Scan artists

Additionally, as margins tighten, retailers do not just need to address the efficiency of their processes, shorten product life cycle, expand their operations and improve their in-stock performance, but fundamentally alter the shopping experience to drive customer loyalty and minimise switching to competing companies.

SAP, which provides an integrated retail solution portfolio to enterprises, believes that embracing new technologies will be crucial for the future of any company involved in retail or logistics.

“We believe that the technologies most likely to shape the future in retail will be those that facilitate self-service,” explains Essam Enany, president of SAP Arabia. “Customers want speed, flexibility, security, convenience, and, above all else, choice in purchasing.

“From international high-street brands to regional and local merchants wanting to enable online and in-store transactions, SAP offers the applications necessary to deliver these customer needs,” he adds.

How the technology develops will, of course, depend on how the needs of the business develop. Ramesh Cidambi, head of IT and logistics at Dubai Duty Free feels that the challenges are different in terms of the different areas within the company. The challenge for anybody like him working for a retail organisation, he says, comes in three parts.

First, there is the front office where the challenge is to provide a reliable, fast system so that the customer’s experience is good. For Dubai Duty Free it is important that the businesses is able to push through the traffic that it sees on the shop floor and transaction volumes continue to grow every month.

For example, in January 2005 it saw one million transactions, whereas in May 2007 it had around one and a half million transactions. It is a graph that is steadily climbing.

“At the POS,” Cidambi explains, “we need a robust, reliable system which handles the loads that are coming onto the shop floor due to the steady increase in traffic and the passenger numbers.

“In the back office the challenge is to have a reliable applications infrastructure which provides high quality information to the users.”

It is up to the IT department to provide the users with the sales stock and other information that they want, when they want it, in an environment where user expectations keep going up in terms of the kind of information that they want.

The information must be able to flow through different parts of the company through the infrastructure.

“Maintaining that, developing that, pushing the utilisation of that and staying ahead in terms of ease-of-use and functionality is key,” says Cidambi. “Providing better and better information to the end user. That’s really the challenge.

“Then there is the third part – the middle part. The challenge is to have a high quality infrastructure, maint-aining a secure network and high uptimes as well.

“We need to ensure that the people who are using the technology in the front office and the people who are using it in the back office have a technology infrastructure that they can rely on. Doing that in an environment where the organisation, users, traffic and network traffic is growing is very difficult.”

Dubai Duty Free has recently completed the implementation of a new POS solution from NCR. Around 200 terminals were fitted with NCR RealPOS, replacing a Bull POS solution.

“The old cash registers were slower in terms of completion of transactions,” Cidambi says. “The user interface was not as easy to use as the new POS systems and they weren’t as reliable. The POS solution wasn’t a priority for Bull and we had to upgrade our systems – we knew that we were going to open a concourse through terminal three in the near future.

Cidambi feels the new POS systems have a much better interface and staff can be trained on them much faster. Staff can complete transactions faster and printing receipts is also quicker.

“The customer is much better informed of the transaction because the customer display is much better. It’s in colour and you can everything that’s happening,” Cidambi adds.

The importance of these improvements cannot be underestimated. Cidambi is in no doubt that it has increased the revenue stream. “One of the things that makes customers anxious is queuing at the till,” he says. “So because they’re anxious about their flight, boarding and getting to the gate, the faster we can put them through the better the customers feel.

“In a normal, downtown supermarket you’re more likely to have passengers wait in line patiently because the don’t have the problem of trying to catch a flight. In a duty free environment you can’t expect customers to wait forever,” Cidambi adds.

At this point in time, Dubai Duty Free is very happy with its POS and back office set-up and is turning its attention to the middle systems. These typically relate to retail price management, delivery, pushing purchase orders to suppliers and managing all the deals that are made. Cidambi is currently looking at Oracle Retail and hoping to begin an implementation project in the near future.
He does, however, think that the industry as a whole could see major IT developments within the next few years. The next big thing, he believes, will involve getting convergence in terms of POS, the internet and being able to give the customer a unified experience irrespective of how they start the transaction.

So, for example, somebody could walk into a store, having started a transaction on the internet and selected several items he wants to buy. He enters the shop, sees the items that he’s already picked, adds a couple of other items to his basket.

When he gets to the POS he’s able to pay at the checkout for his internet selection, and what he picked up on impulse in the store, in one single transaction.

“We need to push the POS to be more than just a POS,” Cidambi adds. “Currently it’s just a device.”

One major piece of technology that proclaimed by many in retail as the future of IT in the industry is RFID. That being said, it has never really taken off in the Middle East – the general consensus is that it is simply too expensive.

Cidambi is in agreement to a certain extent, saying that it is just not practical at this point in time, but this is mainly due to a lack of standards rather than high costs.

“The technology itself is not a big deal in the sense that it’s now well established,” he says. “It’s stable and the cost is not prohibitive. People keep complaining about the cost of RFID but I don’t the cost is the factor.

“The problem in the Middle East is the complete lack of standards in terms of the master data that RFID needs to be able to run properly. We have very little sharing of master data between suppliers and manufacturers of products and between retailers.”

This leads to the retailer invariably finding out about changes at the warehouse or, even worse, at the POS when selling the item. Because the standards are so poor in this part of the world Cidambi feels that RFID technology will give IT managers more problems than solutions.

“If you go into RFID at item level now then that would be a disaster,” he says. “What is practical and what is possible within the next couple of years is the use of RFID in warehouses. That can speed up the receiving of the item and the distribution.

“Subsequently, within a three to five year time frame you could look at RFID at item level. If you do that then you have all the other benefits – you have speedy checkouts, you have fast counting of merchandise on the shop floor, you can implement self-service and lots more fancy things. But all those things are just the icing on the cake.”

There are a number of retail businesses already looking to embrace the technology though. MS Retail in Kuwait, a chain of department stores selling clothing for children up to age 14, is just one of them.

The company has always been keen to take full advantage of IT, such as Oracle Retail, and use it as a way to attract shoppers and make the retail experience as exciting as possible. The smart dressing room is another example. The intelligent dressing room scans your measurements and lets you see on a projection screen how an item of clothing will look on you. The system also provides shoppers with a list of possible outfits that would go with the item they have selected.

Being an innovator as far as IT is concerned, MS Retail sees RFID as a technology to be implemented sooner rather than later.

“I know it’s a long-shot today and only a few companies in the region use it but we’re always looking to the future,” says Fahad A. Al-Mutawa, chairman and CEO at MS Retail.

“We’re working with suppliers to introduce it at item level. Everything involves cost. Every technology starts off expensive but it all depends on what a RFID solution can actually do for you,” he explains.

“If it minimises the time it takes you to do jobs, minimises shrinkage, minimises manpower, it might be an expensive investment but it could cut down operational costs. You have to look at it both ways. We’re looking into it. We’ll continue to investigate and monitor how our peers implement it. We can learn from them and their mistakes to make it a success for us.”

Oracle, one of the most influential vendors in the retail and logistics verticals is pushing for the further deployment of RFID in the region.

The IT giant thinks it will have a great impact by turning data into a valua-ble information architecture, which will help retailers to reduce inventory tracking costs, gain a much better supply chain visibility, and the insight necessary for optimising business processes. Oracle sensor-based services can enable retailers to integrate sensor-based information into their enterprise systems.

Motorola is also a staunch advocate of RFID technology. The vendor, heavily involved in both retail and logistics, offer end-to-end mobility solutions, which include rugged handheld devices, scanners applications and integration services.

Tarek Hassaniyeh, regional channel manager of the enterprise mobility business at Motorola, says: “RFID technology will have a great impact on the Middle East’s retail vertical in the coming years. It is sure to give retailers greater visibility and faster movement of their goods in the supply chain, which increases operational efficiencies and productivity.”

RFID aside, there are plenty of other ways in which the industry’s IT could develop. Jacky’s, a popular electronics retailer in the region, says that is has been tracking a number of evolving technologies recently – one of which is footfall counting systems.

“We’ve been evaluating various systems as not only do these keep track of your daily footfall but they can be integrated into your POS to start giving much more meaningful analysis,” says Ashish Panjabi, COO at Jacky’s.

Footfall counters now do not only use traditional beam sensors to count people but also thermal cameras which look like smoke detectors and can identify a group of people better than the traditional beam sensor technology. Systems from TraySys in the US cater to this today.

“The other interesting developments are in terms of POS technology as everything is becoming wireless and more compact,” Panjabi explains. “PDA’s will probably replace POS machines sooner rather than later. This then means you don’t need to keep bulky looking POS machines throughout your outlet and use your retail selling space more effectively.”