From E-tail To Retail And Back Again

If you asked someone what they associated with Marie Osmond in the mid-1970s, chances are good that "Donny" would be their reply. But today that question would probably split the poll. While baby boomers might still stick with Donny, the younger set would likely respond with an unequivocal, "QVC."

This isn't a piece about the value of celebrity endorsements, but VAR Brett Bennett, president of POSitive Technology (Phoenix), knows the power of mixing that element with a cross-channel sales approach. His company helped make it possible for QVC.

Befriending A Retail Giant
QVC is the world's largest electronic retailer, logging sales of more than $3.5 billion on volume of 79 million shipped packages in 2000. The company, which operates six phone centers that can collectively process 1,800 calls per minute, launched its cable channel in 1986 and its iQVC Web site in 1996. It operates an outlet store at its Studio Park headquarters in West Chester, PA, but until it opened QVC@THEMALL at the Mall of America (MOA) in Minnesota in 2000, it was never a serious player in the physical retail store arena.

With a commitment to brick-and-mortar came a need for a new POS (point of sale) system. QVC had been operating a third party system at its original location, but found that it was not possible to upgrade the system for future needs. It needed a new approach to POS, but a highly publicized request for proposals gets a prominent company like QVC buried in an avalanche of responses. "They were very elusive," says Bennett. "They heard about us from a manufacturer of one of the solutions we provide, and they contacted us anonymously through our Web site. All they told us was that they needed a retail solution, and that if we would come on site they'd show us what they were talking about."

POSitive Technology made a few visits to QVC to demonstrate its solutions to different levels of management. "We did a cost-benefits analysis with them. We showed them where they would be 3, 6, 9, and 12 months out, and how the system would pay for itself in 12 months or less," Bennett says.

POSitive Technology competed with other prominent retail POS packages, but Bennett feels that his company won the contract because it offered a solution that included GO Software's PCCharge Pro for processing of credit and proprietary payment cards, Quicksell Commerce for controlling inventory and sales data, and the Microsoft SQL (structured query language) database that allows QVC to customize interfaces with other internal systems.

Go Software's PCCharge Pro is card payment processing software that is loaded on every POS station, including the back office, at both QVC locations. Though the cards are going through different processors at the back end (depending on whether it's a credit, debit, or proprietary payment card), the clerk at the point of sale never has to change a screen to process the customer.

The installation at Studio Park began in May 2001. The stations at the facility handle transactions from various sales channels, as well as inventory control functions. Work began at the MOA location that summer. The stations at the MOA store were interfaced via WAN (wide area network) back to the server at Studio Park in Pennsylvania through SQL and ODBC (open database connectivity) provided by Microsoft in order to allow QVC to process all transactions through one portal. Since PC Charge Pro allows for TCP/IP (transmission control protocol/Internet protocol) processing, credit card transactions are processed in seconds, allowing clerks to serve customers faster.

So, back to the Osmonds. Marie, who markets her own line of collectible porcelain dolls, is a huge hit whenever she appears on QVC's cable channel. The retail location at the Mall of America broadcasts QVC's programming on televisions located throughout the store. "On any given night when Marie Osmond is in the studio to do a show on her collectibles, it's being broadcast at QVC@THEMALL, and the store will see doll sales skyrocket. It's amazing what the television will affect as far as sales in retail stores are concerned," Bennett says. Being able to report on trends such as this is an immeasurable boon to both the VAR's status with its customer and the customer's marketing department.

Coordinating The Corporation
"QVC functions in a very corporate work environment," says Bennett, "which provided a coordination challenge." He explains that his team had to work with different departments to accomplish each of its database, reporting, front end, and back end objectives. "We assigned two program managers to the installation, and they kept the communication lines open with management and clerical staff at the store. They reported back to one product manager to make sure everyone was on the same page."

POSitive Technology held close to 10 days of training seminars for personnel at levels from upper management to clerk. "They had many people to train in two different areas of the country," says Bennett. "At the point of sale, it only takes a few hours of training. But at the management level and at the back end, especially relating to inventory control, it was more intensive," he says.

In its cost-benefit analysis, the VAR estimated that the installation would pay for itself once over in personnel, inventory management time, and shrinkage savings during the first 12 months. Bennett estimates that the system paid for itself well ahead of schedule, and while he declined a specific figure, he calls the shrinkage savings "monstrous." The shoring up of QVC's brick-and-mortar POS system is an indication that more stores are on the way. Given the retailer's popularity, the "where" question is probably being handled as secretively as was the selection of its POS VAR. This much is certain - wherever QVC is, POSitive Technology plans to be there, too.