Magazine Article | July 18, 2007

Swift POS Hardware/Software Payback

Source: Innovative Retail Technologies

A sports arena deployed new hardware and software, which integrated store and Web inventory and increased system reliability.

Integrated Solutions For Retailers, August 2007

The retail operation at a sports arena has a condensed window for making profits when compared with typical retailers — it's limited to a few hours before games, at halftime, and after games. Therefore, it's important that its POS hardware and software are reliable, credit card processing is high-speed, and receipt printers rapidly provide records of purchases to ensure customers receive speedy, accurate service. For instance, at the AmericanAirlines Arena, which is managed by The HEAT Group (i.e. the Miami HEAT), expeditiously servicing customers with food, drink, and merchandise is primary to its profitability. In 2000, instead of using an outside vendor to manage merchandise, Andy Montero, senior director of retail operations for The HEAT Group, was charged with putting retail operations (i.e. hardware, software, merchandising processes) in place at the arena.

Montero built The HEAT Group's retail operations from the ground up, including implementing new retail systems, acquiring buyers, and selling merchandise online. He wanted to avoid the problems the prior outsourced concession business encountered — not guaranteeing adequate inventory levels and not being able to indicate when a specific size or color of a garment would become available.

Like most retailers, The HEAT Group's budget was limited. "I was challenged because I wanted a Rolls Royce, but I didn't want to pay for it," says Montero. "I wanted the amenities of large retailers' systems, but I didn't have the luxury of distributing the cost among many stores." After creating a budget, Montero opened a retail location in a mall to sell the Miami HEAT merchandise (e.g. hats, jerseys, furniture).

The mall location and arena locations needed POS hardware and software, so Montero began a search. He chose Retail Pro, which is POS and inventory software from a division of Island Pacific, Inc. He did so because the software had features such as reporting on multiple sales transactions versus single sale transactions and sharing inventory between stores and Web site sales. The shared inventory is possible due to integrated software from UniteU Technologies, Inc. The Retail Pro business partner in Florida,  BAC (Business Automation Consultants), presented the software, which included an interface with Paymentech that performs credit card authorizations and handles debits and credits to/from the retailer's accounts. Montero purchased the software (which was installed on IBM SurePOS 500 hardware with touch screens and IBM SureMark 4610 thermal receipt printers for store and arena locations) from BAC, who also trained Montero's staff.

Implement Running Inventory
It's critical to Montero that the POS system is up and running during his short retail window surrounding games and events (e.g. concerts). If one register is down, BAC is available for on-site support, and the configuration allows one POS terminal to be swapped out instead of causing the other terminals to freeze up like many POS configurations. Montero installed a high-speed T1 line that enables 15-second credit card authorizations from 18 to 20 terminals installed in the arena. "Typically, a configuration like ours runs at least $100,000, and most retailers are lucky to get a payback within five years," says Montero. "Our new system has paid for itself in a year or less."

Retail Pro enables Montero to keep a running (i.e. real-time) inventory. Not only is inventory shared among his Web sites, store locations, and arena locations, the software allows Montero to enter a minimum and a maximum for every SKU contained in inventory. When merchandise hits the minimum, Retail Pro automatically orders products up to the maximum threshold set in the software. "Handling inventory in a running manner is the most profitable way to order merchandise," says Montero. "I don't have extra merchandise holding in a warehouse. The software allows me to order based on demand."

For online purchases, Montero has integrated with FedEx. After an online purchase is made, an e-mail message is sent with a tracking number link to the customer. This link is also stored in UniteU and Retail Pro, so adequate customer service can be provided when necessary.

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