Presents The Canadian Retail Technology Survey

20
Platinum Sponsor Presenters Gold Sponsors Retail Council of Canada in conjunction with J.C. Williams Group The Canadian Retail Technology Survey Presents

Transcript of Presents The Canadian Retail Technology Survey

Page 1: Presents The Canadian Retail Technology Survey

Platinum SponsorPresenters Gold Sponsors

Retail Council of Canadain conjunction with J.C. Williams Group

TheCanadian Retail

Technology Survey

P r e s e n t s

Page 2: Presents The Canadian Retail Technology Survey

2

Retail Council of Canada and J.C.Williams Group recognize that timeshave never been more challenging for

retailers in Canada. Propelled by an increase inmergers and acquisitions, consolidations, new storeentries from abroad and multi-channel selling, ourretail landscape is constantly shifting.

Against this backdrop of ceaseless change,we askedthe question: How can technology help retailers inCanada stay competitive?

We already know that technology has had a signif-icant impact on retailing. Retailers large and smalldepend on technology to check out customers,order products and manage inventories by SKU.Technology provides retailers with the tools toautomate business processes, analyze performanceand manage relationships with customers.

More recently, the Internet has emerged as a tech-nology that has enabled a series of opportunitiesfor retailers. Information is available in real time,and companies can communicate internally andexternally, anytime and anywhere. Retailers canplace information about their stores, products, andphilosophies on the Web, sell online, or drive trafficto other channels.

The Internet also provides the backbone for retailersto run remote applications, making it possible tooutsource the operation of core applications. Andit can provide the foundation to communicatewith business partners, driving costs from thesupply chain.

THE CANADIAN RETAIL TECHNOLOGY SURVEY

Table ofContents

1.0 Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

2.0 Research Methodology . . . . . . . . . . . . . . . . . . .4

3.0 Summary and Key Implications . . . . . . . . . . . . . .5

4.0 Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

5.0 About Retail Council of Canada and J.C. Williams

Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19

© R e t a i l C o u n c i l o f C a n a d a

The Canadian Reta

1.0 FOREWORD

Page 3: Presents The Canadian Retail Technology Survey

3

Clearly, technology plays a commanding role intoday’s business world. But are retailers in Canadamaking the fullest use of it? Are they investingenough? Which applications are providing benefits,and which are disappointing? Are our retailers usingnew and emerging technologies to compete? Howare they using Internet-based technologies? Are theygetting the benefits from outsourcing applications, oris it all hype?

Do the answers vary by size of retailer? This questionis particularly important since technology suppliersoffer different solutions to retailers of different sizes.

The results of this survey offer mixed news. Moreretailers in Canada are understanding the importanceof information technology (IT), and are increasingtheir investments and focus on emerging technologies.That is great news. But is it enough to thrive in thiscompetitive environment?

Global retailers are using technology as a competitiveadvantage and are changing the rules. For example,Zara’s technology drives its ability to change its in-store stock every two weeks. An item of clothing cango from concept to cash register in five weeks. LeeScott, President and CEO of Wal-Mart Inc., reportsthat the chain is focusing on maintaining an in-stocklevel unequalled in the retail world1, driven by supply

chain management, with a heavy investment andfocus on IT.

Visionary Canadian retailers like Mark’s WorkWearhouse and Danier Leather are investing in newand emerging technologies to gain a competitiveedge. Can other retailers in Canada compete withoutmore investment and focus on technology?

This survey, the first of its kind in Canada, posedtechnology-focused questions to all sizes of retailers.The results are meant to help retailers benchmarktheir use of technology against other retailers inCanada and around the world.

The survey is also designed to help retailers identifyopportunities to use technology more effectivelywithin their organizations. Plus, it will help technologysuppliers determine what is working and what is not,and develop solutions to meet the evolving needs ofCanadian retailers.

We wish to thank our Platinum sponsor, CanadaPost, and our Gold sponsors, IBM Canada Ltd. andJDA Software Canada Ltd., who provided the meansto conduct the survey and develop this report. Wealso wish to thank the retailers who took the time toprovide us with their valuable responses to the surveyquestions.

THE CANADIAN RETAIL TECHNOLOGY SURVEY

Diane J. Brisebois Rena GranofskyPresident and CEO Senior Partner,TechnologyRetail Council of Canada J.C.Williams Group

il Technology Survey

1.0 FOREWORD

Page 4: Presents The Canadian Retail Technology Survey

4

The Canadian Retail Technology Survey is the com-bined effort of Retail Council of Canada and J.C.Williams Group. J.C.Williams Group fielded the

survey from June 1 to July 6, 2001, to 250 retailers. Atotal of 70 retailers responded to the online survey.Forty-five respondents were qualified to participate in thefinal report, including 19 large retailers with revenues ofmore than $200 million, nine mid-sized retailers withrevenues between $30 million and $200 million, and 17smaller retailers with revenues between $2 million and$30 million annually. Included in our respondents arefive of Canada’s top 10 retailers.2

The majority of the respondents (37 of 45) are specialtyretailers, and the remaining eight are department stores,

mass merchandisers, or other store formats. The resultsinclude all retail categories, with the exception of restau-rants.

An independent market research firm posted the ques-tionnaire online and tabulated and aggregated theresponses. J.C. Williams Group conducted the finalanalysis and determined key findings, observations andthe impact on the retail industry.

For additional information about the survey,contact Rena Granofsky of J.C. Williams Group at(416) 921-4181, or by e-mail at [email protected].

THE CANADIAN RETAIL TECHNOLOGY SURVEY

2.0 RESEARCHMETHODOLOGY

Size of respondents

Page 5: Presents The Canadian Retail Technology Survey

5

The retail landscape is evolving at an incrediblyrapid pace. Canadian retailers face significantcompetition not only from local retailers, but

also from U.S. and global retailers entering Canada.Add to this the global competition brought about bythe Internet.

To help meet these challenges, Canadian retailers areincreasing their information technology (IT) budgets,elevating the role of IT in their organizations, andfocusing on new and emerging technologies.They aresetting up their technical infrastructures and imple-menting multi-channel strategies.

But they still have miles to go.Their IT budgets are stillrelatively low when compared to other global retailers,and especially when compared to other industries.Most are disappointed in many of their current appli-cations, most notably Customer RelationshipManagement (CRM). They have many challengesahead in terms of technically supporting a multi-channelstrategy.They are shying away from major opportunitieslike outsourcing. And only the larger retailers arefocusing on vendor collaboration.

Canadian retail is structurally different from retail inmany other countries, most notably the U.S. Retail inthis country is concentrated primarily in only 10major centres, and the economies of scale are often notavailable to support larger investments in IT.Yet giventhe intense competition, Canadian retailers have nochoice but to develop technology-based solutions thatprovide a competitive edge.

To deal with these issues, Canadian retailers will haveto focus on two areas: retailer and supplier communitypartnerships, and a holistic techno-cultural shift.

Retailer and supplier community partnerships

Retailers in Canada will have to be extremely smartand efficient when developing technology solu-tions. The solutions must be extremely cost-effectiveand enable a competitive edge.They must also takeadvantage of new and emerging technologies inorder to help attract and retain employees.

Retailers cannot develop these solutions withoutthe help of technology suppliers. To truly supportretailers, technology suppliers will have to focusmore on understanding retailers’ issues, and ondeveloping solutions that leapfrog the competition.

All levels of employees within these supplier organ-izations – from salesperson to implementation teamto support team – will need to understandand speak the language of retail in order to helpretailers realize the benefits of implementing theirsolutions.

Vendor collaboration is a prime example of a newtechnology-based opportunity that can significantlyhelp Canadian retailers. However, it is also expensiveto implement. A retailer and supplier communitypartnership can bring the collective brainpowertogether to develop cost-effective solutions,amortized over the community at large.

Holistic techno-cultural shift

Technology must rise to the forefront of the retailculture in order for it to truly impact and enableorganizations. IT needs to be part of every strategicdiscussion, and the head of IT needs to be part of theexecutive committee.

THE CANADIAN RETAIL TECHNOLOGY SURVEY

3.0 SUMMARY ANDKEY IMPLICATIONS

Page 6: Presents The Canadian Retail Technology Survey

6

Technology needs to be seen as an investment, not anexpense. It is an enabler for strategies that can changethe retail paradigm, and propel retailers ahead of thecompetition. We are recommending a cultural shift,one that places technology at the top of the Canadianretailer’s arsenal.

But for IT to truly provide support to all departmentswithin the retail organization, many IT professionals,like their technology suppliers, will need to understandand speak the language of retail better.They will thenbe better equipped to help their organizations usetechnology effectively and competitively.

Canadian retailers are planning to significantly increasetheir IT budgets in 2001 (by 45% over 2000) from anaverage of 1.3% of sales volume to 1.8%.This is greatnews. However, this projection lags behind the averagebudget of 2% for global retailers.3 And retail IT budgetscontinue to pale in comparison to the average ITbudget of 8% of revenues for all industries.4

The budget increases differ by size of retailer.Medium-sized and smaller retailers are each planningto significantly increase their IT operating budgets in2001. Medium-sized retailers will jump 54%, from1.7% of revenues in 2000 to 2.6% in 2001. Smallerretailers will increase their budgets a full 100%, from1% to 2%.

Large retailers, however, are lagging behind, staying flatat only 1.2%. Is it possible for these Canadian retailersto continue to use technology as a competitive advan-tage when large global retailers invest on average 2% oftheir revenues in technology? And is there enoughbudget available to continually invest in emerging tech-nologies in order to attract and retain IT professionals?

Meanwhile, Canadian consumers are learning aboutthe role of technology in other industries, where ITbudgets are, on average, 8% of revenues.5 They thenexpect similar technological advancements from theirretail experiences.

Because of all this, Canadian retailers, especially thelarger ones, are technically disadvantaged with theircontinued lower investments in technology.

But the lower investment by Canadian retailers is notsurprising, given that the number one issue of Canadianretail IT departments across the board is cost pressures.Investments in IT will continue to be a challenge asretailers first allocate funds to other strategic initiatives

THE CANADIAN RETAIL TECHNOLOGY SURVEY

3.0 SUMMARY ANDKEY IMPLICATIONS

Operating budgets:Actuals for 2000 and planned for

2001

IT budgets are up, but is itenough?

Page 7: Presents The Canadian Retail Technology Survey

7

as they struggle to refresh and re-invent themselves inthe wake of global competition.

Retailers in general need to be educated about the roleof technology in their strategic initiatives, and in main-taining customer relationships and service levels.The ITdepartment needs to communicate effectively withother departments in the retail organization and addressthis issue.

Retailers will also need to develop strong partnershipswith their technology suppliers, and work together todevelop cost-effective solutions that are appropriate forCanada.

The IT Department is gaining prominence withinretail organizations overall. Two-thirds of our respon-dents say that the person responsible for IT predomi-nately reports to the President/CEO.This is especiallytrue for large and smaller retailers.

This Canadian trend parallels the global trend andallows Canadian retailers the opportunity to bemore competitive with retailers around the world.

Why is this important? Not too long ago, the headof IT typically reported to the head of finance. IToften first served the finance department’s needs,

THE CANADIAN RETAIL TECHNOLOGY SURVEY

Top five issues of the IT departmentAll

1. Cost pressures

2. Finding and retainingstaff

3. Rapid change oftechnology

4. Role of IT within theorganization

5. Lack of appropriatesolutions

Large1. Cost pressures*

1. Finding and retaining staff*

2.Rapid change of technology

3. Role of IT within theorganization

4.Lack of appropriate solutions

Medium1. Role of IT within the

organization2. Cost pressures

3. Rapid change of technology

4. Finding and retaining staff

5. Lack of appropriate solutions

Small1. Cost pressures

2. Role of IT within theorganization

3. Lack of appropriate solutions

4. Finding and retaining qualitystaff*

4.Rapid change of technology*

3.0 SUMMARY ANDKEY IMPLICATIONS

Whom head of IT reports to

IT departments are gainingground

* Denotes ties

Page 8: Presents The Canadian Retail Technology Survey

8

and only later, as time and budget permitted, the needs of the rest ofthe company.

As IT representatives join the executive committees of retail organizations,technology has the opportunity to become part of the corporate strategyand overall offering.

THE CANADIAN RETAIL TECHNOLOGY SURVEY

3.0 SUMMARY ANDKEY IMPLICATIONS

But do the IT representatives withinretail organizations have the skills tospot opportunities to use technologyeffectively? More than one-half ofrespondents have technology back-grounds, and only two-fifths haveretail and/or other backgrounds.

It is essential that all IT staff under-stand the retailer’s business in order toprovide support and spot opportunitiesto enhance the retail offering throughtechnology. Many of these professionalswill need to be trained on the basics ofretail, and on how to use technologyto impact profitability within theorganization.

Technology infrastructure

Before retailers can focus on new andemerging technologies, they needto ensure that their technology infra-structure is well set up and the basicsare in place.

The good news is that large and medi-um-sized retailers in Canada arealready fairly well set up. Many smallerretailers, however,will first have to allo-cate their budgets to technical infra-structure and basic software applica-tions. In fact, one-quarter of them donot even have basic POS applications.

Current technology infrastructure

How are Canadianretailers allocatingtheir technologybudgets?

Page 9: Presents The Canadian Retail Technology Survey

9

Vendor collaboration

One of the biggest opportunities for benefits lies in com-munication and partnership with vendors. Vendorcollaboration promises to drive costs from the supplychain, while reducing out-of-stocks.

Large Canadian retailers in our survey seem to under-stand the potential of vendor collaboration. They viewimproving collaboration with business partners as theirtop priority, and most plan to implement business-to-business (B2B) applications, Extranets, and CPFR(Collaborative Planning, Forecasting andReplenishment) by 2003. But will they have the budgetsavailable to implement?

Vendor collaboration is a much lower priority for mediumand smaller sized retailers.This is not surprising given theIT investment that will be required to implement appli-cations to support vendor collaboration.

Retailers and their technology suppliers will need towork together to develop cost-effective solutions thatcan deliver benefits to all sizes of retailers.

New and emerging technologies

For many years, Canadian retailers as a group havelagged behind their U.S. counterparts in the use ofleading edge technology. Yet these technologieshave the potential to provide Canadian retailerswith a significant competitive edge. Also, the use ofleading edge technologies may help in retainingstaff, which is an issue for large IT departments.(Refer to the chart “Top Five Issues of the ITDepartment” on page 7.)

There are many new and emerging technologiesplanned to be implemented by respondents by2003, including hardware devices such as PersonalDigital Assistants (PDAs) and kiosks, applicationsbuilt in Java, and network solutions supported byRF wireless and other wireless Local AreaNetworks (LANs). In fact, of all the new andemerging technologies planned, wireless LANs areexpected to receive the most focus of our respon-dents over the next one to two years.

THE CANADIAN RETAIL TECHNOLOGY SURVEY

3.0 SUMMARY ANDKEY IMPLICATIONS

All1. Maximizing current

technologies2. Implementing applications

new to the company3. Networks &

communications withinthe organization*

3. Managing PCs within theorganization*

4. Implementing new &emerging technologies

Large1. Improve collaboration with

trading partners2. Maximizing current

technologies3. Implementing applications

new to the company

4. Implementing new &emerging technologies

5. Implementing/enhancingCRM

Medium1. Managing PCs within the

organization*1. Networks & communications

within the organization*

2. Maximizing currenttechnologies

3. Implementing applicationsnew to the company

4. Implementing new &emerging technologies

Small1. Maximizing current

technologies2. Managing PCs within the

organization*2. Networks &

communications withinthe organization*

3. Implementing applicationsnew to the company

4. Implementing/enhancingCRM

Top five priorities of the IT department

* Denotes ties

Page 10: Presents The Canadian Retail Technology Survey

10

Software applications

Software applications are another key area of focus.Canadian retailers are generally ho-hum about thebenefits they provide, yet these applications have thepotential to help retailers get all the basics of retailright i.e., product, price, quantity, location, timing andservice.

The top application mentioned for increasing sales anddecreasing expenses beyond expectations is the datawarehouse. However, only one-third of medium andsmaller-sized Canadian retailers use this technology.This is not surprising since data warehouses are typi-cally expensive and complicated to implement and use.Technology suppliers will need to work in partnershipwith these retailers to develop simpler and more cost-effective versions.

Customer Relationship Management applicationshave yet to reach their potential. Our respondentsuniversally rate CRM as the least effective applicationoverall when rated against expectations.

Retailers need applications that track customer inter-actions across all channels and help them to understandwho these customers are and what they want. Ideally,these applications should track all interactions fromentry into the channel to end use of the product.These applications should help turn customers intoloyal advocates. But they must also be simple to useand cost-effective to implement.

THE CANADIAN RETAIL TECHNOLOGY SURVEY

3.0 SUMMARY ANDKEY IMPLICATIONS

Applications’ effectivenessfor increasing sales

New and emerging technologies in use or planned

Page 11: Presents The Canadian Retail Technology Survey

11

Retailers and technology suppliers need to focus onCRM, and develop appropriate applications for eachsize of retailer that are affordable and truly enhance therelationship with the customer.

Our respondents are unanimously moving towards amulti-channel strategy. In fact, most will have a Website by 2003, even though only 3% of their revenuesare currently derived from online sales. This is greatnews, as research continues to prove that this strategyincreases overall revenues and transaction sizes.6

Multi-channel is now the reality of doing business inretail, and technology is needed to support it.

THE CANADIAN RETAIL TECHNOLOGY SURVEY

3.0 SUMMARY ANDKEY IMPLICATIONS

Respondents who currentlyhave a Web site or have plans

for implementing one

Multi-channel is alive andwell and living in Canada

Applications’ effectivenessfor decreasing expenses

Page 12: Presents The Canadian Retail Technology Survey

12

Our respondents say that Web sites are being set upwith the multi-channel strategy in mind.The primaryobjectives of the corporate Web sites of our respondentsare to drive traffic and increase brand awareness.

To drive traffic to other channels, the informationprovided on the Web site about the other channelsneeds to be accurate. Products, pricing, promotionaland customer information all need to be up to date.What does this imply for technology? By definition,applications will have to be seamless across all channels.And the related business processes will also have tospan the channels.

Our respondents are well on their way to integratingtheir business processes across all channels, but they stillhave a fair way to go. Key opportunities for integrationinclude returns processing, picking up merchandiseat the store when ordered in another channel, and aconsolidated view of the customer across all channels.

The respondents report that they will specifically besearching for solutions to handle returns and orderstatus over the next one to two years. Suppliers have anenormous opportunity to be creative in the solutionsthey offer.

Retailers are also placing a major emphasis on brandawareness. The bar needs to be raised on the Webexperience, supported by appropriate technology, toreinforce the retailer’s brand. Since retailers’ brands areunique, their technology solutions will have to becustomizable. There cannot be a one-size-fits-allsolution.This poses a major challenge for retailers andsuppliers alike.

THE CANADIAN RETAIL TECHNOLOGY SURVEY

3.0 SUMMARY ANDKEY IMPLICATIONS

Primary objectives ofrespondents’ Web sites

Page 13: Presents The Canadian Retail Technology Survey

13

3.0 SUMMARY ANDKEY IMPLICATIONS

Integration level between channels

THE CANADIAN RETAIL TECHNOLOGY SURVEY

Page 14: Presents The Canadian Retail Technology Survey

14

Outsourcing technology functions is simply nothappening in the Canadian retail industry, at leastnot to the extent that it could or perhaps should.It is limited primarily to network managementand, in e-retailing, to site maintenance. Thisseems to be a global trend since only 10% ofglobal retailers indicate they have definite plansto outsource over the next few years, down from34% in 2000.7

Our respondents overwhelmingly want to out-source when it is not their core competency. Itallows them to focus on what they do best, i.e.,retailing.

THE CANADIAN RETAIL TECHNOLOGY SURVEY

3.0 SUMMARY ANDKEY IMPLICATIONS

IT functions currently outsourced or planned

Outsourced B2C functionsOutsourcing: A non-event

Page 15: Presents The Canadian Retail Technology Survey

The key issue is cost. Our respondents universally viewoutsourcing costs as being prohibitive. Smaller retailersalso feel that there are insufficient solution options thatare appropriate for them.

Outsourcing can provide value and benefits to retailersbeyond cost savings. Potential benefits include freeingup resources, improving customer service levels, keepingup with new and emerging technologies, and sharingthe business and technology risk. Outsourcing also

addresses the issue of scarce resources, a primaryconcern of large and medium-sized Canadian retailers.(Refer to the chart “Top Five Issues of the ITDepartment,” page 7.)

The onus is on suppliers to simplify pricing modelsand develop cost-effective solutions for all sizes ofretailers.They need to partner with retailers, addressingtheir concerns, exploring potential benefits and justi-fying payback.

15THE CANADIAN RETAIL TECHNOLOGY SURVEY

Issues pertaining to outsourcing

3.0 SUMMARY ANDKEY IMPLICATIONS

Page 16: Presents The Canadian Retail Technology Survey

16THE CANADIAN RETAIL TECHNOLOGY SURVEY

3.0 SUMMARY ANDKEY IMPLICATIONS

What’s next?

Technology continues to evolve and to offer spectacularopportunities for raising the retail bar. The challengefor IT departments is to search for ways to use tech-nology as a competitive advantage, and educate the restof their organizations about the payback and businessbenefits.

This will require a techno-cultural shift. IT needs aspot at the executive table, and the organization needsto concentrate on using technology as part of the over-all retail offering.

Canadian retailers also need to develop true partner-ships with their technology suppliers. First, they mustwork together to maximize the benefit from their cur-rent applications. Next, they must develop communi-ties of retailers and suppliers to re-design applicationsand enhance business processes using new and emerg-ing technologies. These applications will need to becost-effective and strategic in helping the retailer gain acompetitive edge.

Emphasis should be placed on vendor collaboration,data warehouses and CRM, all applications that havesignificant potential to help the Canadian retailerleapfrog the competition. The benefits of outsourcingmust also not be overlooked.

Page 17: Presents The Canadian Retail Technology Survey

17THE CANADIAN RETAIL TECHNOLOGY SURVEY

BluetoothBluetooth is a telecommunications industry specification that describeshow devices can interconnect with each other using a short-range wirelessconnection.

Bricks and Mortar StoresA physical retail location that sells products and/or services. The retail loca-tion is made of "bricks and mortar" and is touchable by the customer.

Bricks and Mortar (B&M) Traffic Counters and ConversionApplicationsAn application that tracks traffic into the bricks and mortar stores andmarries it with sales information to determine conversion rates. Analysiscan help schedule employees in order to increase revenues.

Business-to-Business (B2B)Business-to-Business refers to transactions between businesses usingInternet technology.

Business-to-Consumer (B2C)Business-to-Consumer refers to transactions between businesses and con-sumers using Internet technology. B2C includes Web Store, or Internet-based online sales.

ChannelA retail channel is an outlet that consumers can access in order to purchasethe retailer’s products and/or services. Examples include mail order, bricksand mortar, and the Internet.

CPFR Systems (Collaborative Planning, Forecasting andReplenishment)CPFR creates collaborative relationships between buyers and sellersthrough co-managed processes in order to share information. By integrat-ing demand and supply side processes, CPFR intends to improve efficien-cies, increase sales, reduce fixed assets and work capital, and reduce inven-tory for the entire supply chain, while satisfying consumer needs.

CRM (Customer Relationship Management) CRM is an information technology industry term for methodologies,strategies and software that help an enterprise organize and manage cus-tomer relationships, e.g. tracking customer transactions to conduct directmailings to targeted customers.

Data WarehousesA sophisticated application that ideally consolidates all performance infor-mation into one repository of information, separate from the operationalsystem. Tools are often provided to mine the information.

Department StoreA retail organization that carries several lines of merchandise, all of whichare organized into separate departments for the purpose of promotion,service, accounting and control.

E-Commerce This is short for electronic commerce. It refers to doing business online,including buying and selling products and services over the Internet.

Emerging TechnologyNewly recognized technology used to create, store, retrieve, exchange anduse information, e.g. wireless Internet access.

E-RetailingRefer to Business-to-Consumer (B2C).

Extranet A private network that uses the Internet and password security to securelyshare part of a company’s information or operations with suppliers, ven-dors, partners, customers or other businesses.

Information TechnologyInformation technology can be defined as all forms of technology used tocreate, store, exchange, and use information in its various forms.

InfrastructureThe physical hardware used to interconnect computers and users. It isviewed as everything that supports the flow and processing of infor-mation.

Integrated SystemsAn integrated system solution is one where the applications automaticallypass information between them, without the need to separately re-keyinformation.

IntranetAn in-house Web site that uses the Internet to serve employees of theorganization. The general public does not access an Intranet site. Oftenretailers will use an Intranet site to communicate with store locations acrossthe country.

Inventory ManagementThis application includes all processes that allow you to manage inventoryeffectively, including purchase order and (elements of) supply chain man-agement, price, cost and promotion management, and inventory assortmentmanagement.

IT Operating Expenses IT operating expenses include costs for hardware, software/enhance-ments, depreciation, telecommunications, dedicated IT personnel,computer supplies, maintenance and support, and training and imple-mentation.

Java-Based Applications Java is a programming language that can be run on any kind of processorplatform and is hardware independent.

KiosksA small self-standing structure (often including a computer and a touchscreen) that can be used to display and capture information.

Local Area Network (LAN)A group of computers and accessories, i.e., printers and scanners, that sharea communication line and resources of a single processor within a smallgeographical area, i.e., an office building.

4.0 GLOSSARY

Page 18: Presents The Canadian Retail Technology Survey

18THE CANADIAN RETAIL TECHNOLOGY SURVEY

REFE

REN

CES

1 Wal-Mart Inc. 2001 Annual Report2 ROB Magazine, July 20013 RetailTech & PricewaterhouseCoopers,“The State

of Retail Technology 2001”4 ibid5 RetailTech & PricewaterhouseCoopers,“The State

of Retail Technology 2001”6 J.C.Williams Group, National Retail Federation,

and Bizrate.com;“Channel Surfing 2000”7 RetailTech & PricewaterhouseCoopers,“The State

of Retail Technology 2001”

Mass MerchandiserA retail organization that sells a wide range of merchandise at popular prices.

Microchip (Smart) Cards A plastic card with an embedded microchip that can be loaded with data and usedfor telephone calling, electronic cash payments, loyalty programs and other appli-cations.

Multi-channel A retailer that sells through traditional channels as well as online. Traditionalchannels include bricks and mortar stores, catalogues, phone orders and/or adirect sales force.

Order Status TrackingAn application that reports on the order status to the customer.

Outsourcing Contracting an outside company to perform services for your organization. Forexample, organizations may outsource their help desk support to an outside com-pany.

Personal Digital Assistant (PDA)A small mobile hand-held device that wirelessly provides computing, informationstorage, and retrieval capabilities for personal or business use. Features ofteninclude calendars, address books and e-mail.

Planning and Assortment Planning Planning applications allow the retailer to create sales and inventory plans for eachstore. Assortment planning provides tools to build the assortment within amerchandise category.

Point of Sale (POS)The POS module typically refers to all in-store systems. In-store systems are reallymade up of two components, i.e. POS for checkout applications, and an ISP(In-store Processor) for all other applications.

Radio Frequency (RF) Wireless DeviceA device that uses radio frequencies to transmit data wirelessly from one deviceto another. For example, hand-held units used to conduct physical inventoriesand cordless phones.

Returns ProcessingThis is often referred to as "reverse logistics" and handles the flow of returnedmerchandise to the retailer or designated destination, as well as related payment.

Specialty RetailerA retail organization that handles a limited variety of goods.

Supply ChainThe supply chain is focused on all the steps needed to deliver the merchandiseinto the retail store, from manufacturer through to supplier, through a retailer’swarehouse or distribution facility, through to the store.

Vendor Collaboration Retailers who collaborate with vendors share information in order to co-manageinventory. For example, retailers which openly share sales and inventory infor-mation with vendors.

WirelessDevices or communication devices that do not require wires to transfer infor-mation, e.g. a cellular phone.

4.0 GLOSSARY

Page 19: Presents The Canadian Retail Technology Survey

19THE CANADIAN RETAIL TECHNOLOGY SURVEY

5.0 ABOUTRETAIL COUNCIL OF CANADA ANDJ.C. WILLIAMS GROUP

RETAIL COUNCIL OF CANADA

J.C. WILLIAMS GROUP

Retail Council of Canada

Retail Council of Canada (www.retailcouncil.org) has been the voice of retail in Canada since1963. RCC is a not-for-profit, industry-funded business association whose more than 9,000members comprise all retail formats, including national and regional department stores, massmerchants, specialty chains, independent stores and online merchants. More than 90% of RCC’smembers are independent storeowners. Collectively, RCC’s members account for more thantwo-thirds of Canada’s total general merchandise sales.

RCC’s members represent an industry that employs more than 1.7 million Canadians and gen-erates sales of more than $277 billion a year.

J.C. Williams Group

J.C.Williams Group is Canada’s, and one of North America’s, leading retail consulting, marketing,and research firms.We focus only on retail, or suppliers to the retail sector.We offer a broad varietyof retail consulting services including market research, retail strategy, retail operations and effi-ciencies, marketing, branding and communication strategies, systems and information technologymanagement, e-commerce, real estate, human resources (including internalbranding), and education.

We have offices in Toronto and Chicago, and are the Canadian partners in the Ebeltoft Groupof international retail consultants. Please refer to our Web site at www.jcwg.com for furtherinformation on J.C.Williams Group.

Page 20: Presents The Canadian Retail Technology Survey

Retail Council of Canada121 Bloor Street East, Suite 1210

Toronto, ON M4W 3M5Phone: (416) 922-6678

Toll Free: 1-888-373-8245Fax: (416) 922-8011

Web: www.retailcouncil.org