Technology power

New software, systems boost retailers' profits

By Gary Evans -- Furniture Today, August 21, 2005

High Point — High Point— From on-screen catalogs to automated delivery scheduling, furniture retailers are turning to technology to increase profits.

That includes everybody from the Top 100 chain with its own IT department to the single mom-and-pop store limited to a few pieces of software.

With retail growth on the rise, executives are now able to devote more of their budgets to enhancing the technology side of their operations. With that in mind, Furniture/Today asked leading technology vendors to detail what's new and what to expect in the future.

Here are some of the highlights:

Furniture.com

"We believe that retailers' increased reliance on overseas sources will dramatically increase the value of 'consumer preference data technologies'" in the next five years, said Carl Prindle, CEO of Furniture.com.

With stores incurring significant upfront costs and long lead times to import product, "it has never been more important for furniture retailers to buy the right product at the right price," Prindle said.

"Buy too much or at the wrong price, and the high handling and finance costs incurred are hard to recoup."

Prindle said that supermarkets and mass discounters have long used checkout data to improve their ability to stock the right product at the right price.

"This has yet to be the case for furniture retailers," he said. "Not only have such systems been lacking, but furniture's relatively high price point and the infrequency of transactions make what happens before the sale far more interesting than actual transactions."

The real opportunity for retailers, he said, is to understand whether something is likely to sell before it does, and if it's not selling, to figure out why.

Prindle thinks that, in the next five years, the technology that answers these questions will be critical for retailers that import to maximize their opportunities and mitigate risks.

At present, Furniture.com systematically collects and analyzes consumer preference data for leading retailers based on consumers' viewing products on its Web site nearly three million times each day. Prindle said the company then analyzes consumers' reactions to each product on the site, assessing feedback on style and price.

The information is presented real-time to clients in easy-to-read reports, which can be used to optimize their current lineups, as well as to test product before taking large inventory positions.

ProfitSystems

According to Larry Stark, chairman of ProfitSystems, the biggest technology development affecting retailers over the next five years will be the continued adoption of EDI.

"Within five years, everything will be electronic," said Stark, adding that his prediction includes manufacturers' catalogs with configuration and visualization capabilities, merchandise acknowledgements, advance ship notices, invoices and freight bills. And the list goes on.

"This trend will force companies to become electronically enabled for all types of transactions," he added. "Furniture retailers who have not electronically enabled their businesses in this way will pay too much for everything they do."

For now, ProfitSystems continues to focus on the question, "What can we do to increase real efficiencies and cut real costs for retailers?" said Stark.

Being former retailers themselves, Stark said the company's leaders respond to retailer needs "by keeping our software code healthy and robust by using the latest technology to keep things simple."

This includes making the company's products easy to run and easy to integrate with other industry solutions — like a seamless integration with MicroD's PreVue IV electronic configuration and visualization software. The MicroD capabilities are accessed from within ProfitSystems' Profitprofessional program and can automatically update the sales module or purchase order module.

"The automation contained in Profitprofessional Version 11 is the fourth generation of this integration since its original introduction with our Version 9 and MicroD's PreVue II, and, at this point, it really is as full-featured as it can possibly be," he said.

Profitprofessional also supports automatic creation, transmission and processing of standard Furniture Industry Data eXchange (FIDX) orders, merchandise acknowledgements, advance ship notices and merchandise invoices in the latest XML/EDI formats.

For manufacturers that are not yet ready for XML/EDI, purchasing transactions can be transmitted through Exim Technologies or FurnishNet and translated into any format required, said Stark.

The company's technology offerings extend all the way through to customer service and delivery, even down to integration with RouteView software, which enables total, end-to-end electronic control of deliveries.

"All this technology boils down to vastly increasing efficiencies for the retailer and a far more satisfying shopping experience for the customer," said Stark.

GERS Retail Systems

GERS, another major software vendor, facilitates the real-time flow of transactions and information across the entire retail organization, enabling retailers to consistently anticipate, understand and fulfill their customers' expectations for products that are priced, located and timed to meet consumer demands in every selling season.

The company recently hooked up with five Ashley Home Stores to integrate their inventory and store operations with Ashley's corporate system using the FurnishNet electronic document exchange service.

"Integrating our supply chain with Ashley Furniture's corporate system not only streamlines our operations, it significantly improves the customer experience," said Shelly Levitz, co-owner and CFO of the Ashley Home Store retail group in Dallas/Fort Worth and El Paso, Texas.

"There will be fewer if any order errors, and we can schedule faster deliveries, which our customers will appreciate."

In addition, said Phil Kenney, vice president of product management and marketing for GERS, the program "lowers retailers' operating costs by automating the lookup and delivery scheduling process, speeds and simplifies document exchanges, reduces the amount of Ashley stock in their warehouse, and guarantees deliveries to increase customer satisfaction."

Myriad Software

Most often, customers are the driving force behind software innovation, especially if the provider says, "Tell us what you want."

That remark has been a common theme at Myriad's annual user conference for years — with the latest response being Myriad's Retail Price Manager, an enhancement that makes retail price-changing a matter of a few keystrokes.

Whatever the reason for a price change — a chair clearance or a sofa promotion, seasonal sales event or price hike from a supplier — changes can be handled now in advance of the event and with the knowledge of what they truly will cost, Myriad said.

"We can control our retail pricing behind the scenes, before the promotion begins," said Susan Johnson of Bassett Atlanta, one of the early adopters of Retail Price Manager.

Another Myriad client, Rick Huffman of Bassett San Marcos in California, values the fact that the program ensures that his stock margins are correct. "With the Retail Price Manager, you know exactly what the price change will cost you."

The Retail Price Manager is an efficient means of handling hundreds, even thousands, of changes in a single promotional category.

"We might have one sofa in 14 colors and a variety of fabrics. With the Price Manager, we can deal with each option separately," said Johnson.

The program also is easy to use: "You put in a start date, an end date and click on the items on sale," said Huffman.

And that can apply to any number of items involved in the price change, as well as to any number of categorical changes. For instance, a retailer can increase the price of all sofas from a particular manufacturer by 10%, decrease all dining room furniture by 20%, and mark down all discontinued items on the showroom floor by 13% — and do it simultaneously.

Storis Management Systems

Storis, another full-line software solutions provider to big-ticket retailers, said its iCall application is improving retailers' delivery operations and boosting customer service. By converting Storis' delivery schedules into human voice messages, iCall informs customers when to expect merchandise via an automated call process.

"iCall has improved our operational efficiency and has helped us reduce our overhead expenses," said Chuck Ghastin, network administrator of John V. Schultz in Erie, Pa. "With iCall making all our delivery calls, we can schedule our outbound calls for a suitable time for our customers to receive their delivery confirmation call.

"In the past, we would make delivery calls between 6 p.m to 9 p.m., in between working with customers on the sales floor. Since our employees no longer need to take an active role in the calling process, we can focus 100% of our time on the customers on the sales floor."

iCall also includes information regarding outstanding COD payments, and provides inbound order status inquiries and automatic updates to order comments.

"With iCall there is no chance of human error; therefore, our sales order is always accurate as everything is updated automatically," said Ghas-tin.

Ez Process Pro

Ez Process Pro has developed a software package that eliminates the need for fragile, expensive, in-house networks in retail furniture companies while still allowing complete communication across an entire organization, said Alan Lucien Jr., the company's CFO.

This application, which uses Ez Process Pro's own server, maintains 128-bit encryption, a relatively new encoding system that has never been compromised, according to Lucien.

The software package also provides enables a retailer to access, in real time, the latest information relating to product availability, pricing and photographs — making it virtually impossible for salespeople to sell merchandise that is not readily available within the time frame set by the consumer.

"Imagine not having to worry about mice chewing through your network cables, or about why you can't deliver a $10,000 cash sale because you didn't know at the time of sale that the nightstand was discontinued," said Lucien. "Imagine sleeping at night, knowing every sale your company makes will be delivered on time, and that your confidential information be held in the most secure of environments."

EasyChair Software

Technology advances in network and product identification will allow furniture retailers to continually streamline their operation and lower fixed costs, said Ron Merry, president and CEO of EasyChair, a provider of retail management and accounting software.

"New wireless standards allow software vendors to integrate peripheral devices such as scanners, tablet PCs and so forth, much more rapidly and robustly," Merry said. "We also expect the cost for RFID (radio frequency identification) technologies to drop and become more universally accepted, thereby allowing a unique tracking ID from the manufacturer to home delivery."

According to Merry, EasyChair's software suite is hosted on Linux, a platform that is completely network-enabled and being improved constantly by multiple companies worldwide. This ensures that the software will always be available to integrate with the latest technology advances.

As part of its support offering, EasyChair provides Internet access to its software suite as a backup for customers whose on-site computer may have failed. Merry said this ability has been packaged into a new service offering.

"The new service has a lower cost of entry and faster start-up time than the traditional solutions that require hardware to be bought and installed before use," he said.

RouteView Technologies

RouteView Technologies, a delivery technology specialsist, has just announced turn-by-turn directions on demand direct to the driver's cell phone. No matter where the driver is, the system will guide him to his next delivery point, said one of the company's partners, Jay Landau. This will be delivered in English and Spanish.

"As delivery costs continue to skyrocket, more and more home furnishings companies see the need to use map-based routing to ensure maximum productivity of their fleets," Landau said. "When used in conjunction with an integrated GPS (global positioning system) module, real savings are being attained."

Furniture Wizard

Furniture Wizard's latest product is its integrated, wireless Bluetooth scanner, which handles tasks such as point-of-sale, inventory, receiving, transfers and delivery, plus tagging of floor items.

"It eliminates errors and the time-consuming drudgery associated with day-to-day operations," said former retailer and company founder Marty Fischbein.

He added that he believes the scanner "will revolutionize the way tomorrow's information will be handled by retail furniture stores."

The scanner doesn't hold information but rather talks directly to Furniture Wizard systems. It has a range of more than 250 feet, which makes it functional not only on the sales floor but also in the warehouse and loading dock, Fischbein said. It can read dual barcodes, either those generated by Furniture Wizard or UPC (universal product) codes, enabling data such as the supplier name, item description, selling price and quantity in stock to be easily retrieved.

Salespeople also can use the equipment to keep a running total of purchases for the customer, and have a sales invoice ready when the transaction is complete.

On the dock, the scanner reads the supplier's UPC code as each item is unloaded, checks it against existing orders and determines if it goes to the warehouse, sales floor or directly to the customer. It also triggers processing of warehouse or showroom tags, or sold tags with customer information.

Intuit

Intuit says its QuickBooks Point of Sale wireless scanner can replace retailers' cash registers and allow them to better track data relating to inventory, sales and consumers. It can be used alone or bundled with hardware components that save time and reduce errors.

Furniture retailers also can pair the program with QuickBooks Financial Software.

The company said that for a small store just getting started or a seasoned retailer expanding to new locations, an enhanced point-of-sale system can greatly boost efficiency.

ActivePoint

The latest product from ActivePoint, a provider of contextual natural language search engines, is the EasyFlip e-Catalog, an online sales circular that emulates the look and feel of print circulars.

According to the company, the product allows consumers to browse products just as if they were flipping through "old fashioned" print catalogs. Users can then add items to online shopping carts for purchase.

"EasyFlip bridges the gap for the end user between print familiarity and online shopping," said Moshe Ofer, CEO of ActivePoint.