Retailers
therefore depend more and more on software vendors
with global experience, not just in technology but
in the particular point of sale, employee and fiscal
difference from country to country.
It should go
without saying that cross-border software should
be multi-currency and multilingual. However,
while software from one vendor to another may not
differ in terms of actual technical functionality,
the ability of the individual vendor to make the changes
that retailers require will.
For instance, it is not
enough to render software in Italy in Italian at
the front end. The unique fiscal
requirements that the Italian authorities insist on
mean unique programming of the point of sale and printers.
Cross-border
software should give retailers central control of
activity in all their countries of operation,
in real time, without having to wait for each country
to report. The benefits of this in terms of replenishment
are enormous. For instance, if stock is selling well
in one country but not in another, stock can be moved
to another country in time to take advantage of the
sales opportunity.
And because replenishment decisions
can be made centrally, the most cost-effective logistics
decisions can also
be made to decide on the optimum allocation for each
store, to make comparisons between store types, to
see which formats perform best and to determine where
there may be economies of scale across a group of
stores that may be in different countries and yet
still close to each other by sales or customer profile.
For
instance, French fashion manufacturer and retailer,
Naf Naf, aims to conduct 50% of its business abroad
and is equipping its 176 stores across Europe with
a single version of its point of sale software, Colombus
retail, incorporating store management, point of sale
and customer loyalty in order to benefit from an increase
in real-time information from the point of sale to
head office. The overall objective is to increase
efficiency, reactivity and improve decision-making
at every stage of the retail cycle.
According to Franck
Dubois, Naf Naf IT Director, “Integrated
business applications are vital components in building
a powerful, coherent and versatile IT structure able
to evolve and adapt to changing environments.”
And
not only stores. Centralised purchasing can be managed
across channels, so that retailers can make
the best decisions for maximising sales through alternatives
channels, such as the Internet. While retailers have
tended to make new decisions for each new territory,
thus adding cost, a single purchasing strategy can
actually help retailers to reduce the costs of each
new store.
While there is a wide choice of best of
breed systems for retailers and for manufacturers,
there are few
options for companies engaged in both activities,
and yet there are a growing number of companies that
operate across both channels and indeed additional
channels.
For instance, Orchestra, a French clothing
brand for children aged between 0-14 years, was concerned
to get consistency across its distribution channel,
and to analyse the life cycle of a product from purchasing
to reception and from warehouse to point of sale including
sale event analysis. Orchestra’s sales, logistics
and marketing priorities: to improve its purchasing
management processes, to optimise logistics (notably
replenishment) and to focus on its customer loyalty
policies.
A single approach to point of sale extensions
such as customer relationship management are also
valuable.
Again, while local stores will want to make their
own sales and marketing decisions and employ different
strategies, the centre needs overall control, to compare
strategies, determine where there has been most success
and share best practice.
More and more point of sale
extensions are becoming business as usual and again,
vendors with broad experience
will be required. Chip & PIN, the credit card
fraud initiative that sees the burden of fraud shift
to retailers in January 2005 demonstrates that while
there is a different timetable for each country to
adopt a solution, vendors that have pan-European experience
will enable cross-border retailers to take advantage
of much lower costs and more rapid roll outs.
The future
As adoption of the Euro becomes inevitable, UK retailers
will be forced to go into Europe. They will also
have to adopt new forms of distribution, both new
channels and organisations including franchising.
They will be up against new competitors in both
distribution and retailing, so it will be critical
that they have access to software providers with
European experience and solutions.
In addition, whilst
many retailers will wish to centralise their core
merchandising functions, they will have
to adopt local CRM strategies and therefore will need
localised CRM functions that can handle customers
as they expect to be handled in their own homeland.
This is key to gaining and sustaining competitive
advantage. Pan-European software providers can provide
retailers with a balance between central control and
local autonomy
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