August 28, 2003, 12:00 AM

What’s In Store

(Page 2 of 3)

The Retail Pro system integrates with a credit card processing system from Shift4 Corp. that moves card authorizations over an always-on Internet connection, with no interruption to dial up a network, Jeglum says. Alaska Riverways chose to implement faster card transactions early, because they directly affect daily sales and customer satisfaction. But this fall Alaska Riverways will also begin to benefit from integrated POS and inventory data, providing managers with constant updates of inventory levels, and granting customers, both online and offline, real-time notices of the actual availability of products. The key to making the system effective is the constant updating of inventory data with POS data.

While many retailers will program their POS systems to update inventory once or twice a day, St. Croix’s system updates all the timeñ-an option supported by the availability of a high-bandwidth Internet connection.

The system helps headquarters better manage the supply of goods throughout its chain. “We may see that what’s selling really well in the Southwest is not selling in the Northeast, so it gives management the insight to put products where customers will buy them,” Meyer says. As St. Croix managers analyze sales activity by product at each store, he adds, they can use a logistics module in the same Retail Pro system to arrange transfers and deliveries of inventory to the stores that need it. And that means fewer markdown prices, as products sell to the customers showing the highest demand for them.

The flexibility of web-enabled POS systems can also integrate POS and inventory data for online as well as offline operations. Buccaneer Heaven, a store and web retailer of products licensed by the Tampa Bay Buccaneers football franchise, uses software from UniteU.com and Retail Technologies to integrate online and offline POS and inventory data. “My Internet site, BucGear.com, talks to my store inventory system,” says owner Jeffrey Fox. “If someone in a store buys the last item of a product line, someone on my web site will automatically see a note that the product is on back-order.”

The leading technology for CRM

The ability to easily integrate a web-enabled POS system with other applications supports additional ways to leverage POS data and improve relationships with customers, analysts say. “Retailers realize they can upgrade their POS systems and then set up to do other things in a completely integrated infrastructure,” Gartner’s Roster says. “POS is the leading technology they can get immediate benefit from, then position themselves to take advantage of whatever customer relationship management or other strategy they want to roll out over the next few years.”

Analyzing what an individual buys, how often, and in which channel, for instance, will provide valuable information to support targeted CRM campaigns, such as through e-mail marketing or POS terminal alerts that help cashiers cross-sell merchandise. “There are natural links between CRM and POS strategies, which are each key strategies for the next several years,” Roster says.

The Bombay Co., a home-furnishings retailer, is already planning to leverage its new web-enabled POS system to support improved customer relationships. “Web-enabled POS will allow us to do a lot of things we couldn’t do before,” says Matt Corey, vice president of e-commerce and marketing.

Bombay recently completed a 10-store pilot of the Integrated Store Operation web-enabled POS system from Retek, which it plans to roll out to all 388 stores this fall. The system can tailor targeted marketing campaigns based on an individual customer’s shopping history, but it can alert store clerks at the point of sale to a shopper’s preferences, providing the opportunity to inform the customer of products or specials she might find interesting. “If a customer from Texas walks into one of our stores in Connecticut, we can see specific data on that customer,” says Chris Benner, manager of store systems.

Such cross-selling opportunities work best in specialty stores that thrive more on intimate relationships with customers than on high volume and long checkout lines. “Our philosophy is to cross-sell products based on personal information that appears on the POS screen,” says Meyer of Croix Retail. St. Croix Shops have increased their amount of cross-selling and upselling of products, he says, leading to more products sold at their original prices, instead of later at discount.

A cashier can also view real-time data on available inventory both at the warehouse and in other stores. So if a customer can’t find what she’s looking for in a particular shop, the cashier can check when and where it may be available. “Sharing that information with customers makes customer service a strong point for us,” Meyer says.

Retailers continue to develop ways to leverage their web-enabled POS systems. At Vineyard Estate Wines shops, a particularly helpful feature is being able to distribute new prices over the web to each store’s POS terminal, instead of sending out paper sheets. “It helps with consistency across the chain and reduces the amount of errors,” Totzke says.

Undoing the rivalries

Web-enabled POS technology also supports an automated alert mechanism designed to keep headquarters in touch with in-store operations. Siva Corp., for instance, offers an EventAlert feature as part of a web-enabled POS system that notifies managers of exceptions to pre-set performance parameters, such as the number of POS transactions per hour during a peak lunch period. The alerts can be set up to appear in multiple ways. While a back-office store manager might prefer to receive an alert on a web page, a district manager might prefer a message to a handheld device, says Siva CEO Jim Melvin.

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