BrainTrust Query: Why is computer-based ordering suddenly an in-demand technology application?
Due to the state of the economy, retailers are scrutinizing technology solutions more closely this year to determine which applications will provide the best benefits for their stores. According to the 2009 Supermarket News 15th Annual State of the Industry Report on Supermarket Technology, food retailers ranked computer-based ordering first for which new applications they will either test or launch in 2009, tying with trade promotion management at 16 percent.
According to the report, computer-based ordering also ranked first in 2008, at 17 percent, for new applications that were either tested or launched. Hannaford was cited as a retailer that successfully rolled out a computer-based ordering system across its chain last year. To date, the retailer has reduced out-of-stocks up to 70 percent in many of its stores.
This trend is interesting because the concept of computer-based ordering and its pioneering technology has been around for more than 20 years. Since reducing out-of-stocks is an operational imperative, one would expect computer-based ordering solutions to be deployed universally by now. Instead, only a few retailers have crossed the chasm from manual to automated store ordering. From what we've seen, the main reason that retailers still remember early computer-based ordering failures, while others determined long ago that the effort was too great.
However, retailers in addition to Hannaford that have taken the leap and successfully rolled out computer-based ordering systems have reported rewards including 60 to 80 percent reductions in out-of-stocks and 25 to 40 percent reductions in store inventory. They have also been able to process 98 percent of their order lines automatically.
Discussion Questions: Do you see computer-based ordering being broadly adopted among retailers at this point? Is it ready for "prime time"? How would you weigh the technology's benefits and weaknesses?