AUSTRALIA RETAILER TOUTS GLOBAL BUYING SYSTEM

JAMES FALLON

BARCELONA, Spain (FNS) -- A new global electronic system for buying and selling food products is building a base of subscribers that could comprise 25,000 manufacturers in 50 countries by the end of next year, according to Woolworths, Australia's largest food retailer involved in the project.

David Wills, Woolworths' general manager of management information systems, discussed progress of the GEMMNet system here at the third annual retail forum sponsored by International Computer Ltd., London, late last month. The conference, which attracted more than 200 executives from 20 countries, focused on the theme "Profit from Experience," with such topics as the importance of brands, open systems and successful retail solutions.

The system, called the Global Electronic Marketing and Merchandising Network, or GEMMNet, was developed by the Australian company Retail Automation Australasia using an IBM network and was launched in September, said Wills.

Wills described GEMMNet as a worldwide electronic catalog of goods and services that retailers can access using either computers or interactive voice response technology. A buyer can search for products on the basis of price or quality; negotiate with potential sellers via electronic mail, fax or the telephone, and then order, using electronic data interchange or fax, he explained.

"GEMMNet is an electronic marketplace," Wills said. "It gives the ability to move goods and services worldwide without a distribution center. It is the next generation of technology for retailers and will provide support for global retailing."

The system has 200 subscribers in the United States, Australia, Hong Kong and New Zealand and expects 300 more to sign on next

month. "By December 1995, we hope to have at least 50 countries and 25,000 manufacturers-vendors on the system," Wills said.

Among the U.S. subscribers are Oneota of Seattle, the Woolworths supplier of pears and apples, and Safeway San Francisco, which provides 14 fresh food products to the Australian company.

Woolworths currently is in talks with about 100 other food cooperatives that supply Safeway, as well as 20 to 30 other U.S. companies represented by about 1,400 food brokers, Wills said.

Wills said GEMMNet enables retailers to significantly cut costs by eliminating excess paperwork and multi-identification product codes and reducing inventory by arranging just-in-time deliveries.

"It gives massive savings in procurement and management of stock," he said.

The service costs subscribers $74 ($100 Australian) a month. GEMMNet soon will become part of the worldwide InterNet, as well as CompuServe and other online computer services, to extend its availability, Wills said.

The system features a full-image data base so products can be viewed via computer, Wills said. Payment can be made using GEMMNet and electronic funds transfer.

In Australia -- where Woolworths has a 33% share of the food retail market with almost 1,000 stores -- the service links the chain with about 180 members of the Australian Food Brokers Association. The association plans to introduce GEMMNet to all of its 400 members covering about 25,000 products, Wills said.

In New Zealand, about six cooperatives subscribe, including the New Zealand Kiwi Fruit Board.

Woolworths' enthusiasm for GEMMNet is a result of its dominance of the Australian retail market, Wills indicated.

Its goal is to grow to a 40% share of the food retail market there and it is becoming so large that the Australian government has asked the chain to focus on growing outside its home market.

Woolworths now would like to transfer its knowledge of distribution, logistics and product sourcing into China and other markets and sees GEMMNet as a tool in that plan.

The company has no plans to open stores on its own in those markets, however. Woolworths and the Chinese government are discussing using GEMMNet to manage that country's external trade. The government will decide by the end of the year; the goal is to introduce the service in time for the opening of the World Trade Center in Shanghai in March, Wills said.