Real-time, Centralized Information “Bridges the Gaps” in the Retail Continuum

By Allan Pulga

“Every decision within the retail organization is interrelated,” wrote Rena Granofsky.

That’s why retailers need a system that connects all the components of the business: from store operations, to distribution, to merchandising, to marketing, to finance.

In her 2005 White Paper for J.C. Williams Group, Bridging the Gap: Connecting the dots along the demand-driven retail continuum, Granofsky explains how computer database technology has evolved to let each department operate on the same information, to ensure consistent execution across all stores.

“Until recently, technology could not viably support one central data base and application suite,” she noted.

In the past, retail technology vendors could only offer platforms that still left the head office and stores disconnected. But now, technology has developed to offer a real-time platform that connects everyone across the organization: one central database and application suite.

By bridging communication gaps across the enterprise, the centralized platform reduces costs, improves execution of retail strategy and ensures business growth.

Using examples, Granofsky showed that retailers of old did things differently:

• Each store operated separately each day, with its own in-store database and applications. Store managers scheduled labour and managed inventory, while salespeople attended to customer data.
• At head office, each department operated its own database. Marketers created promotions, assuming resources were available to execute. Buyers created purchase orders and managed inventory based on yesterday’s information.
• At the end of each day, stores and head office passed information to each other, in an attempt to synchronize operations.

The major problems with the ‘Old Platform’ were efficiency-related. It was a waste of time synchronizing various databases, which involved unreliable manual counting and time-consuming data entry into spreadsheets. Even IT personnel wasted time supporting data, and sending and monitoring store updates.

Conversely, Granofsky points to the ‘New Platform’: A single, real-time corporate database coupled with central applications:

• A single database and application suite are used at the head office and by everyone across the enterprise, in stores and out, in real time.
• Stores connect to the central server at head office via a wide area network (WAN), typically Internet-based.
• All stakeholders are informed of each decision as it’s made, to assess the impact of their role and provide the resources to fully execute the decision.

The Benefits of the ‘New Platform,’ as listed by Granofsky, are obvious. Information is transparent across the entire retail continuum: from planning to merchandising and logistics to store operations. Accurate information is shared instantly, efficiently - no more time-wasting. Execution is co-ordinated, without gaps. Retailers build customer loyalty. And ultimately, retailers increase revenue, by delivering on their promises for both service and product.

To reinforce how the New Platform can transform a retail operation, she described the case of Sportsman’s Warehouse in Utah. Established in 1986, it became one of Utah’s fastest growing companies between 2001 and 2003, with 10 new stores and 50 per cent revenue gains in 2004. In 2005, the company employed 2,300 people.

In going from the Old Platform to the New Platform, the entire process became faster and easier for every employee, at every level of the company.

Example: Sportsman’s Warehouse (Utah)

Old Platform                                             New Platform                                       

Couldn’t complete nightly processes         No nightly processes

Databases out of sync                              1 database

1 day behind +                                         Realtime         

Implementation challenges (time)               Rapid implementations

Upgrade challenges (each device)             Rapid upgrades

No remote monitoring                               Remote monitoring

3 IT personnel for every 6 stores              1 help desk for 30 stores

Next day pricing, delivery                         Realtime pricing, same day delivery

Same price across stores                          Regional pricing

Inaccuracy and lack of trust                      Accuracy and trust

(Source: J.C. Williams Group, 2005)

“Real-time centralized architecture… is already proving its worth in terms of labor and cost savings,” wrote Granofsky.

“(It) makes retailers more responsive and able to take on the collaborative business model, connect the dots between people and processes across the enterprise, and cohesively turn plans into well-oiled execution.”

So getting the entire company on the same page (or in this case, the same information system) could be a lot easier than retailers might think. And the advantages of doing so speak for themselves. Centralized, real-time technology makes everybody’s job easier, saves the company money and indirectly generates more revenue.

Go ahead. Step up to the New Platform.