Magazine Article | December 20, 2006

The Anatomy Of A 4,200-Store POS Rollout

Source: Innovative Retail Technologies

Mail Boxes Etc., Inc. upgraded the POS hardware and software at its 4,200 franchises, which operate as The UPS Store, to enable the collection of more granular POS data.

Integrated Solutions For Retailers, January 2007

Mail Boxes Etc., Inc., which operates 4,200 The UPS Store franchisesRolling out new technology to stores scattered across a large geographic region is never an easy task. However, it is made more manageable when you develop a clear strategy, which is what Mail Boxes Etc., Inc. (MBE) did for its 4,200 U.S. franchise locations operating under the name The UPS Store. These stores provide document printing, packaging, and shipping services, as well as mailing and office supplies for purchase. When MBE decided to upgrade its POS systems, it planned a three-year rollout that addressed the franchisees with the oldest legacy systems first. "You can't just deploy 8,000 systems [the majority of locations have two systems] at once," says Tim Davis, VP of technology. "It is logically unfeasible to manufacture, stage, deploy, and configure that many systems in a short period of time." MBE now has the new POS system in 90% of its stores and is able to capture data that improves enterprise- and store-level decision making.

MBE's stores were using aging POS systems with homegrown software and various nonstandardized hardware platforms. The software was a problem because it didn't capture sales data at the SKU level; it only categorized sales at the profit center level. "A lot of SKUs can be buried under a profit center category, which doesn't give us the granularity we needed to have accurate sales data," says Davis. For example, the legacy POS software would record an item sold by its category (e.g. "Retail Shipping Supplies"), rather than as a specific item (e.g. "6-inch by 6-inch box"). Also, MBE needed more flexibility from its POS software. Because there are many different ways to ship a package or use the stores' document services, the transactions handled by The UPS Stores can vary widely. "This variety needed to be translated into the POS system, as one store's preferences might be different from another's," says Davis. "We needed software that we could easily customize for each store's needs."

Because the POS hardware — PCs with peripherals — was purchased by individual franchisees, it wasn't standardized. "As you roll out systems to thousands of franchisees, you can end up with 15 to 20 versions of components, drivers, and interfaces that you have to test and retest," says Davis. "You end up lengthening and increasing the time and costs of deployment. We really wanted to create a corporate standard for the POS hardware and software solution."

Retailers Are Not POS Software Developers
MBE knew it did not want to develop the new POS software itself. "Any retailer that gets into developing POS software is signing up for more work than it ever wants to do," says Davis. MBE decided to rely on the experts in the industry (i.e. vendors) for its new POS solution. MBE put together an RFP that included the requirements of the POS hardware as well as the software, such as capturing sales data at the SKU level and application flexibility. The eventual solution also needed to stay consistent throughout the planned three-year deployment cycle. (See sidebar below for more info.)

Following the RFP process, MBE contracted with HP and its strategic in-store solutions partner ISS Retail. HP provided MBE with the POS solution it needed, which included the plug and play HP rp5000 Point of Sale System, scales, thermal label printers, bar code scanners, card swipe devices, and Touchpoint POS software from ISS Retail.

Upgrade Franchise POS Systems Based On Existing System Life Cycle
Because MBE's franchisees all came on board at different times, they all were at different stages in the life cycle of the legacy system. However, a majority of the franchisees were past the three-year life cycle benchmark, so the initial deployment of the HP POS system included 2,000 systems. To handle this deployment, HP staged the products and arranged for the shipping of the devices to The UPS Store locations. MBE contracted with UPS Technical Support to install the systems at the stores. After the initial rollout, other franchisees implemented the new system as their legacy software passed the life cycle-end benchmark or as soon as they chose. "Because the POS upgrade was an expense for the franchisees, we didn't want to penalize franchisees that had just come aboard and purchased the old POS system two months ago," says Davis. "Franchisees are telling us the new POS systems are more stable than the previous systems." MBE currently has the new POS system installed at 90% of its locations.

The capabilities of the new POS system include time and attendance, integration with UPS' shipping and tracking software, and the necessary application flexibility. The system handles 750,000 transactions per day across the enterprise; those transactions include price lookups, online credit authorizations, package weighing, label printing, invoice printing, and cash transactions. The UPS Stores can also collect SKU-level data, which impacts both store-level and enterprise decision making. "We've been able to perform analysis on the tie-in rates of products or what products are sold along with others," says Efrain Inzunza, VP of industrial engineering for MBE. "We also can track the performance of product pilot programs and see near-real-time performance, which aids our marketing efforts." Additionally, the flexibility of the solution allows individual store owners to customize the software to allow for and help facilitate special promotions, price discounts, and bundled product offerings at the point of sale.