BEYOND THE WEB

MARC MILLSTEIN Additional reporting: DENISE ZIMMERMAN

CORONADO, Calif. -- Information systems executives are reigning over a world in which virtually every aspect of traditional supermarket business practices is changing from top to bottom.

Old assumptions about how business should be conducted -- from retaining loyal customers and winning new shoppers to working and communicating with trading partners -- are falling rapidly by the wayside.

The burgeoning role of the Internet, the quest to implement cost-efficient and highly effective electronic marketing programs and the ability to capture, store and use seemingly endless amounts of data are challenging IS executives as never before to all but predict the future and develop innovative systems and solutions capable of driving business profits into the next century.

It is against this backdrop of rapid change that IS executives from across the country are gathering here this week for the Food Marketing Institute's annual Information Systems Conference.

In a special supplement coinciding with the IS conference, SN conducted in-depth discussions with five leading executives on the most crucial issues facing the supermarket industry today.

Participants in the discussion were Don Reeve, director of information services at Wegmans Food Markets, Rochester, N.Y., and chairman of this year's IS conference; Tom Dooner, president of the retail technology group at Fleming Cos., Oklahoma City; Dick Lester, vice president of information services at Associated Grocers, Seattle; Ed Oertli, former director of retail services at H.E. Butt Grocery Co., San Antonio, and now director of major accounts at ACR Systems, Jacksonville, Fla., and David Reed, director of management information systems at Marsh Supermarkets, Indianapolis.

Information technology and the role it plays in driving business processes and key strategic decision making at all levels of the organization are quickly emerging as the No. 1 issue facing retailers and wholesalers today and in the future.

For that reason, IS executives and departments are facing a host of challenges as they seek to equip distributors with the wide range of mission-critical tools and expertise needed to cash in on new opportunities and remain competitive into the next century.

In a host of key IS areas, these five executives shared their expertise and inside views on where supermarket retailers and wholesalers are today in harnessing the power of technology, what major issues must still be addressed and what the future may hold for the industry. What follows are highlights of SN's wide-ranging conversation with these industry leaders.