Putting the Back-Office to Work

Inside the Numbers: Zarco 66

8 Number of stores.

$35 million Total annual systemwide revenue.

$20,000 Cost of its new POS/back office system on the front end.

$70,000 Cost of its new POS/back office system on the back end.

25% Percentage of store sales from foodservice at the chain’s first store with the new system

The most essential parts of POS and back-office systems for the foreseeable future aren’t circuits, chips or wireless routers, but hearts, minds and attitudes.

“The most immediate thing at the front end is to get customers through with a minimum of hassle,” said Bob Amster, a principal with the Retail Technology Group in Stamford, Conn. “The last impression that a customer has of a store is the checkout. That’s the one they will retain in their minds.”

How to reduce the hassle? “Make sure that there is real-time access to vital information that you might need to satisfy a customer’s inquiry or problem with a sale,” Amster said.

Case in point: the customer who comes in with a spoiled item they bought five days ago, but doesn’t have a receipt. “You want real-time access to all of the transaction history at a detailed level so you can find the transaction and resolve the issue to keep the customer satisfied. The purpose of these systems is as much to improve customer service as it is to manage your business more efficiently.”

From the back office perspective, a key is to always be in stock on core convenience store items. “You need to be able to understand sales velocity, and how long you have been out of stock on a specific item,” Amster said. “To satisfy goal you need to have good forecasting and replenishment systems, and good supply chain systems so that you can communicate quickly and effectively with your suppliers.”

Store Integration
Eight-store Zarco 66 in Lawrence, Kan., is in the midst of a POS and back-office conversion, necessitated in part by the chain’s expansion into the foodservice business. The updated system gives management the ability to control, through the back office, many of the ingredients related to food preparation.

For example, said President and CEO Scott Zaremba, “When you make a ham-and-cheese sandwich you may have three kinds of ham, several breads, three kinds of cheese, lettuce, tomato, pickle. We have the ability to keep track of all those costs through this improved POS system.” He called it “one of the things that has been lacking in the convenience store industry: a better grip on costs of ingredients, and a system that would track it and also interact with the dispensers.”

Zaremba agreed with Amster that the biggest point is looking at how you’re going to take care of the consumer.

“Looking forward in 2010, our challenge is to create a niche and be more than just another convenience store with drinks, snacks and prepackaged items,” Zaremba said. “Foodservice is the next step, but you have to be prepared to manage it effectively and that begins with setting goals, training and using technology to manage the category closely.”

Mistakes made may or may not be reflected in what the customer sees, Amster noted. “But the mistake c-store operators make often is that they try to think of themselves as uniquely different from others. Then they start modifying their software, both at the point of sale and back office. Then they wind up with an unmanageable mess that never needed to be,” he said. “Begin with what you need and expand only as necessary.” 

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