Happy to be hand-held

Happy to be hand-held

JB Hi-Fi sells the latest in consumer high-tech but its own technology must also protect the brand.

While many businesses strive to appear technologically advanced, others have to be more careful about the image they project - especially when that image is associated with affordability. When JB Hi-Fi group information technology manager Geoff Craig began building a wireless point-of-sale system to replace the company's tedious manual processes, the last thing he expected was to over-deliver and have the project placed on hold.

"We began working on a mobile point-of-sale system in late 2004, and by early in the new year we were testing a prototype," Craig recalls.

"Then the whole project was put on hold, not because there was anything wrong with the solution, but because there were concerns a wireless hand-held sales tool would make us look high-tech and expensive, while our brand was associated with affordable technology."

The challenge for Craig was to create a tool that could combine product information with an invoicing system on a single portable screen.

Before the project's completion, shop assistants had to respond to product queries based on information from product manuals printed periodically and distributed in the stores.

At the time, purchases were recorded manually and in triplicate, and then typed into the company's database. Not only did the double handling and manual data entry lead to errors, it also left customers waiting in line to complete their purchase.

"The front end was all pen and paper, our sales people would wander around the store with an order book and a separate price book, and have to look up specific product information in these manuals we would print up centrally and send out to the stores," Craig says.

"We needed to automate that whole process and give staff direct access to product information, and well as indications of cross-sale opportunities."

Working with two other developers, Craig began to investigate different handheld technologies, eventually settling on the Motorola's Symbol MC50 Mobile computers, largely due to its ruggedised features.

When it came to the applications and operating system, Craig opted for Windows Mobile, running a compact edition of Microsoft SQL server and Microsoft SQL Server Express Edition to deliver the data. Using this combination, Craig was able to supply the entire company product database, with over 420,000 different skews, directly into the hands of store staff.

Twelve months after the project had been placed on hold, it was brought back to life and Craig again found himself trialling the tools in a range of stores. "It was frustrating having the project put on hold because we'd spent a fair bit of time developing a fantastic solution, but then had to wait until there was broader customer acceptance of wireless sales tools," Craig says.

By November 2005, Craig had set about equipping each store with a wireless local area network to deliver data, sales advice, pricing and invoicing facilities directly to the hand-held units.

Craig says the system has since been expanded to track sales and run incentive programs, as well as deliver training and company-wide messages.

"We can send notices directly out to every single staff member, so that everyone is on the same page.

"Not only do they have access to more product information, they are also provided with cross-selling opportunities, and advised of any discounts they are able to offer on the stock," Craig says.

While the costs of the initial technology rollout exceeded the costs associated with the manual sales approach, Craig says the automated wireless sales tools have been a significant factor in the company's expansion over the last 12 months. The handheld devices have replaced multiple systems for providing data to sales staff, as well as recording data in real time from the stores.

"We've built a fantastic training and sales recognition system which measures the success individual staff and products are having on the shop floor," Craig says. "We're able to follow staff and sales through the PDAs [personal digital assistants] down to a particular region, and we're able to track their sales and provide them with specific information they need, so it's a training tool and a data analysis tool in the one unit."

By November 2007 there were 1500 hand-held sales tools rolled out across JB Hi-Fi's Australian and New Zealand stores. Over the same period sales grew by 35.5 per cent, delivering revenues of $1.3 billion. And while he's not taking all the credit, Craig says the tools have played an important part in the growth, providing stores with increased flexibility and administration with greater insight into sales data from around the country.

"The PDAs have given us the flexibility to grow our sales and to respond to what may become a very difficult market," Craig says.

Sidebar: Ahead of the curve

In an increasingly mature technology space, where outsourcing and off-the-shelf applications have become the norm, Geoff Craig, group information technology manager at JB Hi-Fi believes internally developed IT has been an important contributor to the chain's current success.

"We need platforms that are easy to change, with readily available tools," Craig says.

"So we focus on flexible platforms and skills that are easy to source in the market."

Unlike vendor-based applications, Craig says internally developed systems provide JB Hi-Fi with a competitive edge in what is an increasingly competitive market space, help ensure the company does not become locked into specific technologies.

"Australia is a very competitive retail environment, in order to get an edge in the market you have to have access to something no one else has access to. It made sense for us to build the system ourselves, because it would be harder for others to copy what we've done, it's a point of difference no one else can access," Craig says.

The music and consumer electronics chain's recent expansion is set to continue through the coming year, and Craig is keen to see technology play a key role in underpinning the chain's plans to open 24 new stores throughout the 2008-09.

Although Craig attributes only part of this growth to the rollout of handheld units, he believes it is crucial for the company to continue to develop internal IT systems and software tools in order to stay ahead of the technology curve.

With JB Hi-Fi already on track to lift sales to $2.4 billion this year, Craig is keen to ensure technology plays a central role in the success of the chain.

"This is going to be a tough Christmas, and I want to make sure we're using technology in groundbreaking ways to make sure that we survive any downturn and come out ahead," he says.

Fairfax Business Media

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