Are SA retailers keeping up with changing technology?

The retail sector has a long-standing reputation as being conservative in technology adoption, according to Gartner.

The research company cautions that retailers need to monitor trends and technologies, and time the introduction of new technology to their company.

Gartner`s report, "The Hype Cycle for Retail Technologies, 2003", states: "Much is changing in the retail sector. Retailers of all sizes are now realising that operational efficiency is not enough to compete. Effective IT solutions, or the lack thereof, can now be a survival issue in the fast-paced but low margin retail sector."

ITWeb polled several South African retailers to find out how they see the local market.

"We have a department assigned to investigate advances in the point-of-sale (POS) industry and they assess the trends every day," says George McKay, Pick 'n Pay`s Johannesburg area manager. "The reason for this being we want to be the leading retail group in POS and enhancing customer services."

By contrast, Shoprite`s OK Franchise division only undertakes investigations every two to three years. "We carry out investigations this infrequently because of the expense of upgrading systems; we can only afford to upgrade when systems become obsolete," says division IT manager, Jason Gardner.

Most of the companies polled are ready for the international migration to smart card technology. "At the moment, a vast number of our POS systems are contactless smart card-enabled for an automated B2B [business-to-business] and B2C [business-to-consumer] refuelling application," says Khalid Adam, BP`s marketing services manager.

"Contactless cards don`t need to be inserted into a device, simply presented for communication to be initiated through typically short range radio frequencies. We are currently investigating the acceptance and processing of contact cards as defined by EMVCo."

"I don`t think the underlying technology is readily available yet to the smaller guys, because of the expense and the knowledge of how the system actually works," says Gardner. "There`s not a lot of people out there who know how to install or run it; it`s very specialised."

South African companies were either fully migrated or in the process of migrating to thermal printing technology.

"Cost saving and speed are the biggest benefits we`ve seen from this migration," says McKay. "There are disadvantages as well, for instance the fact that the thermal slip will fade over time, but these are far outweighed by the benefits."

All companies polled agreed that having a common and consistent POS hardware platform is vital during the planning phase of their technology roll-out.

"If the initial hardware platforms are standardised, you shouldn`t experience any trouble when you begin to install the software," says Gardner.

Adam also points out that upgrades are made simpler if the POS hardware platform is consistent. "You want to get to a place where your hardware conforms to certain generic (non-propriety) minimum standards, so that you can change your POS software without having to heavily reinvest in hardware," he says.

Companies were divided on whether it was important to consult external specialist POS vendors.

"We have both a team assigned for internal needs and an external contractor for the supply of hardware," says McKay. "We develop the product that we need internally, and then we get hold of National Data Systems to look at new equipment that will do whatever we want it to. Both parties bring new developments to the table."

Gardner points out that often, OK`s software vendor supplies the hardware which is standardised. "Liasing with a hardware specialist wouldn`t happen unless it was an extreme case where we needed specific hardware installed."

However, Adam feels that consulting with external specialists is vital to planning. "It is important to tap into and understand current and future trends," he says. "That also assists in shaping your technology roadmap."