Viewpoints

Which Tech Systems Are Most Critical in Recession?

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In the current economic crisis, food retailers have two advantages. The first is the obvious one that people always have to eat, and in a recession they will favor the lowest-cost source of food, which is the supermarket.

The other advantage, which was much less of a factor in past recessions than it is today, is the availability of technology that gives retailers a highly nuanced breakdown of their business, as well as a handle on how it can be improved.

The remarkably wide spectrum of applications designed to help food retailers and wholesalers is the subject of SN's 15th annual State of the Industry Report on Supermarket Technology (click on "Shelter in the Storm" to read the story). Based on a survey of SN's readers — conducted for the first time online — the report shows, among other things, which applications were given the highest priority by retailers in 2008, and which are ranked highest for 2009.

It is clear from the report that the applications considered most important these days are the ones that can help address the top-line and bottom-line survival of a retail business, such as business intelligence, category management, inventory management and profit analysis.

But the dilemma for retailers is that, while these systems may well be powerful aids for coping with a difficult economy, diminishing revenues and tighter capital expenditure budgets limit a company's ability to invest in technology. Retailers will be challenged to focus on the handful of applications — in addition to the most basic, POS — that are truly essential.

At a panel discussion earlier this month at the National Retail Federation's Annual Convention & Expo in New York, Doug Rutledge, chief information officer for Fresh & Easy Neighborhood Market, El Segundo, Calif., was asked to name the system that he would fight the hardest to retain (click on "Fresh & Easy Sticks to No-Card Policy" to read the story). He named two, one that “aligns stock with sales and space” and one that “aligns hours with work.”

The former system, developed by Fresh & Easy's U.K. parent, Tesco, is essentially a computer-based store ordering application that generates orders based on each store's POS data. The latter system is a labor scheduling application. So Rutledge is saying that control of store inventory and labor represents the most critical application of technology at Fresh & Easy — not a bad standard.

Rutledge mentioned that he is looking at one other application — task management, which I think is another wise choice in today's environment. In-store applications are not worth much if they are not fully executed by store employees; task management ensures that employees carry out their assignments.

Rutledge is not alone in his interest in task management. About one in five retail respondents to the SN survey said they are testing or launching this application in 2009. With President Obama invoking a new “era of responsibility” in his inaugural address last week, making sure that store tasks get done sounds like a good idea.

Contributors

Julie Gallagher

Julie Gallagher’s delicious foray into coverage of the food industry was purely accidental. With a background in technology, she joined Supermarket News as associate editor of its Technology...

Mark Hamstra

Mark Hamstra is the editor of the Retail/Financial section of Supermarket News covering mergers and acquisitions, quarterly earnings reports, executive changes and other significant events and trends...
What's Viewpoints?

In their Viewpoints columns, SN editors give their perspectives on current industry issues.

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