailer has been using the system in its 50 Maine stores for a little more than a year. The system replaces satellite transmission for store-to-headquarters reports of point-of-sale tallies and inventory balances as well as intracompany voice communication.
Reliability played a large role in switching from a satellite network to the asynchronous transfer mode network, which is a dedicated-connection switching technology that organizes digital data into packets and transmits information using digital signal technology.
One of the next applications that the retailer will test over the network is desktop video conferencing. "Our chief executive officer is actually very enthused about this. Our CEO and a senior vice president are located about 600 or 700 miles from one another. They want to be part of the pilot of desktop video conferencing that we will do sometime in the fall," Bartlett told SN.
While the speed of the network makes things like desktop video conferencing possible, Hannaford also expects to leverage the faster response times for accessing of data over the new network, a joint effort of Cisco Systems, San Jose, Calif., and Bell Atlantic Network Integration, Frazer, Pa.
"We save at least a half a second in each direction because we have to flow the data up to the satellite and back down. Now we've got a 286,000-bits-per-second pipe."
Baker's Stresses Frequent Shoppers
OMAHA, Neb. -- Leveraging frequent-shopper data is at the the top of the agenda for many supermarket executives.
Baker's Supermarkets here is upgrading its decision-support system by incorporating frequent-shopper data to ensure that the buying habits of its top customers are taken into account when making decisions about pricing and the types of items to carry. The retailer is working to add this and other features, such as support for advertising planning and price markdowns, to the system by the end of the year.
"This will help us make even more informed decisions about pricing and the items we carry," said Mike Petersen, president and chief operating officer. "For example, we might do a stockkeeping unit rationalization on a product and discover that it is not a real money maker. However, armed with the knowledge that this is a product that is popular with our best customers, we would take that into consideration when making a decision as to whether we will continue to carry a particular item," he said.
The upgrades to the system will further enhance the retailer's decision-making capabilities. "We've got all this data, and to sift through it all is like trying to take a sip of water out of a fire hose. This is a very effective tool. We've got to be able to glean what is the most important to our frequent shopper. We've got to recognize and solidify our relationship with our best customers and have that data factored into the mix when making merchandising and pricing decisions," Petersen said.
Aside from the tie-in to frequent-shopper data, the retailer also plans to add a feature for tracking promotions. The system will provide users with information on the pricing history of a particular product so they can analyze the effect of past price reductions and plan the appropriate amount of inventory for promoted items.
The centralized pricing system was originally developed internally at Baker's. Members of that development staff have since formed a company, Sirius Retail, also in Omaha, to sell the software to other retailers.
Petersen said the system has improved the retailer's business practices and he expects the upcoming enhancements to prove even more beneficial.
Furr's Launches On-Line Shopping
ALBUQUERQUE, N.M. -- Not content to let the Peapods and Homgrocers rule the on-line grocery arena, Furr's launched its own site this spring.
The on-line shopping system is integrated with Furr's frequent-shopper database and point-of-sale system. Orders are transmitted to the store, where employees view the orders on hand-held radio frequency-based devices and pick items from store shelves. Once the customer's items are picked, the transaction is sent to the retailer's point-of-sale system to process the payment.
Customers can pick up their orders at one of six stores or delivery is available for customers in more than 20 ZIP codes.
Customers can choose a 90-minute window in which their delivery will be ready for pick-up, either the same day the order was placed or the following day. Users picking up their orders at the store can choose the time and store where they will pick up their order.
When the order is ready, customers receive an e-mail.
About 15,000 perishable and non-perishable items are available from the on-line grocery service.
Users can include notes about substitutions with their orders, which the order pickers can view on hand-held devices as they retrieve the items from the store shelves. Users can also note special requests in the system, letting the order picker know they want bananas that aren't too ripe.
Unlike some supermarkets that have developed Internet-based shopping services using in-house technology staff, Furr's is using a third-party provider, I-Way Corp., Newport Beach, Calif. VeriFone, Santa Clara, Calif., is providing the payment-processing system for the site.
Fleming Targets Inbound Shipments
OKLAHOMA CITY -- Fleming Cos., a wholesaler serving more than 3,000 retailers, has emerged as a logistics leader. One of the wholesaler's most recent projects involves new technology to organize inbound shipments from more than 5,000 suppliers to 36 distribution centers with the installation of new technology.
The wholesaler should be able to improve product flow to distribution centers, optimize routing and increase customer response through Web-enabled collaboration with carriers, according to a source familiar with the situation.
"We'll control the inbound using our size and system support to negotiate cost-effective rates, reducing the overall cost of the supply-chain system," said John Boultier, director of transportation and traffic for Fleming.
The wholesaler will use several retail solutions to optimize inbound shipments, including a suite of products from Manugistics, Rockville, Md.
"[One module] is a tool to analyze our business. It's project-driven. We put in a bunch of data and run it through the system. It gives us the output as to what we need to do to improve the systems," Boultier told SN, adding that it would certainly see use on the assimilation of new business.
"The transportation-management part of the system is pretty powerful," Boultier said. "It will assist us in gaining more control of our inbound [shipments], working with our core carriers.
"The biggest benefit is in the control of the transportation piece of the inbound," he added. "Often there's no consideration to the transportation cost, we order it and it gets shipped," Boultier told SN.
The new system was selected as the best solution for inbound and outbound freight with multipoint to multipoint distribution capabilities, according to a source familiar with the situation.
The solution is projected to increase the capacity of Fleming's fleet and distribution centers, and should be up and running by the first quarter of 2000, according to the wholesaler.
Wegmans Looks To Internet-CPFR
ROCHESTER, N.Y. -- Wegmans Food Markets here has been in the forefront of work on collaborative planning, forecasting and replenishment. When applied to a limited number of categories, CPFR has paid off for Wegmans here and its Parsippany, N.J.-based trading partner Nabisco. The piloted Planters nut category saw sales in the category rise 12.2%, with dollar sales up 17.4% during the six-month-plus pilot.
Wegmans said it continues to address the Planters nut category through CPFR, even though the pilot was completed earlier this year.
Integration and the Internet will help to take CPFR to the next level, according to Mike DeCory, CPFR project manager for Wegmans.
"CPFR as a stand-alone [process] is tough. Collaborative planning, forecasting and replenishment software needs to be integrated into the business process and that's where we aspire to be," said DeCory.
The Internet could allow for a common server that would contain the merchandising plan for the category as well as up-to-date category information that would be available to both parties.
The Internet could eventually help eliminate many of the manual processes that take place in many CPFR projects and make the business practice usable across multiple categories.
"The industry has found this fantastic way to communicate," said a hopeful DeCory. "But until the CPFR process is proven scalable, even for some CPFR pioneers, it appears that further CPFR projects are a matter of wait and see."
Certified Improves Miles, Efficiency
LOS ANGELES -- Certified Grocers of California here has been using routing software to improve efficiencies in its transportation system and reduce mileage. The wholesaler is now looking ahead to adding onboard computers and possibly satellite tracking.
The wholesaler recently tested about 100 tractors with onboard computers. The onboard computers allow the wholesaler's dispatcher to communicate with its drivers electronically.
Although the retailer said that satellite tracking is on the radar screen, a time-line for implementation has not been planned.
"We're in the middle of deciding about our satellite system; we're evaluating a number of different offerings," said Cor Karaffa, vice president of distribution for Certified Grocers of California.
But while the future of the new technologies is not yet decided, there is one system that continues to deliver transportation dollar savings to the wholesaler.
For the last four years, Certified has used an off-the-shelf routing system and has been able to reduce the miles traveled by its drivers. The wholesaler performed a rollout of the routing system across the company in 1997.
"It was an off-the-shelf system we've been using since 1995 and we rolled it out to our other facilities. Prior to the new routing system we had a manual system. It has reduced our mileage," he said.
