STORES Magazine - September 2008 - (Page 34)

EXECUTIVE SUITE / RFID Like a box of Legos The chain concluded that logistics was not a core competency and outsourced physical distribution of books to Centraal Boekhuis in the Netherlands, which began handling 80 to 90 percent of Selexyz stores’ inventory. “We then started looking at our increasingly complex back-office operations,” Vink says. “We didn’t have enough specialized knowledge and we would have had to invest a lot of money to build up expertise. Additionally, we weren’t focusing on how to achieve integration between the Internet business and our stores.” Selexyz implemented the Sonic ESB program in 2003 as a long-term solution to standardized messaging. “There was no difficulty in connecting it to our back-office database or our legacy systems,” Vink says. “SOA is like a box of Legos. Every time you check the services you have in place you are able to reuse it and connect to a new module. That’s how we have been able to build our infrastructure in Holland.” As Vink sees it, a tightly integrated warehouse-to-consumer supply chain begins at the distributor level, where RFID tags with individual serial numbers are attached to each book. As shipments arrive at the stores, cartons pass through RFID tunnels, where readers scan the tags and immediately update store inventory. “Previously, our staff had to take the time to check each box in manually for inventory updates,” Vink says. SOA-enabled RFID applications have “cut the process to seconds while reducing errors and dramatically improving the management of our supply chain.” In-store search kiosks As the name implies, an important function of service-oriented architecture is improving customer service, or the in-store experience. Toward that end, customers can use kiosks to scan a store’s inventory. “RFID enables customers to find out exactly where a book can be found, even if it has been misplaced,” Vink says. Greater access to information means that searching for titles is a less labor-intensive process for customers and the chain’s 730 employees. According to Selexyz’s calculations, the use of SOA-related applications “could reduce [store personnel] by 20 percent,” he says. “Imagine that over 42 stores. “But we want to achieve growth in the business. So, it’s a matter of using people’s knowledge in a more effective way by 34 STORES / SEPTEMBER 2008 moving them away from routine procedures and giving them more time to communicate with customers in the store and on the Internet,” Vink says. The latter point will be particularly important in gaining business from younger consumers. “You have to invest in your IT infrastructure and your service-oriented architecture environment because these customers don’t want to Service-oriented communicate with local staff,” he says. architecture is “They know exactly what’s available and improving both what they want to buy. Our primary task customer service is not only to sell books but also to proand the in-store vide as much information as possible.” experience. Gathering information via RFID tags is the crux of the system. “We are now able, with twice-a-week scanning, to upgrade the stock reliability of each store to approximately 97 percent,” Vink says. In traditional stores that use bar-coding, the figure was closer to 70 percent, he says. “So, through SOA we are able to provide customers with an ordering service because we know immediately what titles are not in the store.” Moreover, while doing a search an associate can check a customer’s purchasing history and suggest titles he may be interested in. Mobile phone payments BGN was scheduled to launch a service that enables customers to pay for books via mobile phones by the end of this month. “That’s when we will close the whole cycle, from searching for and collecting specific books to paying for them,” Vink says. “And it may not stop there.” The systems could allow Selexyz to do for books what Apple has done for music — provide the first chapter for a nominal fee and, if customers like it, enable them to order the entire book and either pick it up in store or download it. Vandervoort concedes that analytics achieved through data warehousing and business intelligence won’t disappear any time soon, “but they are being complemented by real-time analytics, not only for track-and-trace functions, but also up-tothe-second information on revenues, depletion and whether emergency restocking is needed. “If a retailer has to wait until tomorrow to find out that the depletion rate is faster than predicted and emergency reorderStORES ing is needed, it may be too late,” he says. Len Lewis is a veteran retail industry journalist and commentator and the editorial director of Lewis Communications. WWW.STORES.ORG http://WWW.STORES.ORG

Table of Contents Feed for the Digital Edition of STORES Magazine - September 2008

STORES Magazine - September 2008 Contents Executive Editor's Page President's Page Office Depot Unveils First Green Store Dunkin’ Donuts Debuts DDSMART What Shoppers Think 10 Things You May Have Missed Numbers Worth Counting Full Price/Markdown Retail People Are You a Facebook Fan? RFID Concept2Watch E-commerce Supply Chain Marketing ERP Credit Web Optimization LP Vantage Point Newsbeat Cover Story LP Program Building Biometrics Industry Perspective Customer Service Site Selection E-Commerce LOEB Retail Letter Arts Update Point of View NRF News Retail Crossword Retail Industry Calendar Last Laugh

STORES Magazine - September 2008

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