Woolworths South Africa implements buying, assortment-management solution
Dallas Woolworths South Africa has implemented a solution from i2 Technologies, Dallas, to improve buying and assortment management processes for its clothing and general merchandising groups.
Through the deployment, Woolworths expects to improve buying and assortment-management processes, product availability and overall customer satisfaction while reducing markdown costs.
As a result of its work with Woolworths, i2 has been awarded the company’s “Key Partner of the Year Award” for its contribution and commitment to the implementation of the planning solution for clothing and general merchandise at Woolworths.
“We selected the i2 Buying and Assortment Management solution based on its advanced technology and richness of functionality,” said Paula Disberry, divisional director, merchandise planning, Woolworths. “We were already using i2 solutions for forecasting and profiling, merchandise planning, replenishment and master data management, and wanted to take the next step to improve store allocation and product availability in stores with an ultimate goal of improving customer satisfaction.”
Pos Stays ‘Front End’ Center
In-store technologies are a constant area of focus at RSR. Annually, RSR conducts an in-depth benchmark report to unearth where retailers see the biggest challenges, opportunities and inhibitors to leveraging more advanced technologies in their stores. Clearly, point of sale still seems to be at the center of retail strategies—and opportunities.
The following is from this year’s study, the “Customer Centric Store Benchmark Report,” released in April 2008. It had 126 qualified retail respondents, with 73% coming from the United States. Of the 126, 60% were general merchandise and apparel (GMA) retailers, 29% were from the fast-moving consumer-goods (FMCG) segment, and the remaining 11% were from the hardware/DIY/other category. Also, 34% were “winning retailers” (those whose sales outperform inflation), 46% were average retailers, and 20% were lagging retailers.
Across all retail segments and tiers, modern POS hardware and software are the critical technologies required for a satisfactory in-store customer experience. Directly, speed of checkout is critical to leaving a lasting impression on the customer. Indirectly, the ability to capture detailed, accurate information at POS is the linchpin to capturing data for enterprise-wide business intelligence, improving store planning, allocation and replenishment, and ultimately reducing out-of-stocks (identified by retail winners as a critical component of the in-store experience).
It is interesting and heartening to find real-time cross-channel inventory and customer-data synchronization rising in retailer importance. This is a direct result of customer demands and expectations and was also identified as a top technology driver in RSR’s most recent multichannel retailing benchmark report, “Finding the Integrated Multi-Channel Retailer.”
For the most part, RSR wasn’t surprised by results regarding the value proposition of different technologies across retailer segments. In general, FMCG retailers place a premium on self-service convenience, while general merchandise and apparel, and the DIY and other product segments place a higher premium on more high-touch technologies.
The following are specific technologies that provide the FMCG segment more value than other segments:
Customer-facing self-service touchpoints – 86%
Digital signage – 91%
Dual-displays at POS – 91%
Self-checkout – 77%
In-store rewards and coupons – 82%
Personal scanners, product information kiosks, employee product-information training – 91%
Cross-channel customer and inventory synchronization – 77%
Distributed order management – 77%
Employee selling tools on the selling floor – 90%
RSR was more surprised by the lack of importance GMAs placed on some technologies that should be critical to these retailers’ success:
37% find little to no value in distributed order management
33% find little to no value in employee selling tools on the sales floor
27% find little to no value in modern POS hardware and software
46% find little to no value in providing KPIs (key performance indicators) and alerts to field management on mobile devices
RSR remains hopeful that the customer will pull these retailers in the right direction. If historically “stodgy” FMCG retailers can see the value in distributed order management, surely GMA and other retailers can find the same.
Given the ongoing economic crisis, retailers are under more pressure than ever to operate more effectively and get more out of their existing assets. Perhaps no area of store operations offers more opportunity for savings than energy. Despite the potential for savings, however, the why and wherefore of energy management remain a mystery to many top executives.
“Energy has never gotten the high-level attention it deserves,” said Dean Lindstrom, president, Novar, Cleveland. “But my experience has been that once a CEO understands and realizes the potential opportunities for savings, he or she wants to take action right away.”
Most important, according to Lindstrom, is for a CEO to understand that energy costs, similar to labor costs, are something that a company can have control over as opposed to being a budgeted item year after year.
“It’s pretty simple: A company can do something about energy, or spend more money to open more stores to get the equivalent results,” he said. “You’re talking about a return on investment of 20% to 40% on initial energy-related technology and equipment. On an ongoing basis, in terms of strategic energy-management programs, the ROI can be 100% or more.”
Lindstrom noted a company’s energy strategy has to be consistent with its overall business strategy.
“For that reason,” he said, “the chief executive should be the one to drive the strategy.”
With so much on their plates, chief executives obviously don’t have time to get into the nitty-gritty of energy management. But essentials they need to know, according to Lindstrom, include:
- Energy prices are volatile. Crude oil was selling at $100 a barrel in spring 2008, and by July, it had jumped to $150 a barrel. By November, the price had fallen to about $47.
“The takeaway here is that energy prices are extremely volatile,” Lindstrom said. “This is not one of those things a company should just sit back and do nothing about. It calls for a strategy.”
While downward spikes may offer some relief, they are only short term, according to Lindstrom.
“Energy prices will only go up over the long term because there is not enough growth in generation capacity to keep up with the increases in demand,” he explained.
- Sustainability makes good business sense. A holistic energy strategy will help retailers understand how sustainability ties directly into their income statement.
- Abroad energy-management strategy can deliver significant earnings per share results quickly. “For example, we have put the numbers together for specific cases, outlining actions we have taken and what additional things could be done, with the total result being an extra five cents on a company’s EPS,” Lindstrom said. “The financial returns on energy management are very strong.”
- Technology is only part of the solution. Too many people believe that energy-management technology in and of itself is the answer, and that it will provide magical returns year after year.
“Energy-management technology is a tool,” Lindstrom explained. “It’s the central nervous system for the building. If you don’t do something with it, it just collects dust.”
Instead, retailers should consider technology as the first piece of a comprehensive strategy. It is key to helping retailers understand how their existing portfolio is operating.
“There also needs to be ongoing commissioning, monitoring and control of what is happening, literally on a daily basis, either done internally or by an outside expert,” Lindstrom said.
- To get the most out of energy management, work with experts. Very few, if any, retail companies have the resources to keep up with the volatile energy market from a skills-set, technology or knowledge standpoint. The need for a dedicated resource is made even more urgent by the fact that energy-related technology and tools change daily.
“Retailers’ core business is selling merchandise, not being energy management experts,” Lindstrom said. “A chain, even the most energy-savvy, can only do so much internally. You need dedicated, strategic partners—experts—to help you on a long-term basis in a collaborative fashion. That’s how a company will get a maximum return on its energy-management investment.”