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Friday, February 18, 2005

Technology - The Great Equalizer

Phil Lempert writes, technology can help the smart independent retailer play on the same field with the industry giants. Tom Zaucha, President and CEO of the National Grocers Association, says,technology is very much part of the business plan for the successful independent grocer. A lot of independents have pretty big stores. Maybe not compared to the Aholds, Safeways and Wal-Marts. That’s something that's changed significantly in the grocery industry over the past 10 years. A decade ago, companies that might have been considered large, are, by today’s standards, much smaller. But as a result, technology can become the great equalizer." By sharing information and pooling resources, today’s small- to mid-sized retailer can certainly compete in the technology marketplace. "There are opportunities for aggregation, for buying, for sharing of information among smaller companies, in terms of equipment and software," says Zaucha. "In a competitive sense technology will continue to become one of the great equalizers in the ability of this industry to maintain a diverse marketplace."
With the dizzying advances made by technology in the past few years alone, virtually every successful retailer initiative – technology included – will be consumer-driven, providing the shopper with more information, creating a more exciting shopping environment and a more efficient shopping experience. "In terms of comparative advantage,community-based supermarket companies already are very much consumer focused," and now with the various technologies and innovations available, there’s opportunity for those same companies to grow even closer to their customers.

Another key for making technology effective and affordable is for partnerships to be forged between mid-sized retailers and their distributors. Private label companies are also potential partners. "Ultimately, the retailer and wholesaler must learn to work more as a virtual chain. It’s important to take advantage of the synergies that exist between a group of retailers in conjunction with a distributor in doing things in a more efficient cost-effective manner." At checkout, more efficient payment systems are in the offing. Frequent shopper cards tied to checking accounts are one means of simultaneously speeding up the checkout process and holding down costs for the retailer. So are speed-pass units that are already being used by gas companies and some brick-and-mortar retailers. Technology also offers the retailer a means of providing more information to consumers. Kiosks are currently focused on recipes "but that will evolve into nutritional information. Access to flat-panel TV screens will mean a more efficient, convenient and effective means of communicating with the shopper interactively. There are companies beginning to look into shopping carts that download the shopping list, and alert customers when they pass products on their shopping list. They can also place orders to the deli counter or the bakery or the seafood counter and other specialty counters while they’re shopping." The receiving dock and back room are also prime areas for independent grocers to be able to upgrade their technology systems through partnerships with suppliers.

Some of the processes already in effect are category business planning, enhanced information from product movement, integrated accounting, integrated human resources and management information systems, synchronized data with trading partners, electronic billing, pharmacy systems, warehouse management systems, fresh-items management systems, and the list goes on.We are moving not just to a next generation, but probably to a new millennium in terms of gathering information through RFID as opposed to the old UPC bar codes. The fact that this technology allows you to read not only items, but also case loads and pallet loads, offers an incredible amount of new methods of doing business,the amount of data that is accessible on an RFID tag provides new methods of doing business. Everything from shrink to preventing out-of-stocks to a more efficient ordering system – all represent enhancements to our system of distribution today.

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"All views expressed are my personal views are not related in any way to my employer"