BREAKING NEWS

Drugstore chain uses analytics to gain insight into IT performance

BY Deena M. Amato-McCoy

Walgreens is relying on data analytics to ensure all of its IT systems are working as efficiently as possible.

Through a partnership with IBM, the drugstore chain is taking steps to drive more IT support across its enterprise. The first step is to integrate hardware and software from different vendors under one roof. This centralization will make it easier to stay abreast of performance.

Next, the drug chain is utilizing IBM retail analytics at more than 8,100 locations nationwide to help improve the efficiency of field service support for these locations. Finally, IBM Cloud will determine the level of support that will likely be needed at each Walgreens location based on service request history.

In the future, this information may enable better anticipation and coordination when dispatching field technicians, so they arrive at the right time to resolve an issue. These data-driven insights may help to identify the most frequent service calls at a given location and bundle those requests into one service call to minimize repeated instances of system downtime.

These tools are also changing the way IT professionals approach IT support in the field. By shifting to more proactive, predictive solutions that isolate the root cause of a disruption, the company can eliminate repeated problems and free up time for IT professionals to focus their skills and attention on higher value initiatives.

These processes could manage even more locations going forward as the drug store chain announced Tuesday that it has finally secured regulatory clearance for a revised deal that gives Walgreens the green light to buy 1,932 stores, three distribution centers and related inventory from Rite Aid for $4.375 billion (and other consideration). The original proposal, announced in June, had included 2,186 stores and related assets for $5.175 billion.

Store purchases are expected to begin in October, with completion anticipated in spring 2018.

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DESIGN/CONSTRUCTION

Fast-casual giant to open its largest location ever — in New York City

BY Marianne Wilson

Chick-fil-A is going big in the Big Apple with a location that will also include some atypical features for the chain.

The company will open its third restaurant in Manhattan, on Fulton Street in the Financial District, in 2018. At more than 12,000 sq. ft., it will be the chain's largest location to date, with five levels, complete with a rooftop terrace for dining. It will feature design elements that have never been featured at a Chick-fil-A restaurant before.

“We pushed ourselves to break into new ways of thinking and try innovative solutions we’ve never implemented before,” said Nathaniel Cates, design manager for restaurant development at Chick-fil-A. “We are always thinking about how to make the dining experience feel as comfortable as possible for our customers.”

The design team took advantage of an open courtyard behind the building by adding a large window in the back of the restaurant. Since Chick-fil-A has the whole building, it also brought in natural light through a skylight. (Only three of the company’s more than 2,100 restaurants across the U.S. have skylights.)

In addition to the skylight, the Fulton street restaurant will have floor-to-ceiling windows on each level and brightly colored interior finishes. Starting on the second floor, there is a window that also spans the second and third floors, allowing natural light to flood in from the rear courtyard.

At only 15 ft. wide, the space is the chain's most narrow location. So the company built up. The restaurant’s five levels include two levels of kitchen space for food prep, and three levels of dining areas to seat 140 patrons.

A signature monumental staircase – the first one ever to be built for a Chick-fil-A restaurant – ties the five levels together. It will extend from the fourth level to the ground floor, accentuated by the skylight. According to Cates, the staircase, together with the skylight, alert customers that there is seating upstairs.

“A huge, white wall also extends along the staircase to reflect light down from the top floor to the ground floor,” Cates said. “This entire feature brightens the space and nicely creates an illusion of space.”

Chick-fil-A will occupy the entire building, which allows them to add a rooftop terrace. The space allows for views of New York City's latest architectural landmark, the Freedom Tower.

“The Fulton Street metro station is right next door to the restaurant, and no one will ever build on top of it,” Cates said. “That means our guests will always have the same views of Freedom Tower. That was another advantage of the building that we were grateful to have.”

Inside on the uppermost floor, there is another first for Chick-fil-A restaurants: A multi-purpose, semi-private section of the dining room that can be set up to reveal white boards and cork boards for group trainings or meetings. While it is designed with the company’s restaurant team in mind, the space may also be available for other groups in the future.

The new Chick-fil-A site sits less than half a mile from Ground Zero and the 9/11 Memorial. The company said it specific design elements have been incorporated into the restaurant’s façade in order to give passersby “a subtle impression of the Twin Towers.” The feature is designed to “acknowledge the significance of location.”

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ECOMMERCE

Study: Fraud losses, management eat up more than one-fifth of retailer revenue

BY Deena M. Amato-McCoy

Merchants’ fraud costs are a growing expense — and the pace shows no sign of slowing.

Fraud losses and management eat 8% of the average e-commerce retailer’s revenue, up from 7.6% in 2016, according to “2017 Financial Impact of Fraud Study: Exploring the Financial Impact of Fraud in a Digital World.” The report is from Vesta Corp. and Javelin Strategy & Research.

Merchants who sell only digital goods, like eBooks, eTickets and other instant download items have been the hardest hit. Fraud operations account for 9.7% of revenue, and their fraud spend increased by 42% year over year.

Compared to 2016, chargeback losses — which occur when merchants end up footing the bill for legitimate consumer or fraudster purchases — increased by 60% among digital goods merchants. This jumps to 75% among those merchants selling strictly physical goods.

Meanwhile, false positives — which occur when merchants mistakenly decline legitimate transactions — grew by 25% among digital goods merchants, and 27% among physical goods merchants.

The average e-commerce merchant now devotes 21% of its operational costs to fraud management, up from 18% in 2016. Overall, the average retailer’s fraud management spend increased 17% in 2017.

"Merchants' fraud costs continue to rise year over year," said Javelin Research director Al Pascual. "While some merchants have experimented with new fraud fighting tools and tactics, on the whole, they haven't been able to keep pace with dynamic fraudulent threats.”

Looking ahead to the next 12 months, e-commerce retailers plan to utilize at least 14 different payment security techniques and solutions to combat fraudulent purchase attempts.

"The writing is on the wall," explained Vesta chief marketing officer Tom Byrnes. "If merchants don't modernize their fraud protocols, they won't be focused on growth or innovation; they'll be struggling to stay in business."

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