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Microsoft Business Solutions Retail Management System (RMS)
cuts airport transaction times down to a few seconds and shortens tasks in every
department. It helps store managers stay on sales floors, assessing customer
needs, and hearing about the competition
Case Study: Gift stores take off in airports“With Microsoft RMS I worry less because I see more. Our managers are less stressed.” Kathleen Avila, Managing MemberOverviewAvila Retail sells U.S.$10 million annually from 12,000 square feet in 12 locations. That efficiency demands instant transactions, incredibly alert stock management, constant space optimization, and purchasing as sharp as the ojos de Dios. After its first Native-American themed shop opened in 1978 in historically rich Old Town Albuquerque, Avila Retail grew to 11 airport locations. Dedicated employees and management’s attention to detail created expansion in spite of slow credit authorization, different point-of-sale solutions in various stores, and a central IT system that printed long reports to accomplish simple business tasks. Today, Microsoft® Business Solutions Retail Management System (RMS) cuts airport transaction times down to a few seconds and shortens tasks in every department. It helps store managers stay on sales floors, assessing customer needs, and hearing about the competition.Situation“Airport shoppers have zero tolerance for lines,” says Kathleen Avila, managing member. “If they see three people in line, they may go to the next shop. Since our small-shop footprint allows only two registers, everyone wants to be first. Intuitively, we knew what factors would speed lines, but our systems wouldn’t let our solutions happen.” Avila Retail’s product mix varies by city, with up to three themes in four stores in the same airport. Airport management requires that 85 percent of sales conform to a declared theme, in Avila’s case Native American, contemporary, or Western/Southwestern jewelry and gifts. They buy 16,000 SKUs of crafts, jewelry, ceramics, figurines, cowgirl retro, apparel, whimsical furniture, music, regional books, and seasonal items from 600 suppliers who range from artists to large manufacturers. To get volume discounts and free shipping, most items are centrally purchased and some are centrally received.Multiple Dilemmas“Efficiently compiling chain-wide purchase orders from our different IT solutions was impossible,” says John Avila, chairman of the board and president. “To see the big picture, we manually merged every store’s POs into Excel.” Their existing purchasing structure taxed staff, encouraged overstocks and permitted stock-outs. “With Microsoft RMS reporting flexibility we keep optimum stock levels on top-performing items and suppliers,” says Teresa Curl, vice president of operations. “Our airports require that shop prices be within 10 percent of street price.” So the complex logistics of airport delivery, security, high rents, and the arduous compliance reporting requirements cannot be simply added to consumer prices. Overhead had to drop. “We might distribute one supplier’s shipment to eight stores in three cities, or combine items from ten suppliers into a shipment to one store,” says Kathleen. Goods received into the central IT system had to be reentered into different systems at store level. Kathleen says, “Our central IT solution was so unfriendly that I ran 20-30-page reports to compare how a product sold in Albuquerque, Denver, or Phoenix. Did it sell faster in airports or Old Town? I needed a five-page report to approve reorders. Imagine what our offices looked like!” Reporting clumsiness of their old IT solution slowed applications for new locations. Airports require retailers submit a complete business plan covering their financial health, proposed product mix, suppliers, business history, labor standards, and personal backgrounds. Dispersed information made that difficult. “We also turn in annual reports,” says Kathleen, “tight enough to undergo an audit back to our bank deposits, for each airport for each shop. We used to literally deliver a large box of reports we had started a month earlier. It was a huge drain on hours and productivity.” “Our locations are not large,” says John Avila. “We hire efficient people who multitask, yet we had acquired software that gave us double-work. It was defeating a core principle of our company.”Solution“We can’t control airport foot-traffic,” says Kathleen. “But we can control everything that happens in our stores. We started a search for tools to give us that control.” Avila started with a budget that considered initial costs and ongoing ownership, a hard- criteria list, and a wish list. They needed an end-to-end retail solution for a growing chain that would allow store managers to be responsible for their own inventory, sales levels, profit and loss, and reporting. It had to enable communication between corporate and airports with different communications capabilities so corporate could instantly assess product, employee and manager performance, both over time and compared to others. It also had to be accessible remotely by company executives. Says Curl, “And we wanted to enter any datum once for the company—not once at every store!” “Everyone told me if I bought UNIX, I’d need an in-house guru to maintain it,” says Kathleen. “We rejected proprietary hardware or software because they take away all your bargaining power when you upgrade—and because we wanted to exchange data with better financial tools. We rejected companies that might not keep products on the leading edge of technology.” Avila Retail’s top requirement was a fast point-of-sale (POS) operation. Curl specified barcode capability to speed lines, knowing it would help them touch goods less at centralized receiving and stores. “We looked at all the front-runners every merchant looks at,” says Kathleen. “We wanted to always have the latest technology, Windows, and Microsoft SQL Server database. That combination would give us transaction speed, Internet capabilities, consolidated reporting, centralized management, and the ability to move data into Excel or wherever.” “Microsoft RMS is extremely self-contained and logical in its layout,” says Kathleen. “You find things where you expect them. And you find new methods and ideas to leverage in-house intelligence. We hire exceptional people who see problems and have to fix them, who come up with good ideas. Now they have tools that quickly provide facts they need to improve sales and profit.”Benefits“The first thing we noticed was extremely fast transaction times,” said Curl. “Lines just disappeared. Credit authorizations that once took 60 seconds took 3 to 6 seconds. The Transactions on Hold feature lets shoppers run to get what they forgot without holding up a line. And it’s a teaching tool. If something confuses a new associate, he can put it on hold, call a manager, and handle the rest of the line.” If customers come back with a question about a purchase, associates can show them the full transaction on screen.“In business,” John Avila says, “you make decisions all day long. Why shouldn’t you have up-to-the-minute figures all day long? Now we upload numbers to corporate when we like. If a hardware problem hits one register, the rest keep running.” Toni Sinclair, operations manager of the Phoenix stores, says, “Now we manage different pricing levels and use our planograms (store schematics showing where merchandise is displayed) to maximize revenue and margins.” “Our Microsoft RMS inventory count showed us we had a $65,000 overstock in our warehouse,” Kathleen says. “We cut that by 35 percent. Last year Microsoft RMS and Small Business Manager gave us our tightest agreement ever between book and physical inventory. We tied actual to reported levels and general ledger. Its ability to ‘reach in’ and make stock adjustments while you’re reporting is a big help. Handheld inventory tools will help us tighten this up further.” Microsoft® Business Solutions Retail Management System also resides in corporate stockrooms to instantly inventory and assign stock received right off the truck. Another computer is being added to specifically process jewelry, cutting on-site receiving time in half while improving security tracking of expensive items. “We dropped 80 percent off the time it took to create departmental buying budgets,” says Curl. “We customize sales reports by item, supplier, category, department and site so we see what’s selling fast and slow to sharpen buying decisions. Now we can inspect open purchase orders to keep budgets in line.” “The more our staff and IT manager work with Microsoft RMS, the more it becomes a self operated system handled completely internally." “Airport reports will always be part of our business,” says Michelle Grant, accounting manager. “But now we extract information in minutes, whereas one previous audit took us three or four days. We provide airport executives with a disk or e-mail a Microsoft Excel spreadsheet instead of a box of paper. They see we are more organized and they find what they need faster.” Says Curl, “When we did our business plan for our new store in the Phoenix airport, Microsoft RMS organized our data. But in the process, we reviewed our other stores and saw what we had done well and where we could improve. We know what each square inch is producing. We’ve heard of other airport stores being fined or losing a lease for not policing their pricing or product mix Microsoft helps us stay within our covenants.” Fast import of data into Excel yields revenue and profits per square foot and per transaction. “We hire people from all age brackets and degrees of computer familiarity,” Kathleen says. “But Microsoft RMS drastically cut training time. We set security levels in Microsoft RMS and graduate people to higher responsibility and security as they improve or change positions. With good auditing and exception reports, we have reduced internal theft.” Maintaining system records is easier because authorised staff can clean out old vendors and products. Curl digs into “how each store, each city, each cashier is doing, by using the Top Performers report. By customising and memorising reports, I see the data I need and exclude what I don’t. No more 30-page reports unless I need one.” Fast import of data into Excel yields revenue and profits per square foot and per transaction. “Reports should produce action,” says Kathleen. “You need their knowledge so you know what to do when you next pick up the phone, what suggestions to give your new manager, what you tell the vendor whose prices are edging up. One example is a custom report from our IT manager showing me average sale by store, then by cashier. Now that I’m 100 percent comfortable with our data, and I can structure it into exact reports, I can be more certain in my business dealings, whether I’m promoting a person or lopping an order. With Microsoft RMS I worry less because I see more. Our managers are less stressed.” A priority next year will be to continue tightening discrepancies between physical inventory and book. Handheld inventory tools are expected to help narrow the remaining gap. And targeted marketing will be investigated. “We are eager to watch ongoing improvements in Microsoft RMS as it grows with Microsoft,” says Kathleen. “Even in the two years, changes are apparent. It’s exciting to know Microsoft’s expertise and resources are behind the retail industry. The nearness of Microsoft RMS to Microsoft Business Solutions–Great Plains and other financial solutions makes us comfortable that it will last, will get attention, budget, and will stay ahead of the pack.” The Avila staff recommends that other retailers evaluate a product as they did: set up a working trial run in your own environment; subject it to your own business rules; test it with your own supplier and stock challenges. Have several types of staff work with the software. Don’t buy from a demo. “Explore the new system’s capabilities and pre-plan how you will use them,” says Curl. “If you’ve never had return item return reason codes, reorder levels, or security access definitions for each employee, give it thought. If you don’t, you’ll make errors that pull time from productivity, or you slow the installation deciding things as you go.” Pritchett cautions, “If your upgrade involves multiple locations, have an action plan that allows stores to fully operate during the transition. Backups are vital. Clean and purge your old databases before the transition; don’t import a mess. And be very clear about different networking resources at each address before you start setting up your system.” Kathleen says, “Train staff to do more than their basic job; help them understand the system’s rationale and the business reasons it works as it does. We are all about people development and that depends on people expanding their boundaries.” “Don’t think you can get by without modern retail automation,” says John. “The retailer down the street who automates will eat your lunch! You need automation to compare vendors, to strip out ‘lazy merchandise,’ and to get you out of the store earlier. You need a changeable system to control what you can’t see coming.” Discover how your Australian Microsoft Partner can customise this proven Microsoft software for you.Explore your options - email us or call your Microsoft business solutions partner - Bill Wardlaw on 1300 739 113 (8.30am to 8.30pm 7 days)Head office Solutions ABN: 27 226 559 1711 Ballanda St Frenchs Forest (Sydney) NSW 2086 | |