Scan artists

The retail and logistics industries continue to boom throughout the Middle East as the region’s economies continue to soar. The same could be said of its technologies, as Duncan MacRae finds out.

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By  Duncan MacRae Published  July 2, 2007

IT in retail and logistics in the Middle East is being dramatically shaped by changing dynamics of the verticals. This includes an increased need for convenience, breadth of product options and a vast array of shopping formats - all of which are changing the buying habits of the shoppers and placing emphasis on producing a consistent and high quality customer service experience.

Additionally, as margins tighten, retailers do not just need to address the efficiency of their processes, shorten product life cycle, expand their operations and improve their in-stock performance, but fundamentally alter the shopping experience to drive customer loyalty and minimise switching to competing companies.

SAP, which provides an integrated retail solution portfolio to enterprises, believes that embracing new technologies will be crucial for the future of any company involved in retail or logistics.

"We believe that the technologies most likely to shape the future in retail will be those that facilitate self-service," explains Essam Enany, president of SAP Arabia. "Customers want speed, flexibility, security, convenience, and, above all else, choice in purchasing.

"From international high-street brands to regional and local merchants wanting to enable online and in-store transactions, SAP offers the applications necessary to deliver these customer needs," he adds.

How the technology develops will, of course, depend on how the needs of the business develop. Ramesh Cidambi, head of IT and logistics at Dubai Duty Free feels that the challenges are different in terms of the different areas within the company. The challenge for anybody like him working for a retail organisation, he says, comes in three parts.

First, there is the front office where the challenge is to provide a reliable, fast system so that the customer's experience is good. For Dubai Duty Free it is important that the businesses is able to push through the traffic that it sees on the shop floor and transaction volumes continue to grow every month.

For example, in January 2005 it saw one million transactions, whereas in May 2007 it had around one and a half million transactions. It is a graph that is steadily climbing.

"At the POS," Cidambi explains, "we need a robust, reliable system which handles the loads that are coming onto the shop floor due to the steady increase in traffic and the passenger numbers.

"In the back office the challenge is to have a reliable applications infrastructure which provides high quality information to the users."

It is up to the IT department to provide the users with the sales stock and other information that they want, when they want it, in an environment where user expectations keep going up in terms of the kind of information that they want.

The information must be able to flow through different parts of the company through the infrastructure.

"Maintaining that, developing that, pushing the utilisation of that and staying ahead in terms of ease-of-use and functionality is key," says Cidambi. "Providing better and better information to the end user. That's really the challenge.

"Then there is the third part - the middle part. The challenge is to have a high quality infrastructure, maint-aining a secure network and high uptimes as well.

"We need to ensure that the people who are using the technology in the front office and the people who are using it in the back office have a technology infrastructure that they can rely on. Doing that in an environment where the organisation, users, traffic and network traffic is growing is very difficult."

Dubai Duty Free has recently completed the implementation of a new POS solution from NCR. Around 200 terminals were fitted with NCR RealPOS, replacing a Bull POS solution.

"The old cash registers were slower in terms of completion of transactions," Cidambi says. "The user interface was not as easy to use as the new POS systems and they weren't as reliable. The POS solution wasn't a priority for Bull and we had to upgrade our systems - we knew that we were going to open a concourse through terminal three in the near future.

Cidambi feels the new POS systems have a much better interface and staff can be trained on them much faster. Staff can complete transactions faster and printing receipts is also quicker.

"The customer is much better informed of the transaction because the customer display is much better. It's in colour and you can everything that's happening," Cidambi adds.

The importance of these improvements cannot be underestimated. Cidambi is in no doubt that it has increased the revenue stream. "One of the things that makes customers anxious is queuing at the till," he says. "So because they're anxious about their flight, boarding and getting to the gate, the faster we can put them through the better the customers feel.

"In a normal, downtown supermarket you're more likely to have passengers wait in line patiently because the don't have the problem of trying to catch a flight. In a duty free environment you can't expect customers to wait forever," Cidambi adds.

At this point in time, Dubai Duty Free is very happy with its POS and back office set-up and is turning its attention to the middle systems. These typically relate to retail price management, delivery, pushing purchase orders to suppliers and managing all the deals that are made. Cidambi is currently looking at Oracle Retail and hoping to begin an implementation project in the near future.

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