News

Big Savings for REI

BY Marianne Wilson

Retailers are constantly on the hunt for energy savings, and data centers offer huge potential: By 2020, data centers could consume 10% of all U.S. power, according to some experts. Here’s how outdoor gear and apparel retailer Recreational Equipment Inc. (REI) is working to reduce energy costs and its environmental footprint in this critical area of operations.

REI has long been on the leading-edge of efforts to conserve energy and reduce its overall impact on the environment. Its most recent effort involves a retrofit of the layout and cooling system of its data center in Kent, Wash.

The initiative, done in partnership with Austin, Texas-based energy efficiency firm CleaResult, Austin, Texas, and utility provider Puget Sound Energy, has resulted in a 93% reduction in the cooling energy used to operate the facility.

The retrofit uses “free cooling” via a rooftop evaporator cooling tower to keep servers at optimal temperature. The system, from CleaResult, reduces the need for mechanical cooling nearly year-round, or about 8,672 hours annually.

REI estimates that the retrofit saves energy to power six of its stores, or approximately 2.2 million kilowatt hours a year. The efficiencies also translate into improved business resiliency and stability in the event of a regional power outtage.

In addition to rooftop cooling technology, the retrofit included the upgrade of backup battery banks, the removal of old power distribution units and the installation of floor brush barriers and curtain systems to contain cold air in critical areas.

Also, the subfloor cabling was rewired to optimize airflow under the raised floor. Because of the efficiencies gained, REI also reconfigured its redundant power supply.

“By examining our operations through a sustainability lens, we’ve achieved financial and environmental benefits and met our goals to increase efficiency, minimize disruptions and reduce our footprint,” said Kirk Myers, corporate social responsibility manager, REI.

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News

Paid in Full

BY Dan Berthiaume

Logic dictates that the easier it is for customers to pay for goods, the more likely they are to purchase them. Long lines, fumbling for cash or a payment card, and even the simple act of waiting for an associate to ring up a sale at a traditional fixed POS terminal are all impediments to converting sales from busy and distracted consumers.

In response, a number of retailers have recently leveraged a variety of leading-edge payment technologies to make the last, and arguably most crucial, step in the consumer’s “path to purchase” as streamlined and convenient as possible. Here are just a few examples of where retailers are taking the execution and processing of payments.

J.Crew Lets Customers Open Digital Wallets

J.Crew customers can take advantage of MasterPass at checkout, a digital wallet service from MasterCard that enables shoppers to use any payment card or enabled device to unlock a simplified and speedier checkout experience at any location.

With MasterPass, shoppers can pay for purchases through the click of a mouse, touch of a tablet or tap of a smartphone. The wallet securely stores shoppers’ preferred payment and shipping information, which is readily accessible when they click on the “Buy with MasterPass” button and log into their account.

Homeland Stores Hears Payment Opportunity

Homeland Stores, a 78-store regional supermarket chain headquartered in Oklahoma City, has successfully completed a mobile payments pilot program with mobile payments technology provider DoubleBeam. Launched in June of this year, Homeland’s SwiftScan mobile application allows customers to pay for purchases with a smartphone.

Once downloaded, customers can activate the payment option by taking a picture of a check and a photo ID. At the register, customers can then pay for purchases by scanning a QR code, and selecting the payment option.

Chili’s Brings Checkout to the Table

Chili’s Grill & Bar will bring tabletop tablets from Ziosk to all company-owned restaurants nationwide by the first half of 2014. With the primary purpose of enhancing the guest experience, the Ziosk 7-in. tablet will be displayed on each table in the restaurant, giving patrons the ability to interactively peruse menu items and specials, as well as order beverages and desserts.

In addition, customers can use the tablets to play games together, share their real-time feedback with the brand and pay the check right at the table.

Harris-Teeter Takes Mobile Wallets on the Road

In a pilot at its Matthews, N.C., store, Harris Teeter is exploring the potential of mobile wallets by using Paydiant’s white label mobile wallet solution as part of its Express Lane online shopping service. Express Lane customers can use the Harris Teeter mobile wallet solution called “HT Express Pay” to pay for groceries ordered online from within their vehicle at Express Lane curbside pick-up locations.

Once the Harris Teeter mobile wallet app is downloaded to the customer’s iPhone or Android smartphone and payment cards are linked to the wallet, the customer will simply scan a QR code presented to them on a Verifone handheld POS device and use the mobile wallet to choose which of their major credit cards to use to complete the transaction, tap the “pay” button, and have a digital receipt automatically sent to their mobile device.

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SUPPLY CHAIN

Keeping Technology ‘Out of House’ with ITO

BY CSA STAFF

Chain Store Age recently had the chance to discuss the increasing prevalence of information technology outsourcing (ITO) in the retail industry with Vijay Iyer, senior VP and global head at international technology and services provider HCL America Inc. Iyer explained how outsourcing various IT functions can help retailers better control technology cost and performance.

Is ITO becoming prevalent among retailers?

Yes, ITO is becoming prevalent, with 26% of retail IT deals in 2011 being ITO-marked deals, and that figure is expected to grow to 37% ITO-marked deals in a market of $251 billion in 2015, according to Gartner projections. Retailers are looking for immediate variabilization of their IT costs. In the medium-size retail segment, IT cost is about 5% to 6% of total revenue, according to Gartner estimates.

Does ITO offer specific benefits to the retail industry?

Specific benefits for the retail industry include the immediate tying of significant IT infrastructure, apps and data management costs to in-store sales across regions. Any provider who can crack this can win deals.

Also handling the variability of IT expenses across geographic operations is a benefit for retailers. For example, if a retailer is experiencing revenue loss in one region and revenue growth in another region, the retailer expects its IT and data management costs to match accordingly. This includes the software licensing portions, which most smaller cloud providers can’t provide as ERP at this point. Retailers are keeping “cloud” in their mind-set, especially medium-sized retailers.

What kinds of IT systems/processes are retailers outsourcing?

Regarding IT outsourcing, retailers can be put together with fast-moving consumer goods (FMCG) companies, and their primary needs have traditionally been remote infrastructure management, master data management, Big Data and support, supply chain execution services, mobility solutions tied to social media (“Socialytics”), and data security monitoring and solutions.

According to current Gartner estimates, these six big areas are contributing to a market of $18.5 billion by 2018. The positioning of multinational corporations around this has been tied to cloud solution providers, with hosted private cloud solutions having the biggest uptake.

What do you think the retail ITO landscape will look like in five years?

There will be dramatic change with data management, analytics and cloud all moving into one, and both coverage and service providers with seamless integration abilities will be in a great position to cash in. The most important offering will be strategic intelligence (SI) capabilities that take into account cloud capabilities (such as HCL’s myCLoud), the Internet of Things, and increased marketing interest in IT services like self-service BI, and how new age, cloud-based IT solutions can enable that.

In addition, retailers will look at alternative models. The market will see more co-sourcing than outsourcing, and I believe we will see fee-based models wherever possible. Retailers will look for shorter cycle times for ROI of initiatives, and benefits management will become a top priority. The focus will be on ROMI, or return on marketing investment, to track marketing expenditures, which are perceived to be a drain on margins.

How is HCL trying to meet the outsourcing needs of retail clients?

Our ALT ASM application environment delivers cost savings and business-aligned IT. Our multichannel commerce offerings include Big Data solutions built around our ROAR (Real-Time Operational Analytics and Reporting) tool with a complete operational metadata management framework.

We also offer our zCMO proposition that provides technology for marketing operations around multichannel content management and distribution, predictive analytics and system integration. In addition, we offer a variety of supply chain management services and tools, including a partnership with Cisco around intelligent supply chain management. Other supply chain management offerings include inventory management, product lifecycle management (PLM), transportation management, vendor-managed inventory (VMI), the SAP advanced planner optimizer (APO) tool and critically important compliance tools.

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