Supermarkets used to be just for buying groceries. That model has changed, and Giant Eagle is representative of the super-modern, warehouse-sized stores that have come to dominate the grocery industry. Sure, Giant Eagle stores have all the things you'd expect in a grocery store: a bakery, meat department, fresh seafood, and a deli. But they also have a number of offerings you wouldn't expect: a restaurant, video store, childcare center, dry cleaner, and a bank. The store is actually many businesses within a business. And that setup is consistent with the company's mission statement, which is not only to be "your favorite supermarket in your community," but also to offer "the finest and most innovative of products, departments, and services under one roof."
These services are helping to distinguish the grocery chain in a competitive market, but supporting these services is no easy feat. Doing so with paper-based, manual records certainly isn't realistic. And that's why Giant Eagle has spent so much time and effort developing its technology infrastructure.
Currently, Giant Eagle has 203 corporate and independently run stores in three states: Pennsylvania, Ohio, and West Virginia. The 69-year-old company is based in Pittsburgh and has more than 35,000 employees. As the company continues to grow, technology continues to play a fundamental role in its expansion.
Where Business Begins: POS Stations
A good place to begin assessing the technology at Giant Eagle is where business really begins: the POS stations. Giant Eagle stores run on IBM 4690 POS (point of sale) terminals and Telxon bar code scanners. IBM software powers the systems for Giant Eagle.
One notable feature of the system is Giant Eagle's loyalty card program. With a discount card, customers are entitled to certain savings on selected products. The system has worked well for the company in tracking demographic data. "The Giant Eagle discount card, our loyalty card program, has helped us tremendously," says Russell Ross, VP of strategic planning. "It has been very successful since we began using it. It gives us access to a wealth of information on our customers, their spending habits, and their preferences. It has allowed us to make a number of well-informed business decisions."
Supply Chain Management
Giant Eagle has a number of enterprise applications helping to run its business. The most notable of these is an ERP (enterprise resource planning) system from PeopleSoft. The system handles a number of different enterprise applications, such as accounting and human resources. The ERP system is also integrated with a number of other enterprise systems.
Most notable among these would be the warehouse management systems (WMSs) in Giant Eagle's six distribution centers (DCs). Currently, the company is running WMSs from two vendors: EXE Technologies of Dallas and OMI International, Inc. of Richardson, TX. Specifically, Giant Eagle is using EXE's Exceed product and OMI's Tricep warehouse management system.
The distribution centers also include transportation management systems (TMSs) from Manugistics of Rockville, MD, and handheld wireless technology from Teklogix of Erlanger, KY.
Expanding Business To The Web
With a strong IT infrastructure in place, Giant Eagle has turned its attention toward a new future with a new channel: the Internet. The company is currently planning to revamp its Internet site to expand its offerings. The initiative began last December when the company contracted IBM to do consulting for the Web project. "We wanted to make sure we started out strong with this initiative," comments Ross. "It was important to plan it carefully. There is definitely a future for online grocers, but there are a number of ways to model an online grocery store. We'll be launching our initiative in different stages, assessing results as we go, and making future decisions accordingly."
Giant Eagle has partnered with San Mateo, CA-based Blue Martini Software for the Web initiative. Blue Martini is a provider of enterprise-scale e-business applications.
Giant Eagle has a corporate Web site, but the new venture will bring about another site with new features, new functionality, and new offerings. The company is building the infrastructure for the site and will launch the site in stages. The first such stage will bolster the services Giant Eagle already provides. The company offers banquet and catering services with in-home delivery (cakes, complete meals, and party trays). The initial Web launch will include offering these services through the new channel.
"Our catering and banquet services are a great area of our business to test online," explains Ross. "We already offer delivery for these services, so it's a perfect fit in that respect. Customers will be able to go online, order the items they want, and then pick them up or have them delivered. We will gauge the success of these offerings and use that information for future decisions with the Web site."
The next step for Giant Eagle will be launching itself as a full-blown online grocer, but the company won't do that in one fell swoop, either. "We expect to offer online shopping for groceries," says Ross, "but we will begin by piloting it in a limited number of locations. We'll choose metropolitan areas where there would be a demand for those types of services. Again, we'll use the success of the test to make future decisions. I don't expect we'd offer these services in all our stores, though, since the stores themselves and their demographic markets vary widely."
Giant Eagle has a distinct advantage over many of the pure online grocers. The company has 69 years of industry experience and the infrastructure (warehouses, distribution centers, and inventory) to handle the initiative; there's no need for start up capital for supply chain fulfillment.
Enterprise IT Philosophy
Giant Eagle has an extensive and well-founded IT infrastructure in place. But the company wants to stay current with developing technologies and make sure it implements them to best serve its business. Ross' new role at the company reflects that change. Although Ross has worked for Giant Eagle for more than 10 years, it is only in the last six months that he has taken on the role of VP of strategic planning. "As a company, we decided to make a more active, aggressive, and informed approach to technology and the expansion of our business," says Ross. "That's part of my new job – to be aware of the state of our business and the current state of available technologies." By all accounts, the focus on technology and its benefits seems to be working for the company.
Questions about this article? E-mail the author at DougC@corrypub.com.Doug Campbell