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01/01/2006

2006 Influentials

Editor's Note: Catch the most recent Influentials list here!

While every senior retail executive wields power within his or her company, a select few exert broad influence by driving lasting and differentiating change in the retail industry as a whole. Following a remarkably innovative year in retail IT, RIS News is proud to recognize 10 retail executives who are spearheading innovation inside the four walls of their companies and beyond.

This year's Influentials continually take advantage of emerging technologies that enable their companies to meet quantifiable goals. They also are change agents who smoothly adapt business processes necessary to optimize the use of new technologies.

These 10 leaders are changing the rules of the game and calling the shots to lead the industry into a new era of open standards, business automation and on-demand computing. They are innovative leaders and visionaries behind fast-rising companies, both large and small, who are adept at negotiating the challenges of the fiercely competitive retail technology playing field.

Together, the profiles of the 10 Influentials tell a story of people and advances that drive the industry and offer insight into what to expect in 2006 and beyond.

2006 Influentials 

Harry Roberts, senior vice president and CIO, oversees all IT, communications, networking and related areas for Boscov's Department Store. The IT strategy at the merchant-driven company revolves around supporting the lowest TCO possible, according to Roberts.

"We continue to take advantage of emerging technologies that can provide quantifiable benefits to our business, where they make sense," he says. "We believe that technologies like Voice Over IP (VoIP) are areas with potential impact on several areas of our communications infrastructure." The retailer isn't "diving in," but has piloted VoIP technology and is looking at some tactical as well as strategic areas in which to make investments in 2006 and beyond.

The company also is reviewing other areas of its core technology that historically have been mainframe-centric, for possible migration to open source. "In the past open source had been primarily associated with client/server based applications, but with new tools becoming available, there are opportunities to migrate many of our COBOL (Common Business Oriented Language) legacy applications that will position us to take advantage of a multitude of operating systems, hardware platforms and processes," says Roberts. "Open source is about freedom to go where we want to go and not being locked in."

Roberts has headed two particularly important projects this year. The first is the implementation of SofTechnics' suite of applications that help the retailer take advantage of its 2.4Ghz RF infrastructure.

The suite enables a number of store inventory-related transactions, including physical inventory and price verification. It also forms a baseline infrastructure to expand into additional functionality in 2006 and beyond. The second area of importance is a continuation of the retailer's commitment to open source and Linux, notes Roberts. "We continue to move more workload onto our enterprise server from other Intel server-centric areas. Both of these initiatives provide a strong foundation for continuing exploitation of these important technologies which carry strong benefits to our business."

Boscov's Department Store
Headquarters: Reading, PA
Number of stores: 40
Gross Revenue: $1.05 billion
Vertical: Department stores

"FedEx Kinko's IT strategy is customer-focused, and accordingly, our team is positioned to quickly respond to the changing needs of our customers," says Laurie Zeitlin, senior vice president and CIO of FedEx Kinko's. "We leverage strong cross-functional relationships to promote clear alignment with business priorities, which allows us to expedite the complete development cycle from requirements definition to deployment. In addition, we place emphasis on speed and agility, so we can effectively design and deliver innovative technology solutions that enable our business strategies and protect our competitive position."

The company's most significant IT project in 2005 was the implementation of Order to Pay, which included more than 10 major applications and 70 interfaces to legacy systems, and enables centralized management of items, prices and taxation.

The project resulted in a comprehensive solution that automates and integrates numerous store-based and enterprise processes such as order entry, POS, production management and back office retail processing. With Order to Pay, the company introduced a centralized customer repository and replaced and upgraded software and hardware.

"The rollout of Order to Pay to more than 1,300 U.S. retail locations helps FedEx Kinko's in our goal to make every customer experience outstanding, leading to positive business results for our shareholders," says Zeitlin.

Order to Pay tracks and manages projects from the minute customers place an order to the moment they pay for it. Benefits include faster and easier ordering and checkout, improved order tracking and enhanced order production.

FedEx Kinko's
Headquarters: Dallas, TX
Number of stores: More than 1,500
Gross Revenue: $1.87 billion
Vertical: Copy centers & online printing services

The IT strategy at Smart & Final has been to integrate all systems via a publish/subscribe architecture, according to Zeke Duge, SVP and CIO for the retailer. "By using an XML standard and only doing translation in middleware, we have freed our applications to treat all corporate data as their own, when in reality the corporate data are contained in single points of truth."

This eliminates concurrency issues, restrictive ownership issues and silos from the retailer's operations, making data and systems reusable and extensible, notes Duge. "This translates into cost-effective use of our resources."

The retailer currently is focusing efforts on integrating systems so that all business units and disciplines throughout the company can seamlessly view, share and act upon the information that is critical to their success. "We are in our third and fourth warehouse installations of Aldata's Gold software, giving our associates unprecedented visibility throughout our supply chain," says Duge.

Smart & Final also has initiated a system whereby vendors can obtain sell-through information by item and by store in real-time. These programs are part of the company's effort to enable all corporate data to be accessible regardless of its origin.

"We believe that these efforts are essential to the growth of the business," says Duge. "Information can no longer be treated as an exclusive asset. It must be made available across the enterprise and beyond, in whatever format is required and with minimal effort. If you can't do this, you have artificially handicapped your company and its ability to compete."

Smart & Final:
Headquarters: Commerce, CA
Number of stores: More than 240
Gross Revenue: $1.96 billion
Vertical: Warehouse clubs & superstores

Clark Linstone, CFO for Lamps Plus, helps maintain a flexible overall IT strategy that works closely with the goals of the company. Proper use of technology has enabled Lamps Plus to enhance the customer experience in-store and on the Web, reduce costs through more highly integrated and better solutions and to grow rapidly without significant increase in personnel, notes Linstone.

"Top management is technology knowledgeable and this enables the rapid acquisition and implementation of beneficial new technologies," he says. "Lamps Plus has been able to develop or deploy technology faster in many areas than companies many times its size."

In the past year, the retailer implemented several new IT projects including a completely paperless supply chain initiative, deployment of a multi-shipper order fulfillment program and development of an integrated public Web and kiosk system. The supply chain project included both domestic and international vendors. "We worked closely with outsourced solution providers to develop robust solutions that would work with all sizes of vendors," says Linstone. "Lamps Plus was able to help pioneer a solution for our overseas vendors which also grants us complete visibility to our foreign vendor supply chain." Foreign vendors download purchase orders, produce or order product tickets, scan product as it goes on a container, produce an ASN and invoice through the system. This information is coupled with data from the retailer's shipping companies and custom house broker to provide door-to-door international supply chain visibility.

"Lamps Plus truly works with vendors as business partners," says Linstone. "We have never implemented a chargeback system to force compliance, and as a result, often receive favorable treatment from vendors." The supply chain initiative has enabled the retailer to grow without increasing head count while improving accuracy and visibility in the process. Reduction in stock outs also was a result. The enhancements to its Web site and kiosks have improved the customer experience and increased revenue.

The retailer is in pilot for a new POS system which will be rolled out starting in the first quarter of 2006. In addition, a new WMS system will be evaluated for implementation in late 2006. "Lamps Plus will continue to aggressively utilize technology to enhance all aspects of our business," says Linstone.

Lamps plus
Headquarters: Chatsworth, CA
Number of stores: More Than 40
Gross Revenue: Private
Vertical: Home furnishings and housewares

The technical strategy and business initiatives that make up the overall IT strategy for Giorgio Armani are developed in conjunction with the business goals and the sales performance, according to Vicki Cantrell, CIO for the high-end apparel retailer. "Developing fantastic customer relationships by providing the stores with the enabling technologies, and protecting the customer and business data are top priorities," she says. "Our IT strategy is a success because we have co-developed our customer focused business strategies with the other areas of the company. This means we have a cohesive message and goal."

This year, Cantrell headed the implementation of a worldwide POS implementation. "We set the goal to have a common system, which is rare for POS, and through all the changes and challenges we were able to achieve the original goal of one code base," she says. The company also implemented a common product schema and codification that is used worldwide, beginning at the point of design, and continuing throughout the supply chain to the point of sale.

"There are many benefits to be derived from common systems and store-focused technologies," says Cantrell. "The associates have the information they need to facilitate serving the customer in the way that the customer wants. And having better visibility of where the product is, and the increase of speed to floor has a positive impact on sales. By implementing a strong framework on which to build, future enhancements and the flexibility to react to changing business conditions is, and will remain, an important strategy for us."

Giorgio Armani
Headquarters: New York, NY
Number of stores: Nearly 340
Gross Revenue: $300 Million
Vertical: Apparel

"IT strategy is a core part of our business strategy," says Dave Finnegan, director of Inbearmation at Build-A-Bear. This year the retailer completed a rollout of a new integrated POS system from NSB. The system allows for a new level of operational efficiency, according to Finnegan. It enables the retailer to integrate credit, debit and gift cards and has reduced transaction costs. The system also allows Build-A-Bear to seamlessly integrate its party scheduling system into the POS.

As the company creed states: At Build-A-Bear Workshop, technology is a competitive advantage. Our information systems are intuitive, easy to operate and dependable. Our information systems enable us to know our guests' wants and needs, making our products available in ever expanding avenues, via the World Wide-Web, the telephone, direct mail, and by assuring that the right products will be in the right store at the right time. "Technology is part of our culture," says Finnegan. "It will continue to play a key role in our future success."

Build-a-bear workshop
Headquarters: St. Louis, MO
Number of stores: More than 200
Gross revenue: $302 million
Vertical: Toys & games

Bob Bersani, global standards officer, and his team at Ahold USA make data synchronization a top priority. The IT department's mission is to create and retool existing processes in a way that both improves efficiency and prepares the company for future technology opportunities. Creating and following global data synchronization standards is the first step in this process. "We are implementing global standards based on how we operate the company," says Bob Bersani, global standards officer for Ahold USA. "However, as we move to a global organization, the fact that what we're implementing is based on a global road map and based on global standards should dovetail into a global application."

In addition to becoming more involved with the Global Data Synchronization Network (GDSN), the retailer also combined the U.S.

and Dutch operations into one global organization. It has now expanded that organization by recruiting additional staff to help integrate education, engagement and enrollment processes of GDSN into the enterprise. "When GDSN reaches its critical mass, there's a big opportunity to remove a lot of cost out of the supply chain," says Bersani.

To help further its course within the company, the Ahold tech team became involved in an initiative entitled Project Jury. The program was started by the Global Commerce Institute (GCI) to renew the business case for GDS using examples of actual benefits achieved from GDS implementation programs. The scope is to publish cases with tangible results on the basis of the GCI GDS Key Performance Indicator (KPI) model.

The steps Ahold has taken so far are viewed as groundwork. Initiatives such as RFID, where accurate, clean data is a prerequisite at the case and pallet level, will benefit from the work being done now. "Our strategy for RFID is to be a fast follower versus an early adopter," says Bersani. "There are a lot of initiatives that are out there, and EPC is certainly leading the way. They are flushing out the issues that need to be resolved in order for us to implement it."

Royal Ahold
Headquarters: The Netherlands
Number of stores: 4,500
Gross Revenue: $70.44 billion
Vertical: Grocery

"Bloomingdale's is first and foremost a merchandising company," says Bruce Berman, executive vice president. "Our ultimate success will be satisfying the customers' wants and needs by providing them with the merchandise they desire in an environment they like with the level of professional service they expect."

To that end, Bloomingdale's installed ProfitLogic's pricing software to provide guidance to its merchants for product markdown pricing and timing. This was the second phase of a company wide installation, begun in September 2003 and finally completed in mid-2005.

"Our IT projects are geared to helping the merchant organization make better informed decisions with specific regard to pricing and the timing of price reductions," says Berman. "We believe the software has helped us achieve our strong financial results, but the software alone is not responsible for our success."

Berman and his team look to support the merchant organization's decision-making process by providing insightful information in an easily digestible format. "As our business becomes more complex, it is easy to overload people with data that needs to be deciphered into meaningful information," notes Berman. "We need to provide a common, best way to view that information while supporting the needs of all of our merchants. The more we can integrate this information and feedback into all of our merchant applications, the more successful and efficient we will become."

Bloomingdale's
Headquarters: New York, NY
Number of stores: 35
Gross revenue: $1.75 billion
Vertical: Department Store IT systems are at the core of several strategies in areas of the company ranging from supply chain to marketing, according to Brian Devine, Chairman, Petco. "The company's IT systems enable us to ensure the products our customers want are readily available in stores, just as they provide us with tools to communicate directly with those customers using our P.A.L.S. loyalty card program," he says. The logistics-driven nature of the business requires the retailer to constantly invest in IT, notes Devine. "To have great systems is a competitive advantage that leads to higher inventory turns and optimal pricing, which directly enhances capital efficiency and profitability," he says.

Petco's proprietary systems enable managers to monitor merchandising trends and customer behavior in real-time, and share this information with vendor partners. The specialty retailer is constantly evaluating advances in technologies and processes to further improve overall performance, according to Devine. "As I see it, you really want to be at the cutting edge and not the bleeding edge," he says. "For example, with RFID there is still a lot to learn in terms of the best applications of this new technology, and we will probably not be the ones testing everything. The important thing to keep in mind is that for all technological advances, you have to be creative and think about how to leverage them in a way that enhances your particular business."

PETCO
Headquarters: San Diego, CA
Number of stores: 715
Gross Revenue: $1.8 billion
Vertical: Pet products

The Bargain! Shop is a general merchandise retailer which serves consumers in small communities and neighborhoods throughout Canada. "We believe we are operating in a largely untapped niche in the Canadian marketplace," says Clinton Wolff, vice president and CFO for Bargain! Shop Holdings. "Our improved systems and balance sheet have allowed us to boldly grow our business, both in terms of store count and comp store performance."

Technology investments over the past five years have contributed dramatically to the retailer's growth, according to Wolff. "First, POS and merchandise management systems allowed us to collect the data needed to start better understanding and managing our stores," he says. "Auto-replenishment took a number of mundane, error-prone manual tasks out of our stores and allowed us to dramatically reduce out-of-stocks. Then, the implementation of business intelligence took our analysis and allocation to a whole new level."

Wolff carries the CIO role in addition to his CFO responsibilities. "I see the IT role growing out of the shadow of finance in our organization in the coming years as we continue to enhance all our systems and have IT involved in all aspects of our business," he says. The retailer has a small executive team and the company works to facilitate a collaborative environment. "Our CEO sets the tone," explains Wolff, "ensuring that we have a culture that promotes the executive team being on the same page and that this message is filtered through the organization."

The bargain! shop holdings
Headquarters: Mississauga ON
Number of stores: Nearly 150
Gross revenue: $126 million
Vertical: General merchandise