Stop Speaking The Language Of Loss

Retailers should never look at technology investments as separate entities installed to solve just one problem at a time. To gain a solid and long-term return on investments, retailers should make sure one system not only integrates with, but builds off the others in a way that will support long-term growth. Wilsons Leather (Brooklyn Park, MN) had this technology approach when it worked with Datavantage Corp. (Cleveland) to install a new POS (point of sale) solution in 2000. This was just the first step in a technology plan that included installing a combination wide area network (WAN)/virtual private network (VPN) to connect the chain's 769 stores. From there, Wilsons could add additional functionality including loss prevention tools and human resource Web forms and, in the future, create real-time data transfer.

If You Build It Cost Savings Will Come
Wilsons installed Store21 Store Management System to replace its legacy POS hardware and software. "When we replaced the POS equipment, it was 10 years old. That is good for equipment costs, but it put us behind strategically against our competition," said Randy More, project lead, special projects at Wilsons Leather. "The POS software was not a GUI interface. It had the look and feel of a cash register instead of a PC." The new POS saved the leather chain thousands of dollars in training costs, but that wasn't where its technology plans ended. "We have a good vision for the future, and to make it a reality, we need to have our stores connected online in real time," More said. The investment in a WAN/VPN created a foundation for implementing such technologies as voice-over Internet protocol (VoIP) and Web-cam security. In the future, the retailer will look at centralized layaway and gift card databases. Wilsons combines the power of Store21 with Internet and WAN capabilities, and the total communications system allows Wilsons real-time information access and messaging to and from all areas of the enterprise.

The Right Data Holds The Cure For Loss
With real-time access to store data and the extensive communications network, Wilsons' next step was to continue adding cost-saving tools. The retailer installed Datavantage's Proact suite of products that includes XBR Loss Prevention software. "Retailers as a whole are concentrating on loss prevention numbers. Anything we can do to help our bottom line, we need to try. When you look at the investment cost of this product compared to the return, it becomes very justifiable," More said.

The raw transaction data files that Wilsons polls every night from Store21 are the data source for XBR. Prior to this, the loss prevention department queried sales audit information into Access databases to try to determine loss patterns. But sales audit data is not the T-log (transaction log) data that the department needed. For example, loss prevention wants to see the details of voided transactions, including when in the process it was voided, the time, and the employee who did it. "Sales audit data doesn't contain this level of information because voids are considered non-financial transactions. But to loss prevention, voids are the most important," More said. "Store21 and XBR are designed to flow all the necessary information directly from the POS to XBR."

Wilsons has only had XBR installed for six months, but, so far, the retailer said the results are encouraging in terms of determining loss as well as helping with other management issues. With exception-based reporting, retailers are always looking for negative patterns in the data. Wilsons has found a way to use XBR reports for positive reinforcement of its employees as well. "An important sales driver at Wilsons is units per transaction (UPT) numbers. In leather sales, it is good to have one or two units in a transaction, a coat and leather spray for example. If a sales associate can add on a pair of gloves, that is a bonus. With XBR, we are able to easily recognize high sales or exceptional UPTs and affirm that employee with a corporate e-mail over the network from headquarters," More said.

Proact combined with the company's network will also allow Wilsons to combine video surveillance with loss prevention data to identify theft. Although less than 3% of Wilsons' stores are using digital surveillance video right, the time-stamped video combined with XBR can determine illegal activity. "We can use XBR to pinpoint a time of occurrence. And then, if the store is video-capable, we can review the video before, during, and after that time to see register activity." With a clear technology plan for the next three to five years, Wilsons is ensuring that its investments will last by building a strong, open foundation while anticipating its needs for the future.