Home Depot, Kmart, Sears Focus on Logistics
By Pete Hisey
Tuesday, January 1 2002
Tuesday, January 1 2002
Published on AllBusiness.com
Retailers this year are seeing a raft of new, or newly available, technologies that among other things allow them to update software at all POS devices chainwide instantly from headquarters, cut costs out of the returns process and protect themselves from credit card terminal downtime.
Waltham, MA-based On Technology has signed deals with major retailers Staples and Home Depot over the past few months which allow them to update all POS terminals and store-based PCs with new software at the push of a button. According to Bob Doretti, chairman and ceo of the company, Home Depot will be able to update all 150,000 of its POS stations instantly, saving untold millions in laborious manual software installation and testing. "The average retailer has to send out technicians to every store whenever software has to be updated," Doretti says. "The cost in airfare and hotel rooms alone is exorbitant, particularly for a national chain."
The potential savings extend even further, he notes, because software that directly affects sales can be updated nationwide, instantly, along with price changes and new product information. Staples, for instance, uses the technology to update its in-store kiosks to keep on top of new product introductions and price changes, while also transporting new software to POS devices and back-office computers. Home Depot is also using the OnCommand CCN for new and rapidly changing applications, such as custom paint-mixing and kitchen and bath cabinet and fixture design. "As they add and delete products, every store can be updated instantly," he says.
Returns have long been a major thorn in the side of retailers. The costs associated with simply accounting for and disposing of a returned product alone reach as high as $32.40 per item, according to Geri Spieler, research director and analyst for Stamford, CT-based Gartner Inc. But as retailers began automating the process, the costs have plummeted. She estimates that retailers now save 73% of the cost of a return in an automated system compared to handling returns manually. "It is still expensive, but it averages out to about $8.69 per return."
Now retailers and their vendors are developing new and potentially profitable ways of dealing with returns. Genco, a Pittsburgh-based distribution company, is testing new methods of disposing of this merchandise, which often cannot be returned to the manufacturer or restocked in a client's stores.
The latest wrinkle is the online auction, where retailers can offer bulk merchandise to a worldwide audience, and get higher prices for the goods. And, in the case of smaller quantities, they can go directly to consumers on auction houses like eBay.
According to Pete Rector, senior vp of Genco, so-called reverse logistics has boomed over the past decade,
Waltham, MA-based On Technology has signed deals with major retailers Staples and Home Depot over the past few months which allow them to update all POS terminals and store-based PCs with new software at the push of a button. According to Bob Doretti, chairman and ceo of the company, Home Depot will be able to update all 150,000 of its POS stations instantly, saving untold millions in laborious manual software installation and testing. "The average retailer has to send out technicians to every store whenever software has to be updated," Doretti says. "The cost in airfare and hotel rooms alone is exorbitant, particularly for a national chain."
The potential savings extend even further, he notes, because software that directly affects sales can be updated nationwide, instantly, along with price changes and new product information. Staples, for instance, uses the technology to update its in-store kiosks to keep on top of new product introductions and price changes, while also transporting new software to POS devices and back-office computers. Home Depot is also using the OnCommand CCN for new and rapidly changing applications, such as custom paint-mixing and kitchen and bath cabinet and fixture design. "As they add and delete products, every store can be updated instantly," he says.
Returns have long been a major thorn in the side of retailers. The costs associated with simply accounting for and disposing of a returned product alone reach as high as $32.40 per item, according to Geri Spieler, research director and analyst for Stamford, CT-based Gartner Inc. But as retailers began automating the process, the costs have plummeted. She estimates that retailers now save 73% of the cost of a return in an automated system compared to handling returns manually. "It is still expensive, but it averages out to about $8.69 per return."
Now retailers and their vendors are developing new and potentially profitable ways of dealing with returns. Genco, a Pittsburgh-based distribution company, is testing new methods of disposing of this merchandise, which often cannot be returned to the manufacturer or restocked in a client's stores.
The latest wrinkle is the online auction, where retailers can offer bulk merchandise to a worldwide audience, and get higher prices for the goods. And, in the case of smaller quantities, they can go directly to consumers on auction houses like eBay.
According to Pete Rector, senior vp of Genco, so-called reverse logistics has boomed over the past decade,