Magazine Article | July 18, 2007

Goodwill Upgrades Its POS

Source: Innovative Retail Technologies

Operational goals including customer loyalty and gift card programs prompt a POS overhaul at Goodwill Industries of Central Indiana.

Integrated Solutions For Retailers, August 2007

The 31 stores that comprise Goodwill Industries of Central Indiana, Inc. generate more than $32 million in revenue annually. VP of retail operations Kent A. Kramer says the company plans to expand that contribution to $50 million over the next several years. To that end, the retailer recently made a significant investment in its store systems.

Unpredictable, Fast-Moving Inventory
Goodwill sells 930 types of items, including designer clothes, brand-name merchandise, books, household items, furniture, and even gift certificates. Because the variety of donated items it sells is so vast and unpredictable, unique item SKUs are impractical. Instead, 10 departments encompass all clothing. Then, categories break down to jackets, jeans, shoes, etc. All items in a category usually sell at the same price.

Older POS technology couldn't accommodate some applications that were becoming mainstream in retail. "We couldn't try new things such as a bulk store, gift cards, or a customer loyalty program," says Kramer.

"We did credit card and check authorization over dial-up modem lines, which were slow and uncertain," says Jerry Beuoy, head of retail IT support. Additionally, the old registers only picked up new prices at end of day. "If that transmission failed in any store, it was stuck with old prices staff had to change by hand." Goodwill's old reporting systems only provided gross sales by date, which left replenishment efforts in a lurch. Beuoy says labor-intensive manual counts were the only way to determine what items stores needed.

Challenging Store Environment
Goodwill implemented the Microsoft Retail Management System. The first installation took place at the Goodwill Outlet Store on Indianapolis' east side, where clothing and other items are sold by the pound to the public. Items not sold in the outlet are sold to secondary market dealers. "We needed three lanes, each with a bench scale and a floor scale for carts up to 2,500 pounds. The old system couldn't have done that," says Shannon Klein, head of Goodwill's software development team. "Our scales weren't compatible with the new software, so we wrote our own drivers. And better planning of bar code structure and input procedures would have sped our second store's opening. Complete software installs took just 25 minutes. We'd walk in with our notebook, registers, and peripherals at 7 a.m., then have it all installed when stores opened at 9 a.m.," says Klein.  "We also saved $600 per lane by keeping our old receipt printers. We just installed a $50 adapter."

A T1 connection with headquarters ensures enterprise-wide visibility of store-level data.  "Our customers like the faster checkouts. All stores are synced on prices. And customized reports help us make better decisions. We don't lose records to an unpredictable modem," says Kramer.

"This system makes our data live," says Kramer. "I can pull up a report and see what's selling where at any point in the day." Kramer says Goodwill is smarter on space allocation by store now, as well. "If we gave 24 linear feet to wicker baskets, and they aren't selling, we cut that to 8, sell just as much, and free up space for faster-moving items." Closing times are dramatically reduced as well. Credit card processing that used to require up to 20 minutes of days-end dial-up modem time per store now takes less than 1 minute.

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