Computerlink: Retail software worth checking out: IT is enabling high-street stores to respond more efficiently to customer demand, reports Lynne Curry

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The Independent Online
BhS is spending more than pounds 9m a year; the fashion chain Oasis invested around pounds 300,000 four years ago and thought it had earned its money back within months.

The ingredient they find so valuable - in common with Liberty, Country Casuals, Monsoon, Jumpers, Allsports, Whistles and dozens of other retailers - is rapid information. Information enables one clothes chain to keep a supply of undyed woollens in a nondescript shade until a call comes for another six in rose pink or emerald green; it enables lettuces to carry on growing until a supermarket sees itself about to run out; it enables dithering customers to dither on and still find the size 14 tartan skirt they wanted a week later, even if there has been a run on tartan size 14s unprecedented in retailing history.

It allows BhS's suppliers to have new stocks ready for collection on a rolling 24-hour cycle - but, on a sadder note for the consumer, it enables stores such as Oasis to hold only two cut-price sales a year, so surely have they have been able to send their stock to the places where it would be bought at full price.

Professor Leigh Sparks, of the Institute of Retail Studies at the University of Sterling, a department which finances itself by selling its research and running retailing courses, has a variety of anecdotes revealing the mess that can ensue when retailers fail to co-ordinate sales and stock. 'I won't name names, but if you know of somebody who wants thousands of Cabbage Patch dolls, I know who has them,' he says. Prof Sparks could also lay his hands on large numbers of Ninja Turtles, a sorry casualty of a merchandising misjudgement.

Computerised information is the means by which excess dolls, turtles or anything else are not ordered from the supplier until a retailer is fairly sure there is the demand for them. He (or she) will have had rapid feedback from the stores through the hi-tech check-outs.

Customers may think their purchase is being handled by a smart till, but be unaware that the transaction is being examined for its relevance on several fronts - stock numbers and the location of the sale are basics. Sophisticated equipment and software can also summarise data for planning purposes, automatically order new stock, and even receive the suppliers' invoices by electronic data interchange.

Those outside the retailing arena might find it surprising that this sort of efficiency is not merely desirable, but tangibly valuable. But being able to shift goods around quickly, in response to demand, gives them a much better chance of selling.

Oasis, for example, has been able to conclude that its customers in Liverpool tend to be younger and more adventurous than in other cities, and therefore switch the appropriate clothes to the North-West. According to Peter Evans, director of administration, distribution and computing for the 42 nationwide branches, differences between specific cities can be dramatic. Four years ago the chain invested about pounds 300,000 on a system delivered by Applied Programming Techniques (APT) - a specialist supplier of retailing and merchandising systems. 'The main advantage is that we know all the stock levels and sales of every item in each branch every day, and can then calculate what replenishment stock to send. Therefore it enables us to ensure that we have a stock of everything we need in each branch. We manufacture most of our goods ourselves. When new stock comes in, a certain percentage is sent out immediately but we may then sell different items in different areas, certain colours might sell out, Christmas ranges might sell better in some stores. Our merchandising people will assess where they think it will sell best; the computer system will tell them if they are right.'

Mr Evans says no formal calculations have been done on the financial rewards of the investment in information technology, but he 'would imagine it paid for itself within a number of months'.

Application Programming Techniques has six modules in its APT- MART system, which cover everything from registering what has been sold to billing credit accounts. The sixth module, APT-CARD, also incorporates marketing principles to analyse buying patterns, so that it can target customers with promotional mail.

With an annual turnover of pounds 3m, it is one of the smaller companies specialising in retail systems. The UK software and services market in the retail sector was worth about pounds 830m in 1992, according to figures from the 1993 Holway Report, a review of the financial performance of UK computing services companies.

A small but significant chunk of this total was a contract worth more than pounds 100m, awarded last year by BhS to CSC Computer Sciences to take over its total IT functions for 11 years. This involved CSC acquiring all BhS's computer hardware, including the tills in its 137 stores, taking over BhS's data centre in the Arndale Centre in Luton and becoming the employer of 115 staff. CSC's marketing manager, Jerry Scott, says the company guaranteed BhS substantial savings.

BhS also took the 'revolutionary' step of giving its suppliers access to sales information so that they could respond quickly to low stock levels.

Nigel Pilkington, head of IT at BhS, says: 'BhS's investment in technology allows information to flow from the stores' point-of-sale computers via the central processor to the suppliers' own systems. Likewise, goods move from the suppliers through BhS's automated sortation system and back to its stores in as little as 48 hours, thus providing a fast response to customer demand.'

Prof Sparks says there are indirect benefits to customers of computerisation, even in ways as basic as finding a supermarket has not run out of tinned tomatoes because its scanning tills told its warehouse that stocks were needed.

Two companies are on the point of releasing the technology for scanning whole trolleys of supermarket shopping, but this is not necessarily a huge leap forward for the beleaguered shopper: 'The hassle of a check-out is with bagging the products. If your whole trolleyload is scanned and not put into bags, what have you gained?'

Shining more brightly on the horizon is the prospect of widespread 'loyalty' perks, such as discounts for regular customers, which new technology can implement on a grand scale.

(Photograph omitted)

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