Point-of-Sale Priorities

Shoppers may enjoy browsing for the latest footwear trends, but they always expect a quick checkout experience. Eager to achieve this level, Payless ShoeSource Inc. has an aggressive point-of-sale (POS) rollout under way.

As retailers get their information technology priorities in place, POS is being placed at the top of many “To Do” lists. In fact, at presstime, POS shipments were up about 8% over 2005, according to IHL Consulting Group, Franklin, Tenn.

Payless ShoeSource is contributing to this increase. Eager to stand out in the competitive footwear category, Payless has revised its retailing strategy.

“Our vision is to democratize fashion and design of footwear and accessories. The chain is committed to delivering ontrend fashion and design at prices accessible for everyone,” said Cathy Curless, CIO for the Topeka, Kan.-based specialty family footwear retailer.

“We need to improve all operations to support this execution,” she added. “This includes using flawless technology.”

However, an aging POS system was stymieing efforts. Historically, the company relied on units that supported nonthermal printers, as well as other obsolete components.

“Maintenance costs associated with the system were also increasing,” Curless said. “Since available parts are becoming scarce, costs of parts were rising.”

The system also required Payless to house a PC in the back office of each store. The unit pulled data from individual registers each night. Data was then batched and sent to corpo rate over a data line.

The registers were also affecting the customer experience. Like clockwork, most sales occur at the chain’s 4,600 stores on the Saturday before Easter. However, their aging registers were only able to process 20 to 30 transactions an hour.

“If we seriously wanted to adopt our new strategy, we were in desperate need of changing our front-end technology,” she said.

Payless wanted a system it could integrate into a scalable back-office platform. The new system also had to support the chain’s move away from dial-up and into the world of broadband. By combining these strategies, the chain knew it could eliminate its back-office PCs and use its broadband connection to filter transaction data into a central repository at corporate.

In 2003, the footwear retailer chose PC-based TeamPoS2000 POS terminals, a thermal printer and Windows based Global STORE retail software platform, all provided by Fujitsu Transaction Solutions, Frisco, Texas. Since the software is open architecture, it supports easy customization and maintenance—another prerequisite for the promotional retailer.

“We invented the ‘BOGO’ [Buy One, Get One] promotion,” Curless explained. “We knew this functionality would strongly support our creative promotions at the front end.”

The chain opted to roll out its largest-volume stores first. Smaller, regional stores were added to the mix on a seasonal basis. Depending on store size, each location added between one and four units.

After 18 months, Payless happily reported higher throughput. “We had been through two Easters and a back-toschool season,” Curless said. “During each peak season, each register processed 75 to 80 transactions per hour.”

By leveraging broadband, the solution also helped the chain cut approvals on debit- and credit-card transactions to less than a minute.

A new product introduction pushed Payless to embark on the second phase of its rollout. In January 2006, the vendor introduced the TeamPoS 3000 series, and Payless quickly began upgrading stores to the new system.

To date, stores across Puerto Rico and Quebec are successfully running the new system. By the end of 2007, Payless’ remaining U.S.- and Canada based stores will use the system as well.

Inking a Deal

Unlike traditional merchants, Cartridge World has a unique model. The ink-refill retailer has built its organization around selling, refining and refilling ink cartridges for office equipment.

Unlike most traditional retailers however, Cartridge World stores each operate “a mini manufacturing facility that collects and processes raw materials,” explained Shawn Lynam, VP, franchise operations for the Emeryville, Calif.-based company that operates 1,400 franchised retail locations in 42 countries.

“This requires our stores to carry different inventory, manage various categories and track work in progress,” he said. “This makes our front-end requirements much more complex as well.”

These complexities increased when the chain began expanding its breadth. With a foundation in Australia and Great Britain, the retailer was ready to make a home in the United States. And by July 2004, the chain began an aggressive rollout schedule.

“We are still opening one store a day, and this momentum will continue throughout 2007,” Lynam explained.

While the chain started its domestic rollout with a reliable point-of-sale solution, “We knew we would eventually look for a POS system that would help our new stores sustain our existing services and support new ones coming along.”

The growing chain chose Retail Pro POS software (from Island Pacific, Irvine, Calif.), which runs on RealPOS 70 terminals from Atlanta-based NCR. The units, which are equipped with Intel Pentium 4 processors, also feature NCR RealScan 37 handheld barcode scanners. Duncan & Associates, an NCR reseller based in Oakland, Calif., is managing the equipment and rollout.

Approximately 275 of the chain’s 500 domestic stores are using the system, and all new stores continue to add the solution. “While we are opening all new stores with the new combination, we do not require existing stores to add the solution, ” Lynam said.

However, existing franchisees are constantly asking for upgrades. “The average age of an existing store system is approximately 1.2 years old. Yet, our franchisees are asking if they can invest in this new technology,” he said.

An upgrade can cost a franchisee between $3,000 and $5,000, “but they are justifying the cost based on the information and functionality the system provides,” Lynam explained. “That speaks volumes about the system’s overall value.”