Upgrading point-of-sale systems to launch frequent shopper programs and expand electronic payment options are at the top of the information systems priority list for many retailers in the year ahead.
"We are beefing up our front end. We are working on a sophisticated frequent shopper program that will tie into our electronic payments network switch," said Jerry Johnson, vice president of management information systems and chief information officer at Abco Foods, Phoenix.
"We have two major priorities. One is finding our next generation POS systems. We feel, for a host of reasons, that having a personal computer-based system is the way to go," said Claire D'Amour, vice president of corporate affairs at Big Y Foods, Springfield, Mass.
Similarly, implementing an electronic benefits transfer program tied into the front end was cited as a top priority at Megafoods Stores, Mesa, Ariz. "Right now we are working with electronic benefits transfer in our Texas stores. We want to have that done by the first of August," said Bob Stratton, director of MIS.
Other areas retailers ranked as the most important MIS projects in coming months included expanding DSD programs, cutting costs out of the distribution network and exploring the possibility of installing electronic shelf labels.
One thing is clear: Retailers are gearing up for more dramatic change in the area of MIS as they strive to remain competitive and thrive in the food industry of the future.
SN asked a range of supermarket retailers what top MIS priorities were for the coming year. Here is what they had to say:
Jerry Johnson
VP of MIS, CIO
Abco Foods
Phoenix
We are beefing up our front end. We are working on a sophisticated frequent shopper program that will tie into our electronic payments network switch.
The system will allow shoppers to receive their award points and at the same time will funnel market basket information back to us during the day so we can do demographic marketing.
Instead of bringing back the transaction logs during the night, we are going to be trickling them down during the day. By the time the store closes, we will have information ready to go.
The system will give us instant sales [reports] by department. For example, if our merchandising people want to know how much round steak was sold in store 14, they will be able to look at the data up until the last three minutes before the store closes. We expect to roll out that system by the end of the year.
Bob Stratton
director of MIS
Megafoods Stores
Mesa, Ariz.
Right now we are working with electronic benefits transfer in our Texas stores. We are trying to get an EBT system on line. We want to have that done by the first of August.
We will be installing our own payment terminals that run through our processor, which we think we help us save having extra equipment on the front end. I believe most other chains are letting the [state contractor] bring in their own equipment, but we are going to customize the software so it works for EBT on our own equipment.
[Magnetic ink character recognition] units also will be attached to the terminals to capture information that will then go directly into our centralized data base.
Claire D'Amour
VP of corporate affairs
Big Y Foods
Springfield, Mass.
We have two major priorities. One is finding our next generation POS system. That is a challenge. We currently have [POS systems] that are not as versatile as most current PC-based front-end systems. We feel, for a whole host of reasons, that having a PC-based system is the way to go.
We are also continuing to develop our wide-area network. Parts of it are already in place. We recently upgraded the PCs in our supermarket offices and in our satellite-connected distribution centers and facilities. But we are going to expand the WAN even further, so there will be much less paper going between various parts of the company.
Jeff Reasor
senior VP
Reasor's Foods
Tahlequah, Okla.
Before launching anything new, we are going to wait to see what happens with the re-engineering initiative at our wholesaler, Fleming. After that, we will start exploring other areas to improve our business. We would like to work on eliminating cost from our distribution system. For instance, we want to be doing more electronic data interchange with large vendors, like Pepsi and Coca-Cola. We are one of their largest customers in the Tulsa area.
We also want to be getting back information from our stores more quickly so we can begin to launch new programs, such as category management. Right now we communicate with the stores on a nightly basis.
Brad Wahl
director of computer operations
Leevers Supermarkets
Devils Lake, N.D.
One thing we are looking at now is integrating our direct-store-delivery system with our front-end systems. We have a DSD system in all our stores, but it is not integrated. We have separate PCs running the front end.
We hope that by integrating [the systems] we can cut in half the time it takes to input all the necessary DSD data. That is where the savings are going to come from. Right now we are punching data in twice, because it is not all on a single system. We are looking at full DSD integration with our front-end systems in at least half of our stores in 1996.
We are also looking at a laser sign system that will be integrated into our mainframe. The system would create signs out of our data base as we create the [sales] batches. By doing that, we will not have to retype the product name or price -- it will already be stored in our information file.
Right now our signs are printed on a kind of typewriter and come out on thermal paper. It is a great sign system that gives us a great appearance, but the cost is a little higher than we want.
We are also interested in exploring electronic tags. We have not made any commitment yet, but we feel they are the wave of the future. Because we have only 12 stores and it takes a lot of money to fund testing [of new technologies], we are hoping that our wholesaler, Supervalu, will take the lead in offering these types of systems.
Director of retail services
100-store chain
We are rolling out a centralized check authorization program and we are developing an electronic check system. The electronic check program is a big thing for us. We hope to have a pilot test under way soon.
The centralized check authorization system allows our customers to use one card in all our stores. It should also help us reduce costs from bad checks.
One area that intrigues me is smart-card technology. I think merchants eventually are going to be challenged to address the issue of smart cards, whether it be in the frequent shopper arena or in the electronic payments area.
I think the technology is going to develop more quickly than most people imagine. For example, there is no effective way for us to accept a WIC [Women, Infants and Children] payment today. Smart-card technology could have applications there. WIC is an important part of our business and we are going to have to deal with that issue.
