Basics make perfect

Fancy a visit to the store-of-the-future? It's nicely decorated, and your shopping cart computer displays promotional items and your shopping history (by checking the transactions on your RFID-enabled card) as you stroll the aisles. Digital signs change to display information based on your personal interests, as the RFID device passes displays and transmits data from your previous shopping experiences.

But what you really wanted was a bottle of your favorite orange juice and it's not in stock. You turn away from the fancy flashing displays and head for the nearest convenience store, grab a bottle of Mr Juicy and slap your Octopus card against the touch-processor. Gau deem.

The three basic needs

With more technologies available in the market designed to enhance customer experience, more retailers are testing and introducing these new and fancy technologies. However none of these advanced technologies and customer-intimate services matter, if they don't address customers' basic needs, according to a January 2006 Gartner report: "Let your customers help design your technology-enabled store of the future".

The report said that customers have only three basic needs: having the product available, having the product easy to find and making checkout fast and easy. If these basic needs are not addressed, even advanced technologies "allow retailers to cut cost or to enhance productivity, they will fall short," said the report.

"This is why we believe that these fundamental promises are what should guide retail store technology investments," the report stated. "Sophisticated new technologies should not be focused on delivering sophisticated store experiences, but on meeting customers' most-basic needs."

Hong Kong-based retail food company Fairwood has, in the past few years, established new business and IT strategies to meet the first two major customer needs: ensuring products are available and making checkout faster and easier.

"Fairwood established a new business focus three years ago, to be become the preferred fast food chain in Hong Kong," said Jackson Tse, senior manager, management information system. "To align with this business objective, IT has had to make changes accordingly."

The new IT roadmap includes four different stages, starting from enhancing its point of sales (POS) system to capture data for market analysis, followed by upgrading network infrastructure, then an ERP revamp, and lastly, developments in human resource management systems.

Making checkout faster and easier

One of the new major roles of IT in Fairwood is to enhance the front-end experience for customers during payment.

"We [deployed the] Octopus [payment system] a few years ago, making payment much easier and faster, which is essential for the fast food business," said Tse.

According to Gartner's report, contactless payment like Octopus has a moderate effect on ROI. But the stored-value card has also demonstrated a positive effect on the overall customer experience, as well as productivity by speeding up transactions. The system also builds a foundation for the company to collect market information to develop loyalty programs.

Fairwood has also expanded its business in party catering, which is a seasonally-based service. To capture business during the peak seasons, the company set up an IP-based unified communication system from Cisco to replace its traditional PBX fixed-line system.

The deployment of the IP-based communication system has enhanced its customer catering hotline services significantly during the recent festive seasons of Christmas and Chinese New Year, said CK Ng, executive director of Fairwood.

"The company's revenue in catering services during the festive season increased by 40 percent in 2006, as compared to 2005," he said.

The growth was partly due to faster response in its catering hotline service. Ng said the traditional PBX system required extra charges for additional hotlines to cope with the festive season. The company also needed to rely on the service provider to set up the system. The IP-based system allows Fairwood to set up a catering hotline easily and to retain customers from reducing missed calls, he said.

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