While most independents would like to be able to operate with the efficiencies and technological prowess of a chain, nine-store Pro's Ranch Markets is an independent that almost has to operate that way.
That's because the retailer, founded in Ontario, Calif., in 1982 by family patriarch Mike Provenzano, decided in 2002 to open festive Hispanic-themed stores replete with hot tortillas and fresh breads in Arizona and later in Texas and New Mexico while maintaining his headquarters in Southern California. Today, Pro's has seven stores in Phoenix, one in Albuquerque, N.M., and one in El Paso, Texas; a second El Paso store and a store in La Cruces, N.M., are scheduled to open by the end of the year.
To operate efficiently, this widely dispersed operation uses a chain-like approach with a considerable focus on centralized technology.
“From an IT perspective, we're like a 30-store chain,” said Jeff Provenzano, vice president of technology and advertising, and at 36 the youngest of four brothers who co-own and run the company with their father. “That helps us compete and manage logistics in three states.”
Pro's also runs two laundromats in Phoenix and a gas station next to the El Paso store, along with a warehouse in Ontario and in Phoenix, which supply about 30% of its items (the rest coming from wholesaler Unified Grocers). Last year, the company sold its four smallest stores in Southern California to concentrate on expansion in the Southwest.
To bolster that expansion, Pro's has adopted a slew of centralized systems for pricing, category analysis, sales tracking and POS fraud prevention. These applications have been made readily available to users through a collaborative Web portal. In addition, a GPS truck monitoring system promotes on-time deliveries to Pro's stores across the Southwest.
Pro's has also invested in cost-cutting server virtualization technology at its headquarters as well as biometric systems for time and attendance and check cashing. And the retailer has enlivened its website with YouTube videos of store commercials and events.
For leveraging these technologies in support of its fast-growing and diffuse store base, Pro's Ranch Markets was chosen as the winner of SN's 2011 Technology Excellence Awards in the independent category.
Apart from Unified Grocers' Interactive Ordering System (IOS) for store ordering, Pro's mostly purchases technology from third-party vendors to buttress its centralized operation. For example, the retailer uses a headquarters pricing system, from Retalix, Plano, Texas, that allows it to disseminate pricing changes to its nine stores. Another Retalix system, Category Analyzer, pulls sales movement from the stores, and enables buyers to “drill into 20,000 SKUs” to assess such metrics as gross margin and “make better merchandising decisions,” said Provenzano. Pro's also uses Retalix's wireless back-door scanning/receiving system that sends confirmations of store deliveries to headquarters.
To get a handle on top-line hourly sales changes across its stores, Pro's employs a real-time sales dashboard from StoreNext Retail Technologies, Plano, Texas, a division of Retalix. That system, as well as the Trax POS loss prevention system, is leveraged via the “cloud” from StoreNext so Pro's doesn't have to support it. “We believe in cloud computing for certain applications, and these are ideal for us,” said Provenzano. “It minimizes the IT infrastructure we need to put in place.”
With 25 to 30 checkout registers in its stores, including 15 at the front end and 10 to 15 along the perimeter in hot food and bakery departments, Pro's uses the dashboard to analyze sales at particular registers. The Trax system spots unusual patterns for refunds and voids at the registers that suggest possible cashier fraud. Pro's POS system, the ISS45, is also from StoreNext.
Another key technological advance for Pro's — one that has helped consolidate its IT infrastructure — has been the implementation of a Microsoft SharePoint Web portal in combination with the Microsoft Exchange email server. The portal is a “one-stop shop where you can access the majority of our applications,” such as Retalix and StoreNext, said Provenzano. “We put it next to email, so you can start your day there and end your day there.” SharePoint is also a collaborative platform where Pro's executives and managers can share documents and conduct live meetings, training and demonstrations.
“With the growth of our company, IT has become centralized and SharePoint is the backbone bringing it all together,” he said.
Pro's expansion across three Southwestern states also called for a logistics system to track deliveries. For that the company implemented a fleet management system from Telogis, Aliso Viejo, Calif., that uses GPS to monitor the movements of its 45 to 50 trailers. “We've improved delivery times and can let the stores know when deliveries are arriving,” said Provenzano.
In addition to centralization, cost-cutting has been another IT imperative at Pro's. To that end, the company has collaborated over the past several months with Enigmatizing Networks, Rancho Cucamonga, Calif., to virtualize about half of the 20 servers used at its Ontario headquarters, using software from VMware, Palo Alto, Calif. As a result, seven or eight older machines have been retired.
Pro's plans to virtualize another 25% of its corporate servers over the next year, after which it may virtualize store servers, said Provenzano. “One day we'll be in a completely virtual environment.”
In the past, he said, “I had all of these retail applications and I would buy Dell servers for each one. Today I take one server and using VMware run five virtual servers on it, each with its own application. The cost savings are immediate from a hardware standpoint.”
By reducing hardware usage, virtualization results in power savings, Provenzano said. It also provides better disaster recovery capabilities; in addition to data, virtualization enables Pro's to back up operating systems and applications. “If we had a failure, it used to take a day to recover,” he said. “Now we recover in one or two hours.”
At the store level, Pro's has employed biometric technology in a few areas. For example, the company has installed biometric time clocks, from ADP, Roseland, N.J., that require employees to use fingerprint identification to punch in, which eliminates “buddy punching.” (The time clocks are also used in its warehouses and headquarters.)
For check cashing, Pro's runs a biometric system called Paycheck Secure from Herndon, Va.-based AllTrust Networks that uses a finger scan to authenticate customers' identities.
Pro's is also enhancing its website, www.prosranch.com, recently launching a YouTube section featuring its TV commercials and videos of promotional and community events. The site offers other social media such as Facebook, Twitter and Flickr, as well as a blog. Pro's also uses email marketing to accommodate shoppers living beyond the seven-mile radius covered by its print ads.
“We're a destination supermarket — people come from 12 to 15 miles away,” said Provenzano, who, like Stew Leonard's on the East Coast, refers to his stores as the “Disneyland of food shopping.”
Stores: 9
Sales: Close to $300 million (industry estimate)
Primary Supplier: Unified Grocers
Key Tech Initiatives: Retalix Pricing and Category Analyzer, StoreNext Sales Dashboard, Microsoft SharePoint, Telogis Fleet Management, Server Virtualization