4-page Case Study - Posted 4/25/2008
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Retailer Links 450 Stores to Head Office Systems with Innovative Mobile Solution
Lithuania-based retailer Lietuvos Spauda needed to connect its chain of kiosks and convenience stores to head office. Manual processes restricted efficient management and delayed stock replenishment. Working with Microsoft® Gold Certified Partner Etronika and mobile provider Omnitel, the retailer rolled out its “Virtual Sales” solution. Based on the integration of Windows Mobile® devices with cash registers, and built using the Microsoft .NET Framework, the solution automatically transmits sales and product data to and from each store from head-office systems. Automated business processes help sales assistants work more productively, without having to learn new technology. Complete transparency of real-time data offers managers valuable insight into business performance. And the company has extended its offerings to new virtual services unique to the local market.
Situation
Retailer Lietuvos Spauda operates a chain of window kiosks and convenience stores located throughout Lithuania. The 360 outlets sell around 500 periodical newspapers and journals, as well as tickets for public transport, beverages, food, mobile phone top-ups, and other consumer goods. The company, which has operated for 60 years, serves 4 million customers a month.
More recently, these large customer numbers started to pose several challenges to the effective management of the chain. Until 2003, the outlets operated independently, as they were unable to communicate electronically. The stores had no Internet or telephone connections linking them with head office or other outlets.
As a result, the local sales assistant in each location was responsible for the manual processing of financial accounting and stock replenishment every night. The employee recorded sales data information and wrote down orders on paper forms. These forms were transported to headquarters by car, where administrators entered all the data into the company’s system, alongside information from hundreds of other outlets across Lithuania. In addition, senior managers were unable to view up-to-date sales information, as daily changes meant the data in the system was usually inaccurate.
Dainius Dauparas, Director General, Lietuvos Spauda, says: “This method was inconvenient and inefficient, and caused delays when it came to updating prices and ordering stock across the chain. We had to do a lot of time-consuming manual work that added little value to the business, and we were unable to react quickly to goods shortages, or analyse sales data in a timely manner.”
The challenge was to find a solution that the company could roll out across the 360 stores quickly and cost effectively. Their wide distribution meant that it was far too complicated and expensive to install a new IT system in all of them. In addition, limited space in each kiosk restricted the implementation of standard computers. Lietuvos Spauda needed to find a more flexible, simple-to-install solution. “It was also essential that the new system was as easy to use as possible, because very few sales assistants are experienced in using technology,” explains Dauparas. “In addition, our 25-second service policy is very important to us, so it was critical that any transaction remained within this timeframe to prevent our customers buying elsewhere.”
Solution
Lietuvos Spauda worked with Microsoft® Gold Certified Partner Etronika and telecommunications company Omnitel to create a solution. Their aim was to integrate cash registers at all outlets with existing head-office systems using handheld devices. Implemented within just three months from initial discussions, the new “Virtual Sales” solution has transformed the business.
A Windows® Embedded CE 3.0 operating system supports Windows Mobile® technology running on Fujitsu Siemens Pocket LOOX devices, which have been distributed to all outlets.
At each store, the cash register now acts as an interface for the Windows Mobile device. It communicates directly with the Windows Server 2003-based Virtual Sales server at head office using general packet radio service (GPRS) connectivity.
As a result, users can perform sophisticated sales operations electronically. The employee simply scans products using a barcode scanner. A signal is sent to the Windows Mobile device, which activates a command that is transmitted to head office using the Virtual Sales system. The solution then retrieves the relevant information to complete the transaction and print the receipt, or, where relevant, forwards it to a Lietuvos Spauda business partner, such as a lottery operator.
Jonas Šulcas, Deputy Director, Etronika, says: “The outstanding feature of the system is that the computer is used as an intermediary part, which the sales person does not have to operate directly. All operations are carried out with the help of the barcode reader and the cash register.”
The solution was built using the Microsoft .NET Framework version 1.1, soon to be upgraded to version 3.5. It integrates with a Microsoft SQL Server® 2005 database at head office. Here, employees use an Etronika-developed reports engine to analyse the incoming data and generate automated daily sales reports. This integrates directly with the accounting modules within Microsoft Dynamics™ NAV version 5.0, so that the central finance team receives sales information in real time.
Benefits
Since implementation, the Virtual Sales solution has helped Lietuvos Spauda dramatically improve productivity and business processes at each of its stores. Sales assistants can focus on customer service and sales, as they no longer have to spend time on manual administration. The solution has opened up the business to new products and services, such as electronically generated public transport tickets, electronic lottery tickets and mobile phone top-ups, as well as a new electronic bill payment service. And senior staff can use real-time data to make informed, timely business decisions.
Retailer Branches Out to New Services
Sales assistants at each kiosk can work faster and more productively without having to learn complicated new technologies. They can easily check the status of incoming stock and obtain prices in seconds using a simple barcode reader—a process that previously would have taken far longer. “The technology takes the pressure off sales employees by cutting out manual paperwork,” says Šulcas. “And the retailer did not have to hire new people with special knowledge or qualifications to use the system.”
Since implementation, Lietuvos Spauda has also extended its service to include sophisticated electronic offerings. For example, sales assistants can easily accept payment for electronic lottery tickets and replenish public transport tickets quickly and efficiently, using the same cash registers they used previously. The company has also launched a new in-store electronic bill payment service for utilities, household insurance, and other bills.
Dauparas says: “We have created a new generation service—trade in virtual products. It was a significant business decision because until then, there was nothing of the kind in the Lithuanian market. This system offers a lot for our business and helps to promote sales. Electronic products are among the most important for the business, now accounting for more than 40 per cent of our turnover.”
The company now plans to introduce additional virtual services for customers, such as easy electronic payment of parking fines.
Solution Streamlines Business Partner Collaboration
One of the latest virtual services on offer is easy top up of pay-as-you-go mobile phone accounts. The sales assistant simply scans the customer’s identification card, and enters the amount to be replenished. Within seconds, the customer receives an SMS from their mobile operator to confirm a successful transaction. The process is entirely electronic, removing the need for customers to purchase a new top-up card each time. Prepaid service Omnitel EXTRA was the first virtual product offered. The Virtual Sales solution verifies the customer information before transmitting it to Omnitel.
This has meant participating mobile operators have been able to almost eliminate prepaid plastic cards. Dauparas says: “Prepaid cards are protected by complicated technologies and expensive to produce. Without them our partners no longer need to pay for production, transportation, and storage, and as a result, these companies are more likely to want to do business with us.”
Real-Time Data Supports Complete Sales Transparency
Everyday operations are far easier to manage. If, for example, a kiosk window needs to be replaced, the sales assistant can scan the code for a new window and the central server transfers the request to the service company automatically. Upon completion of this work, the local sales assistant simply scans the receipt code to log the job as complete at head office.
The system automates data sharing between the stores and headquarters, and information is transmitted to Lietuvos Spauda with each new sale. Senior managers can control the flow of goods in real time and monitor stock levels in each store from head office. With clear, up-to-date information at their fingertips, managers can ensure outlets are always well stocked, monitor and manage volumes of goods, and see which locations are performing better than others. “They can better understand sales trends, forecast business fluctuations, and use this information to organise and launch timely marketing campaigns, maximising profits for the company,” says Dauparas.
Automation Eases Complex Management Processes
The implementation has transformed management processes. To start, the process of ordering, confirming, and returning goods is seamless. Previously, a single price change would require a service employee to visit every outlet individually and program the new price manually into the cash register. Today, employees can download new pricelists from the central system to all mobile devices, and use them immediately.
This helps to ensure that all stores across the entire chain are offering the correct prices immediately. It also saves the business significant costs previously associated with incorrectly priced items, visits to kiosks, transportation of paper forms, and unnecessary manual effort. The systems provide all quality and performance monitoring, eliminating the need for assistance from around 24 subsidiaries that delivered this service, resulting in dramatic cost savings.
Above all, no straightforward transaction takes longer than 20 seconds, ensuring that sales assistants can easily maintain the fast service for which the retailer is known, attract new business, and increase sales.
For More Information
For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to: www.microsoft.com
Windows Embedded
The Windows Embedded family of products helps you turn your vision and ingenuity into superior business results. Windows Embedded consists of Windows Embedded CE, Windows XP Embedded and Windows Embedded for Point of Service. These operating system technologies combine with the best set of tools and support to provide you the control to build what you want, accelerated time to market, and industry-leading support.
For more information about Windows Embedded, please visit: www.microsoft.com/windowsembedded
For more information about Etronika products and services, call or visit the Web site at: http://www.etronika.lt/
For more information about Lietuvos Spauda products and services, call or visit the Web site at: http://www.lspauda.lt/
This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.
