In 1999, I found myself writing a paper, which eventually became a small book, about the next decade of convenience store automation. As I contemplated the future, I focused on things such as Y2K and the emergence of the Internet. My prediction for the single greatest change was the use of wide-area networks (WANs) to connect stores to each other, their home office and Internet-based services from suppliers. At one conference, I referred to the WAN as the PC of the 21st century.
You would be hard-pressed today to find a chain that is not using a high-speed WAN. As we considered how to maximize the WAN’s potential, we saw new possibilities for computer-based learning, computer-assisted ordering and other conceivably viable applications that needed high-speed connections to function.
The logical extension of the use of these WANs was what I referred to as “real-time information systems,” the culmination of two distinct technology development paths. On one side, the information technology infrastructure (the WANs) needed to support real time had to evolve to the point of affordability. The technology also had to be capable of handling the large quantities of data needed to support the applications we would ultimately build. That brings us to the second path: designing applications that would actually use this infrastructure for more than a high-speed dial-up network. As those two developments became reality, things really began to change.
E-mail, computer-based learning and store paperwork were among the first relevant applications to take advantage of these new technologies. Because these applications were mostly of the “store and forward” type, the idea of real time was still a bit premature. Even today, our most modern back-office application holds the data at the site until the manager releases it. Over the past few years, customers have moved from updating this store-level information the next business day to the moment the manager submits it. Also, retailers are updating their data warehouses within minutes when it used to take days.
The history of technological advancement shows that once we experience progress, we never like returning to the status quo. One of my favorite examples of this is a significant western states retailer that began reviewing sales margins by item multiple times per day.
Getting Real
Today, the goal of achieving true real-time information dissemination is becoming a reality. There’s a lot of momentum behind real-time item inventory. How could we use this information? One significant way would be to potentially spot out-of-stock conditions before they occur. We could also determine the effect of promotions and adjust them to maximize their effectiveness.
Probably the two earliest and most likely uses of real-time inventory information will simply be to have better operational control over sensitive inventories such as tobacco and to provide the information base to drive better replenishment algorithms.
Another trend we’re seeing is companies deploying mobile apps with realtime access to their point-of-sale (POS) systems. This allows field management to respond to potential issues in minutes rather than hours or days.
The third use of real-time data is fuel inventory. The ability to see actual fuel inventories and respond accordingly is now commonplace. Before the new IT infrastructures were in place, companies were hesitant to use old dial-up technology more than a couple of times a day. Companies now review fuel inventory positions hourly, if not more often. Yet another use is real-time management of retail fuel prices and price signs.
Going forward, this real-time capability will be extended to other aspects of store operations. The “Internet of things” means that all types of devices will be able to talk to our networks. New sensors, cameras, apps, biofeedback devices and even clothing will communicate with our networks in real time. New customer behaviors, operational anomalies and other aspects of our business will be visible to us in real time.
We hope to have the good sense to put all this information to use in a way that benefits our customers and our team members. Even now, for many organizations, having today’s data tomorrow is too late. You can be sure that once real-time data is the new normal, none of us will want to go back.
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