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.