Taking stock of IT

Pro

Retailing is probably the most advanced commercial sector in the world in its use of information technology to woo and serve customers — and to constantly improve the distribution supply chain. That’s not to flatter our retail readers — it is just an acknowledged fact in the IT industry.

Fast Moving Consumer Goods and food retailing are at the top of the tree in consumer marketing and technology application. But perhaps it just applies to the likes of Walmart, Dunnes, Zara and Gap? Where do Ireland’s independent retailers come in the IT league?

To paraphrase a slogan from another field, ‘Much done, much yet to be done’ seems to be the general verdict. The vast majority of Irish retailers have moved to Electronic Point of Sale technology
(EPoS), at least to the extent of intelligent tills that capture more information than the money value of each transaction. They are also using a PC for their accounts, in most cases with the EPoS function linked to a stock control element in their accounts package.

‘Entry level for the smaller retailer these days is what we are inclined to call the “four box solution” — PC, screen, cash drawer and receipt printer,’ explains David Burke, retail specialist with Datapac of Enniscorthy and Dublin. ‘That combination acts both as an intelligent till and as a general business administration tool. Today, of course, it will include a smart and neat flat screen, a neat main unit that can perhaps be housed under a counter and both mouse and keyboard can be wireless to save clutter.’ A common variant also is to use a touch screen at the counter for simplicity and ease of use. At the same time, anyone doing administrative work like accounts can simply revert to a standard keyboard using the same screen.
 
Best sellers
Surprisingly, Ireland’s accountants are the best sellers of IT to smaller retailers, according to David Burke. ‘They are pointing out to their clients that they simply cannot continue with just a paper trail — and how expensive it can be to deal with.’ But in fact, he says,
almost all retailers already recognise the benefits of smart IT systems. The obstacles are the classic ones of budget, postponing the day of decision and, especially in family companies; some degree of difference in attitude between generations.

Since most retailers have some level of computerisation already in place, a common trigger point these days is when they are thinking of expanding the shop or range of goods, or perhaps opening another outlet. ‘It really is a big step forward for an owner-manager — your business going on out of sight without you,’ says Ray Ryan, managing director of Dublin retail systems specialists Advent. ‘Now stock control becomes really crucial since it is split over different locations and communications between locations, POS and accounts administration become a major issue.’

Simple dial-up or ISDN will enable all locations to keep a central system up-to-date (and vice versa) while broadband now offers many further advantages. The key point is that the business needs systems that will automate the exchange of information as far as possible, notifying for example, total day’s sales by department or flagging the need for stock re-ordering. Whether there are two locations or 20, management needs a central consolidated set of fresh business information for control and decision making. All the experts we spoke to stressed that retail IT is reliable, and easy to set up and use. They also insist, not too surprisingly, that even advanced systems are not expensive in relation to the costs they can save over time.

‘Systems do not replace decision making but they will prompt you with the correct information on which to make a decision,’ says Mark Reid of In-tech Ireland. ‘Re-ordering is a great example. You set your own trigger levels to flag a diminishing stock situation or
to suggest quantities. But you can decide when to accept or change the numbers because you have exact information on what has sold where and when.’

IT in action: Reaping the benefits
It’s all very well talking about technology in the retail sector but how are Ireland’s shop owners using IT? We spoke to a number of retailers from around the country to get the benefit of their experience.

Kennedy’s Spar: Convenience at your fingertips
After 35 years in the family business in Stepaside, Co Dublin, Des Kennedy believes the decision to join the Spar symbol group just over two years ago was the major leap in every sense. Kennedy’s is a well-known convenience store, providing a growing local population with all the essentials. ‘We are open seven days a week, from 7am to 10.30pm, so either our manager, Noeleen Davis, or myself are here most of the time, and we have about nine staff
as well, full-time and part-time. Joining Spar meant that we had to take a giant step forward from paper administration to two EPoS tills, and our accounts and back-office functions on a PC.’

The Kennedy Spar system and Epson PC tills were installed by Station Master, one of the recommended suppliers. The system includes a handheld barcode scanner for stock taking on the shelves, which uploads data to the system by infrared. Ordering from the Spar BWG warehouse is done by modem for the store’s weekly delivery, and sales/stock are automatically reconciled through the SmartPoS software, specifically designed for the Irish
retail grocery trade. Staff training is very easy, Kennedy says, because the touch screen and clear, simple layout is almost self-explanatory. As with so many other small retailers who have made the leap, Kennedy wonders how they could possibly cope with today’s range of business without smart systems. ‘Stock control, re-ordering, knowing quickly what your best sellers are — I suppose we all know the benefits of IT theoretically but when you see them in action daily you appreciate what they contribute to the business. You also realise how much easier life is! ‘

Byrne’s: Turning over a new IT leaf
There are now 11 Byrne’s shops in this successful chain of book and toy stores with a head office in Enniscorthy and branches in the South East and Midlands, including a flagship 20,000 sq ft World of Wonder superstore in Waterford. The family-owned group has grown over 26 years to become one of Ireland’s leading independent book and toy sellers through a policy of consistently investing in stores and staff. ‘We aim to be a leader in book, toys, stationery and multimedia retailing,’ says Jim Byrne, founder and owner of
Byrne’s Bookshop Group. Byrne’s brother Brian is also involved in the business. He is a trained engineer and applied his years of IT experience abroad to the needs of the evolving group, most recently in a complete IT review about 18 months ago. ‘We felt we were outgrowing our systems, mostly based on Take Five and its EPoS applications, and went to great pains to draw up specification for our needs across the business as well as elements we would like to have.’

The 100-page Byrne specification went to 18 companies here and abroad, drew 11 proposals and a shortlist of three. This professional approach elicited the fact that, at least from the Byrnes’ point of view, there simply was not a 100 per cent solution obtainable on
the market. ‘We stayed with Take Five, which actually gives us probably 80 per cent plus of what we need, with bespoke software for the additional management and control systems we wanted.’
Each of the Byrne shops has two to six PC tills, the Enniscorthy head office adds a further 12 PCs and four senior managers use laptops. ‘Perhaps our biggest tech step forward recently was getting all 11 sites on ADSL to replace the ISDN connections,’ says Brian
Byrne. ‘We actually saved nearly 50 per cent on our telecoms costs and the always-on connection means that we now have a private intranet between all locations, with all trading and stock information instantly available to our managers anywhere in the group.’

The company has also installed wireless access in all locations, so that managers using their laptops can work wherever they are with all of the information available to them as if back in their own offices. Upgrading to a higher speed ADSL connection is being considered to see if videoconferencing could replace, at least in part, the monthly management meeting which takes a full working day for many shop managers because of the travel involved.
Accepting that the company has a higher level of in-house IT expertise than most SMEs, Brian Byrne says: ‘Every business is different, expansion brings new challenges and problems and we have gone through our own learning curves. My advice to others is to be aware that IT always costs a lot more than the obvious investment in systems — time and effort getting things right, staff training, further investment that is needed to get the best from what you’ve already done and more. It is completely worth it, when the firm gets everything working properly, but there are certainly very few short cuts.’

Frank Clark: technology as a tool
Now being managed by the grandsons of the founding Frank Clark, this specialist tools business in Cork city is over 50 years old and thriving. ‘We sell powertools  and other tools,  as well as engineering and hardware supplies, to the construction industry, factories and
plants like the pharmachem industries around Cork, and to tradesmen and DIY customers who come into the shop,’ explains Frank McGowan. ‘We have agencies for a number of well known brands and are the Cork repair agents for Makita power tools.’

The company computerised its accounts some years ago but only moved on to its EPoS system towards the end of last year. It now has two touch screen EPoS tills in the shop and a further six office PCs on the network for accounts and administration. An earlier version of Sage was replaced by Line 50 with EPoS and stock control modules. ‘We really had no teething problems of any significance,’ says Frank McGowan, ‘Staff training on the new
touch screens went really well – even though some of our staff had never used any kind of computer before – and Advent, who supplied the screens, were really terrifically helpful. They are Dublin-based, but the system is set up to let them manage it remotely if there are problems or adjustments to be made.’

The only remaining issues that Frank Clark Ltd has concerns its extraordinarily wide range of products, something that will find sympathy amongst most busy retailers. Only 75 per cent or so of the stock items have been fully entered on the system, mostly using the suppliers’ codes. ‘We went from almost nothing to a super system in one go and this area really is a big task that has to be done inside the business. We are now about to move on to
do all of our purchasing through the system, so that will finally force us to find or create proper codes and descriptions for everything item by item,’ Frank McGowan says. 

Shoe Rack: Toes the Bottom Line
With concession shops in 30 stores and two outlets of its own in Dublin and Limerick, The Shoe Rack is the largest multiple independent retailer in Ireland. ‘We installed our first Top2Toe stock control system in 1992 and were impressed by its efficiency, its flexibility and at how easy it was to use,’ says Mark Buckley, managing director. ‘We started with a basic system and Datapac has helped us build it up from there over time.’ The Shoe Rack now has EPoS tills in all shops and a back office system that allows them to control all the information needed to streamline the business. For example, at any time The Shoe Rack carries 60,000 stock items (pairs of shoes) including all the size and colour variants, so
stock control used to be extremely difficult and time consuming.

With the Top2Toe system, a barcode for each stock item is generated in the Dublin HQ and sent to the factories in
Spain, Portugal, Italy, etc, which barcode the products at the production stage.’But it is not just stock control. Any information required is instantly accessible,’ says Buckley. ‘With a few clicks I can assess how the company is performing and pinpoint the
performance of any line, shop or supplier — or any combination of these. I can find out about stock levels in about ten seconds — how well a particular shoe is selling, what our top-selling lines are, what is the best-selling colour and so on. The bottom line is that the system is strategic to our business and it is hard to imagine how multiple outlets could be managed without smart technology like this.’

18/10/04

Read More: Hardware & Equipment