SAN ANTONIO -- The advent of instant communications will have a far-reaching impact on the supermarket business, said Robert Loeffler, president, e-commerce and customer marketing, H.E. Butt Grocery Co., here. "As we go from data processing to instantaneous information, the change is going to be the same order of magnitude that we saw going from no data processing to data processing," Loeffler said, speaking at the Food Marketing Institute's IT Leadership Forum, which also was held here last month.
In the 1960s, before data processing, companies might close the accounting books once a quarter, although once a year was more the norm, he said. Computerization brought greater timeliness, but instant communications will all but eliminate such strictures.
"Your suppliers, primarily through B2B [Internet business-to-business technologies], will have visibility through the chain all the way down to the shelf products. This is going to allow them and their people to accurately forecast demand, manufacturing schedules, optimize the supply chain and drive costs out of the business. And driving costs out of the business is good for you because you should be able to demand a lower cost," Loeffler said.
This instantaneous communication also will enable retailers to re-engineer their work processes, he said. "You are going to end up with a lot more knowledge workers and a lot less grunt workers. Eventually, it will destroy what we all know as the 'command-and-control' hierarchy. There will be no need for it. Everybody in your company will know what is going on all the time from top to bottom. So I think we are going to end up with many more process-oriented folks, more coaches in certain areas of excellence, than we are with typical bosses," Loeffler said.
The result of this will be retail operations that operate at such a level of efficiency, they will be more focused on the customer, rather than on the back-room tasks that need to be done just to get the products on the shelves. "It's always a constant battle in our business to get the manager out of the office and onto the sales floor. The excuses will go away," he said.
Wegmans Food Markets, Rochester, N.Y., is focused on using technology to improve service levels for the customers and thus build the business, said Don Reeve, director, information technology, and chief information officer. "Our investment in our technology enablement process has really helped, and we think building business from a customer perspective is going to be the end result," he said.
From the employee perspective, Wegmans has seen an improvement in productivity. "But it's not even so much the productivity that's important as it is the tools that we have provided them to make them happy with their jobs. The happier they are, the further they can engage with the opportunities that they can provide us as employer," Reeve said.
Meanwhile with vendors, there will be greater efficiencies, especially through the on-line business-to-business technologies, he said.
Instantaneous communication will have a direct and immediate benefit at the point-of-sale, said Bryan Richards, vice president, advertising and e-commerce, Meijer, Grand Rapids, Mich. "That kind of instantaneous information will help us treat our customers better," he said.
"We should know who that customer is when they come to checkout, for example, so we can wish them happy birthday, or tell them that their film processing is in." Another possible use is informing customers about recalled items that they have bought previously. "That instantaneous information about the customer coming through the lane needs to come right to the cashier, who is our last contact with our customer," he said.
"With information and the tools that you provide to people from an IT perspective, you need to make sure that they are improving productivity," said Maria Fidelibus, vice president, information technology and administration, Genuardi's Family Markets, Norristown, Pa. "Because while they can engage people, they can also make their jobs more frustrating if they are not integrated into the business processes."