Independent food retailers ordinarily don't have the resources for large investments in sophisticated IT. Fortunately, a growing number of technology providers have decided to target the independent retailer with applications tailored to the needs and budget of the smaller operator.
Still, it's up to the retailer to take advantage of these offerings, as well as the technology support offered by its wholesaler. Mollie Stone's Markets, Mill Valley, Calif., an eight-store retailer offering a wide variety of specialty foods, is an example of a small food retailer determined to make the most of the technology being provided for the independent sector.
The person making Mollie Stone's technology decisions is Deirdre Gomes, its IT director for the past 11 years, who oversees a four-person department. “We're always looking to have cutting-edge technology,” she said. “As we grow and increase sales, I find I need to build it up so we have the right technology in place.”
Gomes has been busy the past few years, rolling out a new POS and back-office system, introducing a gift card program, upgrading the company's operating system to Windows XP, uploading POS data to a third-party data center, installing a biometric time-and-attendance system, switching to a high-speed network and implementing price optimization technology.
For aggressively leveraging this wide range of technology applications to support its business, Mollie Stone's Markets has been selected to receive SN's 2007 Technology Excellence Award in the Independent Retailer category.
For any retailer, the POS system is the most vital piece of technology in the store. Gomes decided a few years ago that Mollie Stone's needed a more robust POS platform and opted for the ISS45 POS system, from StoreNext Retail Technologies, Plano, Texas. StoreNext, a joint venture of Retalix USA and Fujitsu Transactions Systems, was created specifically to serve the independent retailer market.
The ISS45 offers Mollie Stone's a number of advantages, including a touchscreen for cashiers and a flat-screen monitor for consumers. It also supports the Mollie Card reloadable gift-card program, which has become an important part of the company's marketing program.
“Deirdre did a fantastic job integrating the Mollie Card into our operations,” said David Bennett, co-owner of Mollie Stone's. “It's part of our culture now. We sell hundreds per week.” The stores are now working on getting consumers to understand that the cards are reloadable, he noted. The system also taps into the Blackhawk Network, a provider of prepaid gift cards from other retailers.
The ISS45 system ties into Ready Pay, the credit card processing network provided by Unified Western Grocers, Commerce, Calif., Mollie Stone's wholesaler; it uses a dial-up backup in the event the credit card processing network goes down. “Consumers never even know when it's down,” said Gomes. The system also runs checks through the Shared Check Authorization Network (SCAN), a national database of bad check writers.
Mollie Stone's is taking advantage of StoreNext's Connected Services, which gives independents online access to data center applications they might otherwise not be able to afford. “Every night all of our [transaction logs] go to a server farm in Texas,” Gomes explained. In return, the retailer's merchandising executives are able to access a wealth of sales information for any period of time.
“We can ask the produce guy, ‘How come the Roman tomatoes were such a hit in Burlingame this week?’” she noted. “And he could say, ‘I had a big display up front.’ So they can start making merchandising decisions in terms of what's really working, right at their fingertips. It's been hugely beneficial.”
Studying sales data in this way is “actually quite addicting,” Gomes said. “You can sit for hours looking at it.”
Mollie Stone's store managers also look at real-time movement data via the RBO back-office system from StoreNext, installed with the ISS45 POS system. Having access to real-time data and making decisions based on what's happening in the stores are “what it's all about,” said Gomes.
Through Unified Western Grocers, Mollie Stone's has just switched from a frame-relay data communications system to a broadband network managed by MegaPath, Costa Mesa, Calif. The network will handle all of the retailer's communications from stores to headquarters, as well as with a produce warehouse it maintains at the San Francisco Produce Market. In addition, the network will enable stores to process credit, gift and check transactions from their locations rather than through headquarters.
An important advantage of MegaPath is that it will enable Mollie Stone's to become compliant with the PCI (Payment Card Industry) Data Security Standards, established in 2005 by the credit card associations. “MegaPath is already certified, so I just have to order my scan and everything will pass,” said Gomes. “That's a big reason why we cut over to MegaPath.”
Mollie Stone's is in the process of implementing price optimization from Revionics, Sacramento, Calif., another company focused on the independent food retailing sector. The retailer is sending FTP files of sales data to Revionics, which analyzes demand and recommends prices. “We hope to control our gross margins based on their algorithm for price recommendations,” said Gomes. “We'll use it for competitive pricing and setting the private label gap versus national brands.”
At the store level, Gomes has also recently installed a biometric time-and-attendance system from Stromberg LLC, Lake Mary, Fla., that requires employees to clock in using their fingertip as identification. It is integrated with payroll and human resources applications from Stromberg.
Gomes acknowledged that she works closely with Unified Western Grocers in making technology decisions, and particularly with Mike Brown, Unified's general manager, retail technology. “Anytime we buy new technology, we bounce it off him and get his buy-in,” she said. “We want the right fit between us and our vendors.”
She also gets considerable support from a local technology integrator, RMS, Fresno, Calif., which installed the POS and back-office systems from StoreNext. RMS has loaned Gomes an “RBO lab,” with which she is able to test store-based projects before going live with them. “We can check UPCs and set up promotions like buy one, get one,” she said. “We don't have to mess around at a live site. I can't live without it.”