A new POS system at Weight Watchers International, Inc. reduced processing errors 48% and enabled the adoption of data mining.
For most retail businesses, capturing customer data manually is out of the question. Weight Watchers International, Inc. understands this concept well. Weight Watchers is a $1.2 billion consumer wellness company that emphasizes weight loss through exercise and caloric intake control as opposed to the latest diet fad. In addition to providing members with a points-based program for eating healthy, the retailer offers a variety of nutritional foods, supplements, recipes, and merchandise. Weight Watchers has learned its best customers are the ones who hold themselves accountable to hitting their target weights by attending regular support/motivational meetings. As a result, the retailer captures several metrics on members who attend the meetings, which are held daily at 733 retail centers and more than 3,000 shared locations across the United States. "Each week members weigh in, receive inspiration and guidance from a Weight Watchers leader, and interact with their peers and other members who have already experienced success with the system," says David Dean, VP of software engineering at Weight Watchers. "Throughout the meeting, they have the opportunity to purchase food and other products that can help them achieve their goals. By identifying members who are struggling to hit their goals, we can work with our group leaders to come up with ways to make them successful."
You Can't Count On 50% Data Processing Error Rates
Two years ago, Weight Watchers' group leaders collected attendance and product information manually from the hundreds of thousands of members attending each week in the United States and mailed this information to Weight Watchers' U.S. headquarters on a nightly basis. The retailer discovered, however, that there were often errors made on the worksheets. For example, sometimes the number of members did not match the dues collected. In fact, approximately 50% of the reports it received from its 20,000+ weekly meetings contained errors, and more than 50 full-time employees were required to keep up with data entry and error correction each day.
Weight Watchers knew it needed a POS system to automate its data collection process, but it also knew that its biggest challenge was going to be finding service providers to procure and install a POS system at each of its centers. "Some of our centers are located in remote areas without any VARs/systems integrators within miles," says Dean.
After researching several options, the company found national data/voice consultant and networking implementation provider/systems integrator Comm-Works. With the systems integrator's help, Weight Watchers selected HP-based POS systems with Symbol bar code scanners, Tanita USB-based scales, and VeriFone credit/debit processing terminals. Comm-Works handled hardware and software staging, testing, and implementation. "We already had POS systems at 122 centers, and we rolled out additional POS systems to 84 stores in June 2006 and another 105 in October 2006," says Dean. "Both installation phases lasted four weeks and met with minimal problems." One problem that had to be overcome was that the scanners timed out (i.e. stopped communicating with the POS software) if they weren't used within a certain period, which simply required Comm-Works to change a setting on the PCs.
With the current system, members' ID stickers, which contain bar codes and are affixed to their assigned Weight Watchers member booklets, are scanned prior to weighing in or purchasing products. Next, the scanned data is automatically sent to Weight Watchers' back end system via a batch upload via a dial-up or broadband connection. "Data processing errors now occur less than 3% of the time," says Dean. "We anticipate a full payback on our investment in less than two years, considering hard returns [e.g. fewer Weight Watchers employees are required to process customer data, resulting in reduced labor costs] — and much sooner when soft returns are considered."
Weight Watchers' new data mining capabilities are one example of a soft return on investment. Using a Microsoft SQL Server 2005 and Microsoft Reporting Services — which comprises an OLAP (online analytical processing) and regression analysis engine — the retailer is able to identify trends and react quickly. "It used to take us nearly three weeks to analyze and respond to data trends. Now, we can react within a day," says Dean. "Having this new capability enables us to more quickly help group leaders identify critical points where a member is most likely to struggle and to help them provide the appropriate guidance as soon as a negative trend is detected."
Minimize Maintenance Costs With A Thin-Client POS
Weight Watchers plans to roll out the new POS systems to the remaining 419 centers within the next year and a half, but it's already anticipating making a few changes. One significant change is moving to a thin-client model, which would mean that no data would be stored on the local machines. Instead, data would be accessed from a central repository over a broadband connection. The benefit of using a thin-client model is that anytime Weight Watchers updated its product menu and/or made architectural changes to its POS software, it would only have to make the change once, as opposed to having to update 733 locations and more than 2,300 POS stations. Including a built-in mag-stripe reader with its POS system is another upgrade the retailer is planning. "Currently, our credit/debit card processing units are not integrated, which requires the cashier to manually type in the payment amount after swiping a customer's card. By having an integrated system, we would further reduce any payment processing errors," concludes Dean.
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