2008 Influentials

In every retail company, there are people who monitor everyday details and those who plot big picture strategies. Then, there is the person who heads up a chain's IT operations. He or she must be involved with all of these things at once. The CIO is a direct contributor to a company's bottom line. His or her role touches every employee and every aspect of business. On a daily basis, the head IT officer must know how much inventory each store needs today, when the shipment from Bangladesh will arrive and why the telephones in the Portland store are not working.

 

Long term, this executive is instrumental in turning visions into reality. He or she must understand the CEO's five-year vision and growth plan so that POS systems, replenishment and offshore sourcing software can accommodate changes. The CIO also is responsible for making sure technologies interface well. Otherwise, a company is in for logistical nightmares and, ultimately, consumer and shareholder disappointment.

 

RIS' annual Influentials celebrates the 10 retail IT executives who have this type of vision. Astute about details, they also see the big picture. And they have implemented products and processes that will have a dramatic impact on future success.

These 10 executives were chosen by key technology vendors as part of an RISe-mail poll sent to 1,600 recipients. They come from supermarkets and warehouse clubs, as well as specialty apparel chains and craft chains. They include regional companies and worldwide powerhouses.

DAVE MCNALLY
Global CIO, Royal Ahold

HEADQUARTERS: Amersterdam, The Netherlands
NUMBER OF STORES: 746 in United States
SALES: $16.4 billion from U.S. operations
VERTICAL: Grocery

Dave McNally is a man split between continents. As global CIO of Royal Ahold, he directly manages IT programs for the company's three U.S. grocery brands: Stop and Shop, Giant Landover and Giant Carlisle. He also oversees the online Peapod business, as well as corporate systems and strategies in the U.S. and in Europe. After joining the company as interim CIO of Ahold's recently divested U.S. foodservice business in 2003, he was named global CIO in 2005. He spent two years at Ahold's headquarters in Amsterdam. He then moved back to the U.S. to concentrate on revamping domestic infrastructure.

 

"Two years ago, we started developing a global strategy that made sense for each of our operating companies," says McNally.We've been able to create an enterprise retail systems program. I am proud of the upfront work and of the ability to partner with the U.S. business and really help them to understand how IT can enable their business transformation."

 

The key to success is contingent upon having integrated retail systems that can bridge gaps and deliver the right information at the right time. "The real value of the integration is around the speed and efficiency of new product adoption and delivery to market," McNally says. "We need to be able to procure, promote and deliver to our supply chain in the most efficient manner possible."

McNally considers himself a businessperson who knows a lot about technology. "I spend much more time on the business side than I do on technology," he says.

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HEADQUARTERS: Abilene, KS
NUMBER OF STORES: 256
SALES: $475.3 million
VERTICAL: Regional Discounter

Tony Corradi began working with Duckwall/ALCO as an IT consultant in 2001. He officially joined the regional discounter as vice president and chief technology officer in June 2005. Since then, Corradi and his team have completely overhauled headquarters and in-store technology.

"Thanks to a terrific internal team, a lot of hard work and tremendous support from our vendor partners, we successfully completed a major IT initiative earlier this year that was launched in December 2005," says Corradi. "We replenished all stores' hardware, established a Wide Area Network for 200 stores and implemented an Oracle payroll system in less than six months. In addition, we outsourced hosting and DBA support for 50 percent of our mission critical systems."

 

Already, the retailer is benefiting from having real-time merchandising information. "As a result, we are providing customers with a better in-store experience," He boasts that the project was completed on time and on budget.

 

Corradi believes that business requirements must determine technology's role in an organization, not the other way around. "You must have senior executives participate in all phases of every IT initiative.That way, they 'get it' and they own it," he says.

 

His team's next project involves moving stores and headquarters to the company's new portal and dashboard technology."We are really leveraging the investment we made over the past two years with our major IT initiative."

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HEADQUARTERS: New Albany, OH
NUMBER OF STORES: 1,000
SALES: $3.3 billion
VERTICAL: Apparel

Abercrombie & Fitch's IT team is forward-thinking. When she joined the company 1.5 years ago, Blum took a proactive stance. "I am most proud of the entire IT Team," says Blum, "and how we have been able to switch gears from a reactive to proactive mode in a very short time. We have a tremendous amount of work going on right now. Everyone is working incredibly hard to ensure that all of our initiatives are successful. These initiatives are critical to our company's future growth and success."

Blum and her team took on the task of overhauling the retail merchandising system, including the core infrastructure, merchandise hierarchy, organizational hierarchy, master data and purchase order functionality, which should go live later this year. Phase two includes perpetual inventory, sales audit, stock ledger and price management (scheduled to go live in 2009).

Part of Blum's success is driven by her philosophy of viewing IT as a team sport. "We are a team, period," she contends. "None of us is ever as valuable as all of us; IT requires everyone on the team to accomplish the goals we have."

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HEADQUARTERS: Natick, MA
NUMBER OF STORES: 176
SALES: $8.48 billion
VERTICAL: Warehouse Club

BJ's Wholesale Club is the smallest retailer that inhabits the club store vertical. But it does not think small when it comes to IT. John Polizzi and his nimble staff have put BJ's way ahead of competitors in key areas like checkout. "We are the leader in the club segment in the implementation of self-checkout," says Polizzi.

 

In the two years that Polizzi has been at the technological helm, BJ's has launched a Web site and radically changed the operational direction of the online business. "We realized that, in order to be more effective for Cyber Monday, we had to establish our own fulfillment center. We put together a fulfillment center of BJ's products, as opposed to drop shipping vendors' products, in one of our distribution centers within just four weeks. Then, we integrated it with the Web site," says Polizzi. "It was a phenomenal effort."

 

BJ's also was one of the first retailers to change systems and processes for PCI compliance. While most retailers were still scratching the surface on what the new PCI compliance means, Polizzi and his team (which included Susan Bates) quickly became experts on PCI data security standards. They drove a cross-functional effort to find gaps, put together a remediation plan and oversaw execution of a multiple team plan. The team's efforts towards PCI compliance spanned a variety of complex areas within and outside IT. This included developing a new information security policy, changing age-old processes and migrating to secure systems. This program had many new product initiatives such as a PCI compliant wireless LAN infrastructure and data encryption.

HEADQUARTERS: Chicago
NUMBER OF STORES: N/A
SALES: $8.9 million
VERTICAL: Online

In the little more than two years she has spent with Playboy Enterprises, Danielle Savin has successfully launched new e-commerce platforms for two Playboy web sites: www.shopthebunny.com, which targets a more feminine demographic, and the company's flagship site, www.playboystore.com. She has overseen double-digit growth, and changed out and upgraded all technology platforms.

Savin, who manages merchandising, marketing, operations and technology, believes that thinking about the future is key to competing online. "If a company is not constantly investing in technology and does not have a vision for what its platform should look like in five years, they have already lost the race with competitors," she says. "You need to be better than your customer expects you to be. An IT organization that is built around customer needs shares the mission and vision of the organization from top to bottom."

Currently, Savin and her team are working on integrating Playboy sites with Paypal and optimized payment authorization. They also are re-examining the check-out experience and working on the integration of a new call and fulfillment center.

HEADQUARTERS: Los Angeles
NUMBER OF STORES: 16
SALES: $200 million
VERTICAL: Entertainment

Robert Fort embraces change. And constant change is the driving force behind Virgin Megastores. The specialty retailer carries an ever-shifting inventory of music, movies and video games" CDs to mp3s, DVDs to Blu Ray discs and PlayStation/X-Box/Wii games.

In the four years since he joined Virgin, Fort has implemented a real-time data warehouse. "This provides real-time telemetry back to stores so they know what their conversion rate is compared to the same day last week or last year. They can obtain all the statistics that can be used at an in-store level. That way, they better understand how to get the most out of inventory." Sales increased by $8 million during the first 18 weeks after going live. Fort paid back his investment with just 20 percent of the gross margin increases.

 

Fort also oversaw implementation of a VioP platform at all stores. He says this is saving approximately $700,000 annually. The new system features the convergence of voice and data traffic onto one IP network. Fort also is using the company's new WAN to deliver digital content to in-store kiosks and multimedia content to store displays.

 

Currently, Fort and his team are looking at using the VoiP platform to implement a unified communication strategy. "We've been working with Microsoft to implement Office Communications Server. This will allow anyone to look at their computer screen and know the location of people they work most closely with. It acts somewhat like an Instant Messenger program. But they would be able to tell that people are in meetings or on the phone. They can send an IM or begin a phone or video call with one click. All on a drag and drop basis."

HEADQUARTERS: Dusseldorf, Germany
NUMBER OF STORES: 2,400+
SALES: 59.90 billion (Euro)
VERTICAL: Grocery

With more than 2,400 retail businesses in over 30 countries, Dr. Gerd Wolfram is tasked with providing advanced technologies, IT strategy and procurement to Metro's retail sales brands.

Earlier this year, Dr. Wolfram spearheaded the 200-facility rollout of an RFID deployment for Metro's Cash & Carry supermarkets, Real hypermarkets and multiple distribution centers. It is Europe's largest RFID rollout. Designed to enhance the company's distribution and store receiving processes, it uses accurately located tag data for more efficient operations and improved inventory management. "We are moving RFID out of the innovation labs and into working retail stores," says Dr.Wolfram.

 

Dr.Wolfram also worked with Galleria Kaufhof's, a high-end German department store that also is part of Metro.The retailer deployed RFID to provide real-time inventory management. The system addresses back room inventory management and involves fixed and hand-held readers, smart mirrors, smart shelves and RFID-enabled POS terminals that deliver efficient checkout.

Dr.Wolfram also was the driving force behind Metro's highly publicized Future Store Initiative, which gathers companies from the retailing, consumer goods and information technology industries to elaborate on future retailing solutions. All companies involved share a common vision: setting new technological standards in retailing and supporting the modernization process of the industry on a sustainable basis.

HEADQUARTERS: Los Angeles
NUMBER OF STORES: 336
SALES: $1.2 billion
VERTICAL: Apparel

When Michael Relich joined Guess a little more than three years ago, the company was having an identity problem.Was it a wholesale apparel company with a retail side or retail apparel company with a wholesale side? Guess started as a wholesaler. But its retail business came to account for 80 percent of revenue. But to truly become a retailer, it was necessary to separate the wholesale "My first act at Guess was to convince senior management to split the inventory between retail and wholesale and manage the warehouse for each channel separately," says Relich.

 

The project was a resounding success and inventory visibility is no longer a problem. Relich and his team then integrated the Canadian merchandising, planning and allocation systems with the U.S. system, while upgrading merchandising applications and implementing a data warehouse. The IT team also automated all business intelligence reports driven by the data warehouse.

"The key to a successful IT organization is to be aligned with the business and provide strong leadership," says Relich. "IT people should be leaders, not followers. This can be accomplished by having an organization with a mix of strong technical resources to support the systems and respond to the business. Most importantly, a business needs strong IT management who are practical and understand the business. The retail business moves quickly. IT needs to be responsive, which often means being creative."

Best Buy International is about two-thirds of the way through a three-year IT overhaul. Leading this overhaul, which includes totally remodeling the company's supply chain to using wikis to train its 160,000 employees, is Robert Willett. A business unit of Best Buy, Best Buy International is dedicated to developing and growing the company's businesses outside the U.S.

 

Under Willett's leadership, Best Buy International will implement a global integration and growth strategy to maximize opportunities beyond North America. It will continue to reengineer the supply chain and information technology functions that support the company's customer centric transformation.

 

"I don't separate technology strategy from the business strategy," says Willett. "The job of technology is to mirror the business strategy. Over the last three years, we've worked to create a core architecture and infrastructure that is flexible enough to bring about rapid change. By using software packages that are already out there and making minimal enhancements to them, we can accelerate what we are doing around customer centricity."

 

The IT overhaul reaches beyond in-store operations to the supply side. The supply chain project began "through the eyes of the customer," according to Willett. IT is improving Best Buy's customer service by making shoppers' visits to stores more efficient. For example, Willett and his team are working to eliminate the amount of time consumers wait at checkouts.

HEADQUARTERS: Irving, TX
NUMBER OF STORES: 1,200
SALES: $3.87 billion
VERTICAL: Specialty Craft

In little more than three years, Mike Jones has crafted an impressive list of projects with craft specialty retailer Michaels Stores. Recently, Jones and his team replaced an Oracle/AIX system with one from Netezza. "We found ourselves spending a lot of time creating aggregate tables and tuning to optimize performance rather then developing more value added information/analytics," says Jones. "We were able to eliminate much of the tuning work and begin to focus more on adding value."

 

The move should become cost effective over the next few years. The Netezza platform will continue to grow in processing speed and storage capability sans hardware or software investments, says Jones. "This is a big win for a company like Michaels that is moving into an era of detailed analytics to help guide our business."

 

Jones' team is currently in the throes of implementing WorkBrain's Time & Attendance and Scheduling solution. "We have had the most active participation from the business divisions, store operations and human resources that I have ever experienced. This is what will make it a success no matter what obstacles we come across. I have done this type of roll out twice and have never had this level of support."

 

Jones believes that transparency is crucial to a successful IT organization. "People don't understand IT. The more you allow it to be a black hole, the less people will be able to support you.You have to be clear about projects you can do and even clearer about what you can't do. Understand how the business sees IT. This comes mainly through PC support, store support and, to some degree, application support. If these organizations are not performing well, or they do not show a sense of urgency, this will reflect on the rest of the IT organization. This is most people's only window into IT." RIS