Customer Solution Case Study
/ / Health Food Store Trades Long Inventory and Purchasing Hours for Better Stock Knowledge Efficiency
Overview
Country or Region: United States
Industry: Retail
Customer Profile
In business since the 1970s, HealthWay Nutrition Center credits staff’s strong product knowledge for continued sales growth.
Business Situation
Old electronic cash registers slowed tasks and kept almost no records for automated stock replenishment, tax filings, or building a customer database.
Solution
Microsoft® Business Solutions Retail Management System, along with retail-specific modules from New West Technology and Retail Realm, sped up routine tasks and captured data for later use.
Benefits
n Solution cuts purchasing time almost in half
n Inventory tracking enables exact re-ordering without recounting the shelves
n Capturing customer name and address information will feed mailings
n Automated reporting saves time and reduces errors
n Remote access allows owner to manage the business from anywhere via the Web / “We can get away more and still mind the store. As long as I have an Internet hookup, I can be anywhere.”
Dennis Giles, Owner, HealthWay Nutrition Center
As the seasoned owner of HealthWay Nutrition Center in Medford, Oregon, since 1982, Dennis Giles had increased its product offerings, built customer loyalty, and raised revenues. The store ran smoothly, but it also ran his life and schedule. With old cash registers, spotty reports, and no ability to remotely access the store’s data, he found routine tasks took too long and consumed his time. Giles’ introduction to the retail system that would eventually buy him valuable hours came from an unusual source—his wife’s store. For years, Pam Giles had used Microsoft® Business Solutions Retail Management System to smoothly manage her gift shop. Today, touch screens and nearly instant credit authorizations speed checkouts, staff time in stocktaking is cut nearly in half, automated purchasing is faster and easier, and neat reports even tell Giles more about his customers.
Situation
HealthWay Nutrition Center in Medford, Oregon, began when health-food awareness burgeoned in the mid 1970s. When Dennis Giles bought HealthWay in 1982, he made sure that staff product knowledge and ongoing communication with customers would constantly expand revenues.
But the nutrition industry’s many products and ever-changing suppliers became a challenge. And HealthWay's store equipment had aged; one electronic cash register was 10 years old, and the other was older.
HealthWay encompasses 1,200 square feet, of which 700 is retail space, so owner Dennis Giles makes sure that every inch and every minute help sell his 4,000 items through two busy checkout lanes. Daily transactions often number as high as 120, and staff serve more than 200 customers on "Discount Tuesdays.” Gross sales per square foot are enviable.
Giles says, “Revenues have been good, but I was throwing too many hours at tasks. Electronic cash registers gave us basic categories, not exact ones. We knew we’d sold a bottle of vitamins for thirty dollars, but not which bottle. We had no scanners. Physical inventory was so difficult that we only did it once a year, so I was never sure what I had. If something disappeared, I didn’t know where in the chain to look or what holes to plug.”
Giles credits his exemplary staff and long-time clientele for near-zero product loss from shrinkage and says, “Maybe we lose $80 a year in bad checks,” he adds.
But without records, discrepancies became untrackable—such as when bottles broke or products got old, or only part of a shipment arrived, or when staff mistakenly rang up four items when five were sold. Months after taking inventory, Giles had no reliable way to know stock levels, except by frequent visual inspections.
Inexact inventory knowledge reduced purchasing accuracy, leading to over- and under-stocks. Buying from his biggest distributors took two hours a day. Receiving stock required more hours of unautomated record keeping.
But Pam Giles provided her husband a daily counterpoint. For years, she owned Cotton Tail Cottage, managing its records with the help of Microsoft® Business Solutions Retail Management System and its predecessor, QuickSell 2000. Pam spent much less time on comparable tasks, and reports and taxes printed out in crisp columns and sums. Moreover, Cotton Tail’s inventory was under tight management.
Solution
“I always saw that Pam kept tighter records than I could, no matter how long I worked. After seeing for years what Microsoft Retail Management System did in my wife’s store, there was no reason to check out any other retail system. I called Rick [Morrison] from Allied [Business Solutions] because Pam was very happy with his retail knowledge, smart ideas, and responsiveness."
Giles has high praise for Allied. “Rick set us up and trained us. He gets here in minutes if we need him, or he can go online to customize something or make system changes on the spot. If we’re out of town, Rick helps our staff. Allied proves that the sales-support model for Microsoft Retail Management System is ideal for retail. You get one nearby vendor who’s trained and experienced in retail hardware, software, and communications. No finger-pointing.”
Installing the System
Giles says, “Installation was a real piece of cake. After that, there was a learning curve because some staff had never used a computer. Now that’s smoothed out.”
HealthWay’s system includes touch-screens and handheld scanners for faster and more accurate transactions. The system's server has four hot-swappable SATA (serial advanced technology attachment) drives in a RAID 5 (redundant array of independent disks) configuration for easy backup and data security.
Saving Hours
But one of Giles' biggest time savers is the easy connection between OrderDog, the nation’s largest business-to-business exchange of nutrition and health-food products, and Microsoft Retail Management System. Richard MacKillop, Chief Operating Officer at OrderDog, describes the Microsoft retail solution as “probably the easiest-to-learn system that we interface with. And as a true [Microsoft] Windows® [operating system] solution—not an MS-DOS® [operating system] overlaid with Windows—we're sold on its database compatibility and stability."
“We followed the data protocols that Microsoft Retail Management System outputs,” says MacKillop, “so there can be direct data transfer from its purchase orders into OrderDog with minimal effort by users. All our capabilities are built on Microsoft technology—Microsoft SQL Server™ 2000, the Microsoft Windows Server™ 2003 operating system, the Microsoft Visual Studio® .NET 2003 development system, and Microsoft Internet Information Services (ASP.NET 1.1) to help ensure a smooth and trouble-free data exchange.”
OrderDog carries 150,000 unique stock-keeping units. If a primary distributor changes a price today, OrderDog immediately receives the change via EDI (electronic data interface), and it goes into OrderDog’s SQL Server 2000 database. When users log on, they see the new price and can easily import such record changes into Microsoft Retail Management System.
Greater Speed and Convenience
Giles and his staff also use a handheld scanner system from New West’s Mobile Suite that will enable them to track, adjust, and spot-check inventory on the floor. It will enable them to adjust prices and receive inventory with far fewer steps, once items have been entered in the system.
A customer loyalty program from Retail Realm of Lakewood, New Jersey, replaces the store’s old punch-card system and differentiates between regular-priced and sale-priced merchandise because the latter isn’t counted toward customers' eventual discounts.
Benefits
“The program (Microsoft Retail Management System) has any number of ways to help manage and control inventory to save me money—directly and indirectly,” notes Giles.
Purchasing Then and Now
“I used to only order weekly from one large supplier because it was so time-consuming. I spent ten hours a week in purchasing tasks. Now that’s down to nearly half,” he points out.
Because deliveries can take four days to arrive, Giles once risked running out of popular items. Now, easier purchasing gives him time to order more frequently and ensure more constant cash-flow and product supply.
He explains, “I also order merchandise more accurately because the system lets me know if I try to order things we still have or if I try to over-order. But we can override those warnings if we need to. In my system, I can also see OrderDog's current specials, and then bump up the quantities on those items. It’s all here on my screen.”
Giles creates purchase orders in Microsoft Retail Management System, and then visits OrderDog’s Web site to post them electronically. “Purchasing is very smooth,” observes Giles. “With Microsoft Retail Management System and OrderDog, it can be all electronic. No phones and no faxes, if you don’t want them. OrderDog provides nearly half my volume, but it’s also much easier now than before to order from all the small suppliers in this industry.”
“Microsoft Retail Management System also let me get Mercury Payments, a far more advantageous carrier for my credit cards. Mercury is very helpful, and I can see all my transactions online. And now customers can swipe their credit cards at both registers. Before, my staff had to swipe every card. Mercury Payment Systems is very helpful, and I can see all my card transactions.”
Freedom of Movement
“We can get away more and still mind the store,” says Giles. “As long as I have an Internet hookup, I can be anywhere. We know Microsoft Retail Management System now; we access it constantly through RealVNC, and we feel very confident of our new mobility. If there’s a hardware problem, Allied is nearby and can step in.”
To build more business for the future, Giles is now building up his customer database. “I can identify our top customers more easily, so I know who to pay attention to. Soon we’ll have nearly all the data we need to mail specific product news to specific audiences. Since we’re customer sensitive, knowing our customer base will be good for us.”
Giles now tracks his back-room stock and prints out a report each day on items sold the previous day. He separately tracks out-of-stock items and special orders that customers are waiting for.
Nutritional Advice for Retailers
Giles suggests other retailers not delay getting a modern retail system and notes, “Plan on taking some time to get your product database in, but that shouldn’t put you off.”
Because much of HealthWay’s purchasing previously went through OrderDog, Giles saved conversion time by pulling his old data down into Microsoft Office Excel® 2003 spreadsheet software. From these spreadsheets, Allied extracted the retail and wholesale prices and item numbers. “Without Microsoft data conformity, I would have had to go through every catalog,” says Giles. “But this way, I was able to view it. And it didn’t matter if one person had typed product names in upper case letters and another used lower case.”
Giles’ plans for ongoing automation include acquiring the Mercury gift card program. Discount Tuesday is such a hit that he is investigating getting a third register. And, with 5,000 customers in his database, Giles looks forward to targeted marketing.
Microsoft Business Solutions Retail Management System
Microsoft Business Solutions Retail Management System offers a complete store automation solution for small and medium-sized retailers, streamlining point-of-sale (POS), customer service, and store inventory management, and providing real-time access to key business metrics. Microsoft Retail Management System is a comprehensive solution for single-store and multi-store retailers that empowers independent proprietors, store managers, and cashiers through affordable and easy-to-use automation. Microsoft Retail Management System has the flexibility and scalability to grow with a retailer’s business. It works with the Microsoft Office System, Microsoft Windows Small Business Server, and leading financial applications to provide end-to-end support from the cash register to the back office.
For more information about Microsoft Retail Management System, go to: www.microsoft.com/pos