Retailers Buy In To Real-Time BusinessRetailers Buy In To Real-Time Business

Retailers, many of which suffered from disappointing sales during 2002, are looking at new technology to provide them with real-time information about buying trends and customer preferences. Vendors are responding with a variety of systems to help retailers cut costs, improve service, and make better use of data that stores already collect.

PC market leader Dell Computer entered the retail market last week, introducing a point-of-sale system that includes PC-based cash registers, software, and peripherals that run Windows or Linux. That move was matched by established POS system vendors NCR Corp. and Wincor Nixdorf GmbH, which added support for Linux to their newest terminals.

"The point-of-sale stuff out there is just getting old," says Greg Buzek, president of IHL Consulting Group. Retailers typically spend 40% of their IT budgets on point-of-sale technology and are looking for a less-expensive alternative to IBM's dominant technology, which is used in about 75% of all retail environments, he says. That prompted Dell's move into the $3.9 billion retail-technology hardware market.

The core of Dell's $1,794 retail system is an OptiPlex PC. Customers can buy add-ons such as receipt printers, bar-code scanners, keyboards, and cash drawers from Dell or other vendors. Dell has partnered with independent software vendors to provide cash-management, inventory-management, customer-loyalty, and other retail software. Wet Seal Inc., a $601.9 million-a-year retailer of clothing and accessories, is spending around $2.5 million to place 1,400 Dell PC cash registers in its 590 stores. The machines replace IBM PC registers running the Pick operating system and programming language. The Windows-based Dell registers will integrate with a greater number of applications on the back end than the IBM systems, says Ron Hunt, Wet Seal's operations manager. "We can make a lot better decisions if we have instant data, and that's what all of these systems allow," he says.

Giving retailers more common operating systems can help them integrate checkout point-of-sale systems with back-end data in real time. That's one reason Wincor Nixdorf introduced a version of its Beetle register that runs the SCO Group's SmallFoot Linux-based POS operating system. NCR also introduced RealPOS 80, a register that runs Linux, Windows XP Embedded, or Windows XP.

"The course we're on this year is to enhance customer service," says Richard White, CIO of clothing retailer Ross Stores Inc., which is installing Fujitsu POS systems in more than 500 stores. Many retailers spent money on supply-chain applications and merchandising in recent years, so it's no surprise that they're now focusing on point-of-sale systems, says Robin Lynas, CIO of Canadian retailer Mark's Work Wearhouse, which is rolling out Java-based POS software from Retek Inc.

Retail market leader IBM isn't sitting still. Last week, it introduced a "retail-on-demand" strategy that calls for the integration of management software, biometric security tools, middleware that ties point-of-sale systems to inventory and customer-resource management applications, and POS terminals that integrate catalog, store, and Web channels. But that kind of comprehensive system may be more than most retailers want. "Massive system replacements aren't on the agenda for retail this year," says Paula Rosenblum, an AMR Research analyst. "Retailers are looking for point solutions with rapid return on investment."