Dutch book giant BGN leads the way in retail automation

Retailers in South Africa stand to gain significant benefits from following the example of the Netherlands` BGN, says Rick Parry, MD of Progress Software South Africa.

BGN (Boekhandel Groep Nederlands), the Netherlands` largest bookstore, has become one of the world`s most innovative retailers of its type through implementing a range of software applications.

The chain has more than 40 stores, 730 employees, and over 11 million visitors a year. Its Selexyz stores carry between 20 000 and 275 000 books, selling between 15 000 and 40 000 books a day.

BGN faces the same challenges as other retailers, such as closing stores for stocktake; and having the right books available, at the right time, in the right stores; but, in addition, it must compete with virtual book traders, such as Amazon.com and Barnes & Noble, which operate globally. As such, it has to dramatically improve internal operations and provide a superior in-store customer experience.

BGN`s approach to these challenges was to create the SmartStore, which it takes to market through the auspices of the Selexyz brand.

The solutions stack as developed and delivered for BGN leverages a range of new-generation technologies which, taken together, are creating a completely new paradigm in bookstores:

* BGN has embarked on an automation programme that integrates its business applications with a service-oriented architecture (SOA).
* Implementing item-level radio frequency identification (RFID) tagging to optimise its supply chain and enhance the customer experience.

BGN is launching two fully automated SmartStores that combine item-level RFID tagging and SOA to deliver a tightly integrated supply chain, from warehouse to consumer. The first SmartStore has been launched in Almere.

Immediate benefits are:

* The business has reduced the number of manual inventory steps, reduced opportunity for error, and enhanced management of its supply chain process. Perhaps the most visible immediate benefit is through the implementation of user-friendly, natural language business intelligence software that not only checks what books are available, but precisely where they are in the store.
* From an operational point of view, the SOA distributed solution requires no in-store administrative staff, a critical consideration for the future scaling of the system.
* From an IT perspective, the architecture chosen allowed implementation in just over half the time relative to comparable deployments in the market.

Unlike RFID solutions that tag at the pallet or case level, Selexyz is using RFID to track the movement of individual books. This provides a retailer with unique real-time visibility into store inventory and its supporting supply chain activities. This allows it tighter management of its relationship with Centraal Boekhuis, the country`s leading distributor of books, and responsible for nearly 90% of Selexyz`s books.

This means the company`s automation initiative now spans the entire process, from distributor to buyer.

A store issues an order to Central Boekhuis. The order generates an RFID tag which is affixed to the books, each with its own item-level serial number. The books are packed with an advanced shipping notice (ASN), listing each book in the shipment, its box, and the destination in the store, along with the connection between the RFID tag and the ISBN for the book to which the tag is affixed.

Central operations records all of the transactions to date, and as the shipments arrive at the Selexyz store, the books pass through an RFID tunnel where books` RFID tags are scanned without being taken out of their boxes. Within seconds all receipts are confirmed, and queries raised.

One of the most profound benefits for the business is stocktake: where it took an entire day`s closing of the store, with 20 to 25 employees to do stocktake, it now takes two hours with just two RFID tag readers.

But the real winner is enhanced customer service, especially with customer-ordered books. When they arrive, the RFID tag allows the store automatically to generate an SMS or e-mail to the buyer, and the books are routed to a separate stockroom. The RFID tag, again, allows rapid retrieval of the book.

Every single aspect of the extraordinary solution delivered to BGN was supplied by Progress Software:

* OpenEdge powers BGN`s back-office applications.
* Sonic acts as the backbone to tie together all the messages that flow between the various applications, BGN and Centraal Boekhuis, and manages the vast flow of RFID data.
* Apama provides direct visibility into and leverages all the business events and processes, as they are occurring.
* EasyAsk provides the natural language business intelligence capability that allows buyers to locate books, even if they have been misplaced.

The experience of BGN has been a revelation for bookstores in particular and retailers in general. It has paved the way for truly superior customer service, cost reduction, greater efficiencies and class-leading retail automation.

Whether online or in-store, BGN now delivers an outstanding shopping experience ... which is what competitive advantage is all about.