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Managing Rollout for Growth-Oriented Companies

BY Marc Millstein

When you work in an extremely fast-paced environment like retailing and tie it to a growth-oriented strategy that involves both new stores and new selling channels, there is no time for downtime, and little, if any, tolerance for vendors that can’t deliver what’s needed on a nearly instantaneous basis.

Moreover, the fewer vendors a fast-growth company has to deal with, the better. The more complex the challenges involved in serving customers, the simpler and more straightforward the technology infrastructure, and especially, maintenance and management of those IT systems must be.

Those were just a couple of the hard-hitting and no-nonsense messages delivered by retailers during a panel discussion on POS maintenance led by John Pruban, president, TekServe POS at the Technology & Operations Store Summit (TOPSS) hosted by Chain Store Age and Retail Technology Quarterly in Las Vegas in October. Sitting on the panel were systems directors and managers from Eddie Bauer, Sharper Image, The Sports Authority, Neiman Marcus Information Group and Williams-Sonoma.

Paul Engle, director of POS at Sharper Image, cited his own experience of the past when he held a much different viewpoint regarding mixing and matching of vendor solutions. “It seemed like a good idea at the time—to have 10 vendors, one for each and every thing. But I soon realized it was taking all my time just managing them,” he said.

For Engle, Sept. 11 was the wake-up call when he found himself in a situation with quite a few stores near the site of the attack. When he tried to get the vendors to help with restoring some of their own systems, all he got was “lots of finger-pointing.”

“With the diversity of what we are trying to do in-store, online and via catalog, we can’t have one vendor, but we still try to keep the number small,” noted Beth Williamson, manager, store technology, Williams-Sonoma. But that small number of vendors each better produce. “As soon as I talk to a vendor and they say they can’t do this or that—I stop talking. I need ‘soup-to-nuts’ in each store so that I know what is happening in each store. I do not have time for any finger-pointing,” she said.

Ron Sims, manager, store systems and desktop support, Neiman Marcus Information Group, noted the challenges in going with consolidated services, especially if you are doing so under a cost-containment mandate. “We always used Tier 1 companies. No CIO ever got fired for using Cisco, as they say,” Sims noted.

But when the company got a mandate to cut costs, Sims had to go in another direction. “We had to become more simplified, for one thing,” he said. He also had to look for a different type of maintenance company to work with—Sims couldn’t afford an IBM- or a Cisco-type company. “There were risks involved, yes. But we have now gone with Consolidated Services and it is the way to go. They respond more quickly and there is much less bureaucracy. I am only a small player, however, with 40 stores.”

John Connolly, business systems manager, retail operations, Eddie Bauer, also cited advantages to doing with one or a very small number of players to handle POS. But he also urged caution. “One thing in having less complexity and building stronger relationships with one or a few vendors is you really need to avoid the big bureaucratic institutions. With the situation I have now, I can pick up the phone and know who exactly to call.”

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CompUSA may get a new look

BY CSA STAFF

ADDISON, Tx. After opening a new format store last month, CompUSA may be changing the format of its other stores, depending on customer demand and product interest.

According to reports, the elements found in the prototype store, located in Texas, will be incorporated into other CompUSA locations across the United States.

The nearly 7,700 square-ft. relocation site includes an Apple shop featuring Mac computers, iPods and Apple accessories, and a full-length LCD TV wall.

Additional expansions include extended gaming, which includes an entire wall devoted to the Nintendo Wii, PlayStation3 and Xbox 360 gaming platforms, plus a PC gaming setup to test equipment and play new titles.

While businesses can get their share of support with a specialized services section, all consumers can visit the store’s redesigned IT support area.

“This new store aligns CompUSA’s vision to better serve its three core customers, the technology enthusiast, educated professional and small and medium businesses,” said Gabriela Villalobos, the retailer’s sales and operations evp.

CompUSA announced in April that it would narrow its focus to three core customer groups rather than try to serve a mass audience.

The move was part of a comprehensive restructuring, initiated last February, that included an overhaul of senior management and the closure of half its store base as the privately held chain looked to improve sales and profitability.

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Walgreens withdraws from CVS provider plans

BY CSA STAFF

DEERFIELD, Ill. After many months of talks over low and below-market payment rates by CVS Caremark for four prescription plans, Walgreens has withdrawn as a pharmacy provider from the plans.

Patients affected include members of prescription benefit plans managed by CVS Caremark for ArcelorMittal, Johnson Controls, Progressive Casualty Insurance and Wisconsin Education Association Trust.

Most of the affected members live in Illinois, Indiana, Michigan, Ohio and Wisconsin.

Trent Taylor, president of Walgreens Health Services, the managed care division of Walgreens, released the following statement:

“This is not where we wanted negotiations to lead,” he said. “We’re sorry that our pharmacy patients and CVS Caremark’s clients are caught in the middle, and we’ll do all we can to ensure a smooth transition for our patients to another pharmacy. Meanwhile, we’ll continue to work on resolving this issue with CVS Caremark.

“Leaving a benefits plan is an extraordinary step for us, but it demonstrates how extraordinarily low our payments were from CVS Caremark. We can’t continue accepting reimbursement rates that are drastically below market, while offering patients needed special services such as 24-hour pharmacy access and drive-thru pharmacies.”

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