Retailers are looking to satellite technology to make the most of point-of-sale data and go on line with a host of new programs.
Although rapid transmission of data for basic debit and credit card transactions drew many retailers to satellite systems to begin with, it is the prospect of advanced applications such as video broadcast and frequent-shopper programs that is hooking them now.
Ask Kroger Co., Cincinnati, which has nearly completed its 1,100-site rollout of satellite technology, and you'll hear about plans for computer-assisted ordering and time-and-attendance scheduling.
Ask Hannaford Bros., Scarborough, Maine, and you'll learn that a pharmacy adjudication program to centralize communications at its 95 stores is in the works.
Ask Giant Eagle, Pittsburgh, and you'll find out that video broadcasts for staff training and communications could soon become a reality at the 126-store chain.
"We have our own [privately owned] hub," said Russ Ross, director of information systems at Giant Eagle. "We are using it for all data communications back and forth between the stores and corporate headquarters."
Since rolling out the technology to all its stores last summer, Giant Eagle has begun communicating price changes, pharmacy adjudication and direct-store-delivery updates by satellite. "We're also pulling back movement and scanning data across the network," he said.
When asked to single out a key benefit from switching to a satellite system, however, Giant Eagle gives the nod to electronic funds transfer: "We're providing a service to the customer that we didn't provide before," Ross said.
Looking ahead, Giant Eagle may also delve into video broadcast communications.
Video broadcast also was cited as a compelling prospect at Hannaford Bros., even though no concrete plans are yet in place for introducing such a system, said Al Carville, vice president of information systems. "We're going to continue to look at our data applications and our intent is that all data applications will be going via satellite."
The chain is now transmitting point-of-sale and scan data, electronic debit and credit card transactions, and electronic mail through a shared hub that is owned and managed by Scientific-Atlanta, the Atlanta-based network provider.
The drive to share data within the retail operation and beyond to suppliers is becoming increasingly important, retailers agree, as the industry becomes more conversant with Efficient Consumer Response initiatives. Programs such as continuous replenishment and category management cannot be launched successfully without the ability to gather, share and interpret data.
"The retailer, the manufacturer, the wholesaler and the food broker are recognizing that information, not data, is truly used as a competitive advantage," said Mike Gorshe, executive director of food industry programs at Andersen Consulting, Chicago.
"If we look at those six best practices applications of ECR, they all deal with using point-of-sale to drive the business and with being able to share information from one location to the next," added Gorshe, who formerly was corporate director of store operations services at Kroger.
Kroger, which is nearly finished linking its stores to headquarters by satellite, now also is beginning to hook up with manufacturing plants to streamline the ordering process, said Paul Bernish, corporate director of public relations.
"As manufacturers and retailers begin forming cooperative partnerships to lower their respective costs, technology [like satellite communications] is providing the glue to enable those partnerships to work effectively in areas like inventory ordering and just-in-time delivery," Bernish said.
Kroger currently is replacing older store computers with new processors that can handle more data than ever before. Like most retailers using satellite communications, Kroger is transmitting more data today than when their systems were first brought on-line.
"The whole benefit of a satellite network vs. a land-line network is the amount of data that can be transmitted," explained Joe Lacko, vice president of information service at Pathmark Stores, Woodbridge, N.J. Pathmark uses satellite communications in most of its 147 stores. However, terrestrial systems are in place at those stores whose proximity and local telephone tariff rates make a land-based network more economical.
Megafoods Stores, Mesa, Ariz., which recently entered the satellite arena, said 70 stores will be fully linked this summer to a Los Angeles satellite hub owned by Hughes Network Systems, Germantown, Md.
The 50 stores now on line are rapidly exchanging pricing and product movement data with headquarters, and electronic funds transfer transactions are running more smoothly than they had on the land-based network, said Bob Stratton, management information systems director.
Supervalu, Minneapolis, has stepped up its involvement in a satellite communications system through WinCom Systems, a new Supervalu company charged with marketing the technology to retailers. Robert Marshall, president of WinCom Systems, said about 100 locations are now on line with a hub in Minneapolis. By the end of the year, he said, 200 stores are expected to be using satellite communications.