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Industry News - June 25th 2010



Kroger's Customer First Delivers Strong Sales, Loyalty

Kroger announces it is growing sales and loyalty with the success of its Customer First initiative, which aims to strengthen the connection the brand has with its customers. The brand's Customer First strategy focuses on four key areas including people, products, the overall shopping experience in stores, and prices. 

The supermarket chain recently reported identical supermarket sales increased 2.4 percent without fuel during the quarter. "This continues Kroger's trend of positive identical sales growth that is among the strongest in the industry," said David Dillon, chairman and CEO, Kroger. "Each one of our 18 supermarket divisions had positive identical sales results. Every supermarket division we operate posted positive identical sales results for the quarter."

Kroger is beginning to recognize several benefits since enacting its Customer First strategy. "The number of total households we serve continued to grow in the first quarter," says Rodney McMullen, president and COO, Kroger. "Our loyal household count grew at a faster rate, including that our best customers are the primary beneficiaries of the investments we are making in the four key areas of our Customer First strategy. We reward our best customers for their increased loyalty. Increasing purchases from loyal families is an important part of our growth strategy."

Kroger, which has a strong partnership with dunnhumby, uses shopper data from its loyalty program to reward its best customers with offers and coupons tailored exclusively for them. 

"No other US grocery retailer offers this level of personalization and rewards," says McMullen. "Our goal is to earn a customer's loyalty for life."


Target Uncovers Sales Trends with Shopper Insights Tool

Target deploys the Shopper Insights solution from DemandTec to break down sales trends by penetration and buy-rate, shopping trip statistics, shopper segment. Target uses the solution to make more localized merchandising and marketing decisions that improve the relevance and value of Target's offerings for their guests.

As part of DemandTec's nextGEN strategy, DemandTec Shopper Insights includes Shopper Insight-on-DemandTec, a software service that provides retailers with guest insight dashboards and insights embedded directly within the planning workflows of DemandTec's other software services. Target and its trading partners also can identify new opportunities to reach specific guest segments with more tailored assortments, promotions, and pricing.

"DemandTec has been a strategic partner of Target and we value their industry expertise and innovative solutions. We look forward to expanding our relationship into shopper insights and additional nextGEN capabilities," said Shelley Hyytinen, Vice President of Merchandising Process and System Development, Target.

Target began working with DemandTec in 2007 and has now extended its subscription to software services included in DemandTec Lifecycle Price Optimization, DemandTec Assortment & Space, and DemandTec End-to-End Promotion Management. In addition to the guest insights and vendor collaboration provided by the Shopper Insight-on-DemandTec software service, DemandTec Shopper Insights also includes DemandTec's nextGEN modeling services, which helps enable Target to understand and influence the impact of merchandising decisions at the guest segment level.


Carphone Warehouse Implements Enterprise-Wide Fraud Prevention Tool

The Carphone Warehouse, the UK's largest independent mobile phone retailer, adds an enterprise-wide fraud prevention solution from Accertify. The fraud prevention solution from Accertify helps retailers reduce fraud by 70 percent or more in their fraud rates, along with declines in fraud-related labor requirements and improvements in online customer service. 

"The Interceptas platform is the best fraud prevention system I have ever seen," said Phil Mead, head of Fraud and Loss Prevention at The Carphone Warehouse. "Accertify has a clear understanding of the issues in the market and has been proactive in developing integrated key modules missing in other solutions I've evaluated or used in the past. Interceptas is the only system we've found that doesn't require us to deploy a patchwork of other tools and processes to fill in gaps. We are confident Interceptas can efficiently manage all the fraud related risks we face whilst not impacting on genuine customers."

"We were impressed with Accertify's holistic understanding of the business and its superior track record in helping online retailers combat payment fraud," adds Mead. "Its Interceptas platform was designed from the merchant's perspective to give users the control, customization and comprehensive feature set they need to stay a step ahead of fraudsters."

Carphone Warehouse Group is in a joint venture with Best Buy Europe Group and has a significant interest in Virgin Mobile France.


Urban Outfitters Boosts Supply Chain Performance

TUrban Outfitters, which delivers unique shopping experiences through its specialty retail stores, Web sites and catalogs, has recognized several benefits across its supply chain since implementing a suite of software solutions from Manhattan Associates. 

When the company moved the fulfillment and call center activities of its direct and wholesale channels to a facility in Trenton, S.C., it needed a solution to scale. The retailer selected Manhattan Associates' Warehouse Management solution (WMS) from the Manhattan SCOPE Distribution Management solution suite to optimize its distribution network. To support Urban Outfitters' European retail operations, Warehouse Management was also implemented in its London retail distribution center. In addition, the company plans to implement WMS in two additional U.S. retail facilities in Gap, Pa. and Reno, Nev. by the summer of 2011.

"With our continued growth and increasing sales straining our network, we decided to transform our supply chain processes with a long-term solution that could support operations across all of Urban Outfitters' multiple channels," said Ken McKinney, executive director of Logistics, Urban Outfitters. "We needed the capacity to handle high volumes, increase process efficiency, improve supply chain visibility and obtain meaningful performance measures."

McKinney added, "Urban Outfitters obtained a significant return on its investment with Manhattan SCOPE solutions. We achieved increased productivity and supply chain visibility along with improved collaboration with trading partners and product flow."

Since implementation, Urban Outfitters has experienced benefits, including 35 percent reduction in total labor, 80 percent reduction in manifesting and invoicing processes, 66 percent reduction in turn time through receiving-from 3 days to less than 24 hours-and a 60 percent rise in putaway efficiency. The company benefited from the Supply Chain Intelligence solution as well-using the solution's dashboard view and detailed reports to measure and analyze supply chain performance.

"We had no idea how valuable the Supply Chain Intelligence solution would be to our business," said McKinney. "Its analysis capabilities and detailed reports were a nice surprise."


Pier 1's Financial Turnaround, $6M IT Investment

Coming off of one of its most successful quarters in years, Pier 1 announces it has successfully increased sales, improved merchandise margins and controlled expenses in its latest quarter. As a result of these efforts, the specialty retailer posted a $35 million improvement over the $26.7 million operating loss posted last year. Comp sales grew 14.3 in its most recent quarter. 

During its latest quarter, the specialty retailer spent $6.3 million on capital expenditures, which was primarily spent towards IT, making e-commerce enhancements and improving its existing store base. 

"We are constantly looking for ways to make our business more efficient and effective," said Alex Smith, president and CEO, Pier 1. "We are very excited that now we can have more technological solutions to help us do that. New systems will also simplify our IS infrastructure over time, by reducing the number of technologies which we use to run our business."

As part of its e-commerce enhancements, Smith adds, "Pier1.com is looking great and we are investing more in the Web site by updating the pre-shopping and marketing experience for our customers. By September, our entire assortment will be online and available for pre-shopping. This is an important precursor to any form of e-commerce."


Toys "R" Us Gets Jump-Start on Holiday Competition with Christmas Savers Club

Holiday shopping may be a long way off, but Toys "R" Us is already vying for holiday shopping spend with the launch of its Christmas Savers Club. The program aims to encourage shoppers to start planning early for the holiday season by setting aside money for purchases beginning this summer. 

Shoppers can sign up for the Christmas Savers Club in-store or online. Early members of the program that join before October 16 gain additional incentives such as a 3 percent added bonus to the total amount they save by October 31. The cards can then be used on purchases starting October 31 at both Toys "R" Us and Babies "R" Us stores or on its Web sites. 

"Through our Christmas Savers Club, parents and gift-givers can better plan their holiday spending well in advance of the season, while we provide them with a convenient, effortless way to budget," said Greg Ahearn, senior vice president for marketing and e-commerce of Toys R Us, in a statement.


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