Retailers’ Point of Sale systems must work. At all times and under any circumstances. Customers who are unable to pay because of failing cash registers will leave the queue and take their business elsewhere. Faulty connectivity between shops and the payment providers is one of the major causes for point of sales systems’ downtime. Retailers have to look into their connectivity. And make sure it works.
By Dennis Warnar, Sales Director Custom Connect
International retailers are always looking to expand. After all, the larger the scale, the more synergies can be realized in procurement and management. Finding proper locations, the layout of the store, arranging the product line… It all matters and retailers invest a lot of time and energy into new stores. Arranging connectivity for the connection to the payment system and its data centers ends up being but a minor detail at the end of a stream of activities. A detail that is significant. Certainly in an international environment. This is not without its reason, as arranging a reliable connection is not easy everywhere. In most countries providers are slow and formal. There may be many months between the application and the actual delivery of a connection. And without a business address, it’s often quite simply impossible even to ensure applications are honored in many countries.
The result is that the planned store opening suddenly has to be postponed….
Challenge 1: sourcing
Retailers usually have a lean & mean IT Department that should ensure its IT systems run smoothly and that the desired innovations are implemented. Delivering connectivity from – say – London for a new branch in – say – Naples, is not part of the department’s daily tasks or routine procedures. Even ordering connectivity from the major providers of the country in which the branch is to be opened can lead to a bureaucratic nightmare. If only because of the language barrier. In some countries the branches already have to be open before the request for connectivity can be accepted. And who says large national players have the best offer in terms of price, quality and bandwidth? International management and managing connectivity is a specialized job.
Challenge 2: what do you need?
Most stores have one or more POS systems that connect with the payment provider and the central ERP system for inventory control, logistics, purchasing and financial administration. There may also be a camera registration system that is linked to an emergency room. The increasingly popular Beacons for Location Based Services need communication. And consumers expect stores to offer free Wi-Fi. More and more applications are shifting to IP. IP+ is the word, where + represents the communication protocols that specific applications use for their communication.
The type of connectivity that the retailer needs differs per formula, per application and per establishment. A Global Consumer Brand has different communication requirements in its flagship stores than a supermarket in a remote part of the country. This need has to be evaluated properly. For this reason, performing a zero assessment to determine to what extent the connectivity is in line with the company strategy and the operating procedures of the retailer is almost mandatory. And in the event of a deviation, one should always determine what should be done to coordinate the connectivity to the current and future needs. Identifying the requirements imposed on the business, for example by supervisors, is also crucial. As is determining the needs of the business.
A second issue is pinpointing the applications you want to place at several locations. Per application category, from a management and cost perspective, you have to work out the connectivity you need. Payment, for example, has a different connectivity profile than file sharing or cataloguing. Office applications are less business critical than primary applications such as CRM, ERP or process management.
The scope of the zero assessment
- Business requirements, whether or not imposed by law or the regulators
- Basic infrastructure and applications (for example, Office)
- Business specific applications (for example, ERP, payment)
- Interrelationships between data, servers, storage and networks
- The data volume per time unit (actual and expected)
- Necessary bandwidth (dimensioned or peak load)
- The allocation of bandwidth per application and per establishment.
The zero assessment shows the minimum and maximum bandwidth required and the latency effects from the perspective of the users and the applications. It also identifies the available connectivity in the various regions. Not all countries have an equally advanced infrastructure or a broad range of choices.
Based on the zero assessment, you can make choices about the use of the bandwidth. Companies often choose a one-size-fits-all approach. This is simple and uncluttered. However, I firmly believe that, from cost and risk management policy perspectives, that it is better to arrange the required bandwidth per application. It is simply not necessary to align the enterprise-wide connectivity to the peak load of a single business-critical application.
Whatever the case, one thing is certain. The connectivity has to be reliable. If connections fail, business will stop. Literally.
Challenge 3: the retailer’s mindset
In the most retail branches, margins are razor thin. And so, retailers are inclined to choose the most cost-effective solution. They tend to project the existing situation in the well-regulated business centers in other regions. And that’s where they are wrong. In terms of connectivity, standard/consumers’ DSL is very attractive. But here inexpensive is usually expensive. If malfunctions occur, you end up in the queue of the contact center. Everyone knows this situation. ‘Please hold the line. There are five people before you’. In the meantime, the queue of people wanting to pay at your checkout is growing. Also, the consumer DSL connection provider gives no guarantee as to Time-To-Repair. A few days could go by before anyone shows up. And the uptime of the connections is not guaranteed, while your Enterprise IT is standardized around strict SLAs. Connections are always overbooked. In other words, the available bandwidth during the day fluctuates and depends strongly on the geographic environment, which makes the performance of the connections unpredictable. How then, can you correctly size this?
It is better to opt for business DSL, without overbooking and with fixed SLAs and, guaranteed Time-to-Repair and performance. It may cost a little more per month, but there is a better guarantee in terms of continuity of the branches. ‘Penny-wise is pound foolish’, as the proverb goes.
Some, specifically larger chains, cannot cope with Business DSL. They need their own connections, not only between the branches, but also for communicating with data centers where the business applications run. The international dimension makes their connectivity requirements especially complex.
A successful retailer in the consumer goods segment wants to grow fast from the Netherlands into Europe. A tight plan of attack is drawn up. Everything is on schedule, until it appears that the retailer is having problems with applying data communications connections. The applications’ turn-around time has been markedly underestimated. The provider’s representatives only speak their own language. Forms and other documents also have to be submitted in the national language. The street addresses where the connections are needed are not recognized due to a misunderstanding. And without an address there is no delivery… It seems as if the planned opening date for the new stores will not be met, even though all the advertising campaigns have been planned and media space has been purchased. Luckily, Custom Connect, together with a local partner, was able to complete the project on time and ensure that the necessary connections were available on time.
Clearly, retail depends strongly on proper connectivity. Self-regulation, certainly when it comes to international expansion, will lead to a suboptimal, insufficiently robust, flexible solution and to administrative red tape. It is better to seek advice from a specialist who knows the market and can design a proper infrastructure that suits the retailer’s business, and builds and maintains it without hassle. Each application has different connectivity requirements. The trick is to choose the best providers with the best price and the highest degree of flexibility for each connection. Next you have to connect, to monitor and to manage the connections. And, of course, you have to keep a close eye on market movements and take advantage of them: what are the prices doing, what are the latest innovations. Which latencies apply and are there new entrants, etc. etc.
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