Retail Technology

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Retail Technology

• 
  Khaled Hamid
  
  Assistant Professor
  
  School of the Arts
  
  Virginia Commonwealth University
• 
  mhamid_at_vcu.edu

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Today

• Options available
• What to look for and mistakes to avoid
• Future Trends

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• It is not the strongest species that survive,
  not the most intelligent but the ones most
  responsive to change
• Charles Darwin

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• When the rate of change outside your company
  exceeds the rate of change inside your company,
  disaster is imminent.
• Lou Pritchet Senior VP, Procter Gamble

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• The short term impact of a new technology is
  usually overstated, the long term benefit is
  often underestimated
• The Economist

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Remember.

• Technology is just a tool, do not make it the
  central focus of your store
• The central focus of your store is and always
  will be Customers, Staff and Products
• Important Rule Technology must benefit the
  Customer

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How Can Technology Help Me?

• 1 Increase Sales
• Building relationships
• Customers vote with their wallets, count the
  votes! (buy what is selling)
• 2 Reduce expenses
• Efficiency is essential in 00s (ordering,
  receiving, delivery, selling)

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Key Technologies in Retail

• Internal
• UPC scanning at POS
• Fully integrated systems
• CRM
• Staff productivity monitoring/motivating
• Traffic counters
• PDAs for inventory management (e.g. Tracer Plus)
• The Internet B2B
• External
• The Internet B2C, C2B
• Cell Phone revolution (coming soon to your
  customer!)

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The Four Main Retail Software Programs

• Integrated vs. Single Stand Alone Programs
• POS/Shopping Cart
• Merchandising
• Customer Database
• Financial
• Of the four key areas,probably financial makes
  the most sense to be stand alone

4 Main Types of Software
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Retail Management System

• Designed for independent merchants
• One integrated solution
• Ease of use from a trusted provider
• Labor and time savings
• Capable of growing with business
• Rapid ROI less than one year payback
• (e.g. Microsoft Retail Management System)

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How much should I spend ?

• Year sales x 5 years x .02 Budget
• 100,000 x 5 x .02 10,000.00
• Ideally spend half of the budget on Hardware (40
  of the 50) and Software (60 of the 50) and the
  remainder (50 of total) on Training
• In above example you could pay 2,000 for
  hardware, 3,000 for software and 5,000 for
  training. Depreciated over 5 years

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Possible POS usage-

• Multiple tender, cash, charge, debit etc.
• Customer look up, phone , by name
• Like item look up / suggested add-ons
• Other store stock position look up
• On order look up
• Last Purchases, critical dates for Customer

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Merchandising usage

• Vendors by
• volume, mark downs, gross margin, sell through,
  on time and fill rates
• Returns/Complaints from customer by reason code
• Sales volume margin by customer
• Sales average transaction by employee
• Items per ticket
• Integration to traffic counting system

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Inventory Management

• Analysis of inventory, sales, and on hand
• Open To Buy
• Automatic replenishment and automatic re-order
• Age of inventory, dead dates with suggested mark
  down timing

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Purchase Orders Receiving

• Automatic generation of POs
• Copy function of old order to new
• EDI capable
• Fax capable from desk top
• AP projection
• Scan each item into inventory or key it
• Back orders
• Automatic invoice matching

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Customer Database

• Does it have one?
• Is it completely linked to POS transactions?
• Can you define and add fields?
• Can you quickly print mail labels or send e-mails
  to only certain customers?
• Can you merge specific data to pre written
  letters or e-mails easily?

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Database(Cont.)

• Is it easy to create queries that you can use?
  i.e. names and address of every customer who
  purchased specific item last month?
• Does it tie into caller id?
• Can you sort by purchase/profitability?
• Track recency, frequency and amount?
• Easy to set up and use?

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Financial, what do you need

• AP, (AR)
• Reports for your Accountant
• Reports for your Bank Manager
• Reports for the Government
• Other reports
• Financial reports deal with the past, they are
  important but secondary to merchandise POS.

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Other Options
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The Web

• COMMON MISTAKE
• I dont need a web site
• My Customers dont use the web
• I dont want to sell on the web

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Get a web site

• Have at least basic information on it
• Store pictures
• Address, all contact information
• Store hours, instructions on how to get to you!
• Product information
• Mission statement
• You do not have to sell on the web, but why
  wouldnt you?

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the Web

• Communicate
• Answer all e-mail within 24 hours
• Company information
• Location map
• Hours
• Staff
• Product information
• Customer Surveys

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Things we take for granted

• THE PHONE( the yellow pages)
• What if a phone rings after hours or during
  busy times, etc
• USE VOICE MAIL
• Advertise on it

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Dont Forget The Yellow Pages

• Many Customers let their fingers do the walking
• Look up your competitors, what are they doing?
• Are you listed? Is it the right category?
• DID YOU KNOW If someone goes out of business
  you could have the calls directed to your store!!
  

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• Things to remember
• and
• Mistakes to avoid

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Common Mistakes Software..

• Not Fully Understanding Needs and Benefits
• Some features are never used needed features
  missing..e.g. No Department, Class discipline
• No OTB Plan
• One Size Fits All Modified Software or
  software made for a different kind of business

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• Make sure it is customizable without
  modifications
• Stay in upgrade path, never fall more than one
  release behind
• Changes made to the code that removes it from
  upgrade path
• Buy your software from someone who will be around
  in 10 years
• Software that does not work with other software

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• Hardware is a bad place to make a mistake but not
  as costly as a software mistake
• Its usually the softwares fault
• Ask the right questions of current users
• Get return guarantee on software (90 days)
• Ask the software vendor what is best
• Shop around, an outstanding service is worth up
  to 50 more

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Remember You Get What You Pay For!

• Why would you encourage your customer to buy
  quality service and yet you try to buy
  discount for yourself?
• Good software costs money! People who write it,
  sell it, support it and teach it are
  professionals
• Avoid No (or Incomplete) Training of Staff

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Training is very important

• Training can cost up to 8x more than software
  costs
• Insist on at least four levels of training
• Pre Install
• Install
• Month End
• Strategic Use
• Join a user group

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No Backup

• No Back Up of Data, Unprotected System
• Buy the best back up hardware available and
  replace media frequently
• Verify weekly with full read restore
• Keep in fire proof safe off site
• Full system back up nightly

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No Firewall and Security Policy

• No firewall on mail server
• Out of date firewall on web/mail server
• Passwords written down and never changed
• Update firewall and virus software constantly
• Lock drives and USB ports to deter unauthorized
  access
• Change passwords monthly and enforce use

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RFID and Retailing

• RFID(radio frequency ID)

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RFID

• It is a method of remotely storing and retrieving
  data using devices called RFID tags/transponders
  and is coming into increasing use as an
  alternative to the bar code.
• Allow for non-contact reading and are effective
  in manufacturing and other hostile environments
  where bar code labels could not survive.
• RFID systems can be used just about anywhere,
  from clothing tags to missiles to pet tags to
  food -- anywhere that a unique identification
  system is needed. The tag can carry information
  as simple as a pet owners name and address or the
  cleaning instruction on a sweater to as complex
  as instructions on how to assemble a car

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RFID a Major Time Saver

• RFID avoids the need for line of sight and
  provides the ability to read multiple tags at the
  same time

Match Shipment To Purchase Order
Track Trace
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RFID Store
Back Room
Sales Floor
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PRADA RFID Closet

• Once inside the dressing room the customer can
  directly access information that relates to their
  particular garment selection.
• As garments are hung in the closet their tags are
  automatically scanned and detected via RF
  antennae embedded in the closet.
• Once registered, the information is automatically
  displayed on an interactive touch screen,
  enabling the customer to select alternative
  sizes, colors, fabrics, and styles, or see the
  garment worn on the PRADA catwalk as slow-motion
  video clips.(source IDEO)

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More to look for.

• PDA/Phones/GPS
• Look for the PDA and Phone to merge and GPS to
  add a new dimension in location, product push and
  payment
• Easy Pay/Gift Cards
• Cash is analog, cards/chips are digital look
  for more ways to may payment easier and painless
• The Internet
• Will continue to extend its reach onto cell
  phones and Froogle will develop a killer web
  application for phones

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Interactive Dressing Room

• Each dressing room booth comes with glass walls
  that switch from transparent to translucent when
  a room is occupied.
• Once inside, the customer can switch the doors
  back to transparent at the touch of a switch,
  exposing themselves to onlookers waiting outside
  the room.
• Different lighting conditions allow the customer
  to view their selection in a warm evening glow or
  a cool blue daylight.
• The dressing rooms also contain a video-based
  "Magic Mirror" which allows a customer to see an
  image of their back. As the customer begins to
  turn in front of the mirror the image becomes
  delayed, allowing the customer to view themselves
  in slow motion from all angles. (source IDEO)

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• THANK YOU