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Focus on: Operations

BY Connie Robbins Gentry

Given the escalating cost of fuel, conventional wisdom dictates the way to save money would be to schedule fewer miles. But this is not always the case, as witnessed by specialty retailer LifeWay Christian Resources, which found that more frequent deliveries translate to less cost across its retail enterprise.

LifeWay Christian Resources, which operates 170 stores throughout the nation, reinvented its distribution model — shifting from one consolidated truckload delivery per week to its stores to multiple UPS deliveries of smaller quantities.

“Even with the increases in fuel costs, it is still more efficient overall to have frequent store deliveries with smaller volumes rather than one large delivery per week,” said Mike Harry, chief supply chain officer at LifeWay Christian Resources, Nashville, Tenn., whose stores sell a wide variety of Christian materials and services, including books, music and videos.

The benefits to store operations have been numerous, particularly the reduction in time to process deliveries and the ability to get product on the selling floor more quickly. Store managers know precisely when UPS will deliver each day and exactly what is in each shipment. This visibility, plus the smaller volume of product arriving in each shipment, enables more productive scheduling of store associates and more proactive outreach to customers waiting for new or special-order merchandise. Previously, LifeWay found that while it often had stock on-site, associates couldn’t find the items they needed because supply rooms were jammed with boxes of inventory needing to be unpacked.

“At a high level, we save approximately one hour per store per week — that’s 170 hours saved per week, which is very significant when multiplied across the year,” Harry concluded.

Before adopting the new distribution model, 65% of merchandise shipped direct to store and only 35% went through the LifeWay distribution center. Today that model is reversed: 65% of store deliveries are processed through the DC and arrive at stores in small, easily processed quantities.

“Our goal is to make delivery of product as seamless and quick as possible,” Harry explained. “We have taken steps to minimize the impact of deliveries at the store level by doing things like pre-pricing product before it ships so it arrives floor-ready, and store associates can focus on serving customers rather than performing backroom functions.”

In addition to maintaining and replenishing some 16,000 SKUs in its stores, roughly 130,000 SKUs are available to LifeWay customers via special order and the company’s e-commerce site. A robust visibility tool available through UPS, the Quantum View Inbound Notification system, marries the physical movement of goods with the movement of information — effectively providing store managers with an advanced view of inbound shipments so they know what is arriving on any given day. This visibility and the consistency of UPS deliveries contribute to a positive shopping experience in the store and enhanced service for e-commerce as well as special-order customers.

Looking ahead to the 2012 back-to-school and holiday seasons, Kiel Harkness, UPS retail strategy manager, noted: “E-commerce is the fastest-growing channel, and excellence in fulfillment operations is becoming a key differentiator for retailers. Increasingly, retailers must have the ability to deliver packages when consumers expect to receive them and provide information along the way.”

Lifeway’s Harry acknowledged that the new distribution model was counterintuitive to the retailer’s historical practices and certainly presented a cultural shift. But he said the chain drove the change by helping everyone to understand costs from a holistic standpoint rather than just based on one segment in the operation.

“You have to look at the savings from the standpoint of total operations, not just transportation costs,” Harry emphasized.

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Trending Toward Tablets

BY CSA STAFF

Today’s retail associates have more selling tools at their disposal than ever before — not the least of which is the increasingly popular tablet. The mobile device has taken not only front-of-house selling to new levels but has added efficiencies and enhanced employee productivity to back-of-house functions as well. Chain Store Age talked with Mike Stinson, VP marketing of Motion Computing, about the trend toward tablets.

What are some of the most prevalent uses of tablets in the retail environment?

The most obvious is assisted selling. For example, today’s customer may have a smartphone, will have done comparative shopping in advance of the store visit, and then will enter the store in search of a specific product. The tablet enables the associate to provide that customer with additional information and features.

How does the associate best utilize the tablet in that selling situation?

Imagine presenting that customer — via a media-rich tool with a 10-in. display — with product accessories, side-by-side comparisons, information about what inventory is in stock, what pricing specials might be in play, and what kinds of warranties or rebates are available. What’s more, the associate can swipe the customer’s loyalty card and see what additional value can be provided.

Do you have a real-life example of a tablet being utilized for selling?

We have a retail furnishings customer currently involved in a tablet pilot. Using the tablet means that retailers’ sales associates don’t have to abandon customers to retrieve catalog information from the backroom. An associate can remain with the customer, pull up additional information about, for instance, a couch she is looking at, show the different colors the couch comes in, show various cushion selections and display accompanying pieces such as end tables.

In this scenario, the likelihood of completing the sale goes up and the average ticket increases as well.

What is generating the most interest among retailers?

No question that it’s the mobile POS, whether for line busting or personalized transactions. A major wireless carrier is using the tablet in its stores to reduce wait time and increase sales floor efficiency. High-end department stores use the tablet to allow associates to follow the sale through to transaction completion without passing the customer to another employee. Again, this is expected to increase the average revenue per transaction, as well as the close rate for each employee.

How widespread do you think the use of tablets will become?

Our numbers are showing at least 70% of retailers are evaluating tablets for deployment right now. It’s not a one-size-fits-all solution, though. There are so many different work flows in a store — selling, managing, security and more — but my prediction is that there will be at least one flow in every store using a tablet within the next 18 months.

Compare the PC-based tablet with other operating systems on the market today.

The Windows-based tablets have the advantage in ease of integration and deployment because they are running existing operating systems and applications. Because other operating systems are targeted at consumers, they may seem more user-friendly. But they are generally optimized for media consumption and not for the data crunching and multi-processing required in a retail business environment.

What are the security issues with regard to mobile payment transactions?

There are three-day seminars on this topic. But the long and short of it is there is nothing really unique about a mobile tablet payment processing function versus taking payment at a fixed terminal. Retailers should look for devices that come with integrated security features, such as the Trusted Platform Module and MagTek or Merchant Link’s built-in encryption, which provide secure information management and enhanced data and business protection.

There are also many software solutions, such as Computrace from Absolute Software.

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B.Low says:
Jan-03-2013 05:12 am

Sant Ritz Sant Ritz is also near elite schools such as St. Andrew’s Secondary School and St. Andrew’s Junior College. Cedar Girls’ Secondary School and CedarPrimary School are also around in the area. For vehicle owners, it takes less than 10 minutes to drive to the business hub and vibrant Orchard Road shopping district, via Pan Island Expressway (PIE) and Central Expressway (AYE).

B.Low says:
Jan-03-2013 05:12 am

Sant Ritz Sant Ritz is also near elite schools such as St. Andrew’s Secondary School and St. Andrew’s Junior College. Cedar Girls’ Secondary School and CedarPrimary School are also around in the area. For vehicle owners, it takes less than 10 minutes to drive to the business hub and vibrant Orchard Road shopping district, via Pan Island Expressway (PIE) and Central Expressway (AYE).

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Mobility 101

BY Deena M. Amato-McCoy

While a Web presence is a prerequisite to doing business in the 21st century, the fact that 77% of consumers are now using tablet computers or smartphones to shop is forcing retailers to rethink their digital strategies, according to a survey from online price comparison engine PriceGrabber. Realizing this is not a decision to be taken lightly, retailers need to take steps to ensure that mobility can be an opportunity, and not a threat, to their business.

“There is a dramatic surge in mobile shopping,” said Graham Jones, general manager of Los Angeles-based PriceGrabber. “As smartphone and tablet computer usage becomes increasingly common, consumers embrace mobile as a go-to shopping platform since it can be easily accessed anywhere, anytime.”

The breadth of mobility moves far beyond simply allowing conducting purchasing transactions. Whether looking to more intimately connect with consumers, empower shoppers and store associates, or increase the speed of consumer interaction, mobility is clearly primed to revolutionize the retail experience.

Before chains can reap these and other benefits, however, they need to get their stores mobile-ready. Here are some basic steps to creating a successful mobile strategy:

• Establish a secure wireless network. Mobile devices, especially consumers’ personal units, are beacons for hackers. As such, retailers must be proactive to establish robust, secure wireless connections at store level. Attention should be paid to tokenization and PCI compliance to protect sensitive customer information and mobile payments moving between devices, retailer-specific apps and firewalls.

• Support multiple devices and operating systems. While iPhones are all the rage, they only comprised 28% of the market at the end of the third quarter of 2011, according to The Nielsen Company, New York City. Android’s operating system accounted for 43% of the market (an unprecedented jump from 9% in 2010), and 18% of smartphone users accessed a RIM BlackBerry operating system.

Chains must be mindful to ensure their mobile platform supports all hardware options. They also must deploy device-specific user interfaces and middleware that can detect online traffic patterns and the browsers that access retailers’ mobile sites.

• Integrate mobile into existing shopping channels. Consumers expect — and deserve — a consistent shopping experience regardless of the channel they visit or customer touch point they use. This factor will become mission critical as more chains adopt an omni-channel retailing strategy.

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M.Smitdth says:
Feb-20-2013 05:12 pm

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M.Misiek says:
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