Harrods, the world's most famous department store, is using a new £1.5m electronic point of sale system to allow it to target customer promotions, discounts and services, and integrate its growing on-line sales operation with the rest of the business.
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The move is part of a five year strategy to move the store to a service oriented IT architecture. It will allow Harrods sales staff to tailor their approach to customers based on the company's knowledge of customers' preferences and shopping habits.
David Llamas, Harrods' IT director, said, "Harrods attracts 12 million visitors a year, making it the third-most visited destination in the UK," he said. "But we also have customers who can spend £1m in a private viewing or via a personal shopper. We want every customer to have the best possible experience when they cross our threshold."
For this to happen Harrods had to reform its IT infrastructure. So far it installed a SAP ERP system for stock control and accounting. It also replaced its eight-year-old Anker tills with DigiPos Retail Blade tills and RBS-Instore epos software from Retail Business Solutions.
Harrods started rolling out the RBS-Instore epos system in its airport stores in June 2006 as part of a trial before implementing it on the 950 tills in the flagship Knightsbridge store in November.
Llamas said they used the opportunity to install applets such as dynamic currency conversion and sales for export on the tills to make transactions quicker, easier and more flexible for customers.
The retailer will also unveil a new website in August. This plus a new call centre system will share an Oracle back-end server to capture and fulfil orders. Other retailers get 15% to 18% of their sales from online, Llamas said. "We want to beat that."
The final step now is to put Harrods' restaurant onto the RBS-Instore Hospitality application for restaurant sales. "Harrods will then have a single standard uniform view of the business and the customers will have a uniform experience at the till," Llamas said.
After that, Harrods will advance work on its loyalty card system. It already has three levels from green to gold rising to black. This could affect Harrods' desire for a deeper customer relationship management system it calls clientelling.
"We want to put the details in our sales staff's little black books regarding customer preferences and shopping habits onto the system. This means all our sales staff will be able to cross-sell and up-sell via targeted promotions and discounts to individual customers. This was impossible until we got the new epos system," Llamas said.
"We have also looked into identifying customers when they enter the store, and that holds some very interesting possibilities," he said. "However, we are reluctant to do that until we have sorted out the privacy issues."
Llamas said the aim is that no matter what sales channel customers use, the 1.4 million catalogue items Harrods carries are available, presented appropriately and sold efficiently to build and retain customer loyalty.
This is tricky for Harrods because some, such as furniture, are tailor-made, and the associated data require different handling compared to fashion or food and beverages, he said.
System availability and data security are top priorities for Llamas. Under RBS-Instore the tills operate independently of a central server, but the organisation has much greater insight into what is happening at the till because of constant message passing to and from the ERP system.
Llamas said Harrods has been lucky with its timing. "We were already moving to systems that allow us, for example, to encrypt much of the data, such as credit card numbers." As a result Harrods is one of the few retailers that are now compliant with PCI:DSS, the credit firms' new data security standards, he said.
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