Sixty years later, DARPANet, the precursor to the
Internet, was created. Funded by the U.S. Department of
Defense, it allowed failure-resistant research and
information exchange between Stanford, UCLA, and a few
other universities. Influenced by the Cold War, it's
rumored that its purpose was to allow for immediate
retaliation, in the event parts of the network were
destroyed by a nuclear strike. The packet switching
technology that allowed this type of communication is
the technology employed by today's Internet. It broke
open a new age of communication and information access
and speed unthinkable at any other time in history.
What's Retail Missing?
Live or real-time data in the retail world doesn't just
mean the ability to see sales as they happen. Vendors
and retailers have been uncovering many other benefits,
such as:
* Increased inventory turns. Since the head office has
accessibility to information all the time, it can
easily run reports at the end of the day to find out
what's selling in which stores and move inventory
accordingly.
* Reduced shrink and better control of inter-store
inventory movement. Connected stores can receive and
transfer goods in real time. Inventory can be tracked
more closely.
* Faster credit card processing.
* Ability to add gift cards and promotions.
* Improved data integrity, no need for synching data.
* Decision-making ability wherever the Internet is.
* Visibility of warehouse inventory at all store
locations.
* Accessibility of customer data from any channel,
giving the client and salesperson access to buying
history or CRM (customer relationship management)
information for customer relations and fraud
prevention.
If the concept of real-time data has been around for
almost 100 years and claims several financial benefits,
why are so few retailers using it? There have been some
risks and caveats that have slowed progress, but in the
last couple of years some early resistance factors have
been changing. Until recently, communications costs and
security have been concerns. However, lower
communication costs coupled with innovations that allow
most live systems to run on low bandwidth have all but
removed the cost concern. Increased awareness of
communication security within retail organizations and
real-time systems that allow registers to function even
during a communication failure also continue to
strengthen the debate for real time.
Ironically, the most prohibitive factor in the adoption
of real-time technology has to do with the retail
technology industry itself. Not many software vendors
are re-architecting their legacy systems to incorporate
live technology.
Some software vendors with live capabilities haven't
been educating retailers on how real-time technology
works. It must be clear, or retailers shouldn't expect
it to do what they need. There's no right or wrong way
to go live, so long as the benefits are there and the
caveats are not.
We've only begun to see the benefits of real-time
technology. In this very competitive business, small
advantages can make the difference between expanding
and shrinking or showing profit versus loss. The
technology is there, but the industry must do more than
dip a cautious toe in the water. It must demand this
technology from its vendors. The Internet was created
in response to the needs of the U.S. military during
the Cold War. The retail industry's needs are just as
achievable, but Economics 101 dictates supply and
demand, so start demanding. The supply will be
forthcoming.