Top Retailers Invest In IT

7/2/2007
Last week the National Retail Federation released its list of the Top 100 retailers. The report is an annual snapshot of the retail industry, and ranks retailers only by revenue. In the current retail environment of fierce competitiveness, retailers are employing many methods to stay ahead. One such method is merchandise differentiation; in particular private label offerings by many retailers are increasing. However, another method for gaining a leg up over competitors is to leverage technology to drive sales, increase loyalty and decrease costs. Not unsurprisingly, many of the top retailers have recently announced major IT initiatives.

Of the top five retailers, three recently announced IT projects, while a fourth (powerhouse Wal-Mart) is known to be continually working with its IT department to improve efficiencies throughout the organization.

The Home Depot (#2) and Kroger (#3) have both leveraged multiple technologies to enhance store operations and processes. The Home Depot's most recent IT initiative is a deployment of an IT lifecycle management system from Matrix42. The Empirum suite is being used across all 2,164 Home Depot retail stores globally and centralizes the management of all enterprise networked devices. The Home Depot is using Empirum to increase productivity and reduce administrative support costs. A recent customer-facing IT initiative trialed by The Home Depot was a digital signage campaign throughout its Canadian stores. Partnering with RAM Forest Products and MediaTile, Home Depot Canada stores created the "Creat the Deck of Your Dreams" campaign which resulted in an increase in sales of deck accessories by more than 50 percent. The campaign incorporated multimedia video advertisement which gave consumers a step-by-step education on deck building.

Supermarket retailer Kroger (which just last month won RIS New's Supermarket Achievement Award for the Shopper Experience) also is deploying both back-end and customer facing technology to maintain a competitive edge. With a best-in-class shopper experience in mind, Kroger has been among the first supermarket chains to install self-checkout and DVD rental kiosks. On its back-end, in January of this year Kroger began an implementation of a new IBM infrastructure. The infrastructure will enable Kroger to more easily, and more speedily, create new services for its customers. "With this initiative, we will be able to introduce innovative services quickly and seamlessly to improve our customers shopping experience," says Chris Hjelm, senior vice president and CIO at Kroger.

Number five on the Top 100 list is Target. As with The Home Depot and Kroger, Target is leveraging technology to improve its back-end operations. In particular, Target recently partnered with Swisslog to create and implement a new picking and storage system for its warehouse operations. The system will be designed to minimize warehouse logistic costs while optimizing distribution processes.

A few other retailers on the Top 100 list leveraging technology include: CVS (#9), Federated Department Stores (#13), Publix (#15) and Staples (#18). In January CVS deployed a new merchandise and data management system from Soft Solutions. Federated, which officially changed it's name to Macy's this past spring, trialed a futuristic SocialRetailing system from IconNicholson in the Nanette Lepore department of its Manhattan Bloomingdale's store. Publix expanded its data warehouse with Teradata and implemented BlueCube workforce management from RedPrairie. Office supplies retailer, Staples is overhauling its POS hardware and deploying nearly 8,000 new POS terminals from Fujitsu to its US, Canada and Europe stores.

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