In a bid to wean supermarkets off their own custom-developed and sometimes woefully inadequate software systems, PricewaterhouseCooper has set up a model' shop to demonstrate the host of decent packages now available. It's time to e-browse on the ground floor in Swindon, says Gillian Law E-commerce is the future of retail ­ or so we hear all the time. But for companies that are just starting to look at the concept, what does it all mean? How exactly does the customer's order filter through to delivery systems? How do you keep track of and look after those customers? How will back end systems change in the new e-economy? On the ground floor of a modern office building in Swindon is a "model" supermarket set up to demonstrate all these systems: how an integrated, multichannel IT infrastructure actually works and the difference it makes to management and customers. Run by PricewaterhouseCoopers, it's obviously hit a nerve: the centre attracts international retail and manufacturing management at a cost of £10,000 a day. The Retail Solutions Centre has a mini store, complete with shelves of products, an Epos till and customer "kiosk" where customers can access their loyalty card information, a warehouse, a boardroom and ­ incongruously ­ a comfortable living room for home shopping. The "managers" who show visitors round the store are PWC's retail consultants, demonstrating what's out there. Dreamed up by PWC partner David Thomas, the centre runs tours for retail companies wanting to see the best solutions in action. "The retail business is a very hands-on one," says Thomas. "You can tell people all about the latest software but they really want to see it and kick it before they accept what it can do." All interfaces and servers are up and running so clients can play with and test them to see exactly how they work. The centre demonstrates an entire company-wide system but new e-commerce technology has really driven visitor numbers in recent weeks. Thomas stresses that the site doesn't target the price-pushing end of retail thinking, but retailers who want an insight into customer needs and would like to create loyalty both on- and offline. Until recently, supermarkets have used their own custom-developed software, often running several badly integrated legacy systems. There are now a host of decent packages available; what PWC does is show management how they work. It's a fresh way to open minds and get managers thinking, Thomas says. And clients join in the role play far more than he expected. One board said they discussed things in T&K's ­ the imaginary store ­ that had never been properly discussed in the boardroom. Clients come from around the world and range from multiples' management teams to manufacturers wanting to see how their customers are developing. A visit to the centre means entering an Alice in Wonderland world: the people who were PWC suits a minute before transform themselves into store management and introduce you to their businesses. T&K's is a general retail business established in 1948, originally under the name Thomas and Kleinberger (Kleinberger is a US-based PWC partner). Its growth and expansion is charted throughout the decades, along with the technology it has used. And, critically, T&K's knows where it wants to go from here ­ here being an international retail company with a turnover of £2bn and a growing catalogue and e-business division. It sells homeware, grocery, fashion and entertainment products. The company recognises the need for good customer relationship management (CRM) and an integrated system for all customer contact whether in-store or online. A multi-channel business like this needs to have one central source of information, says e-business director (and PWC consultant) Amar Shabbir, so that customers feel they are dealing with one organisation. If they buy online, they should be able to bring things back to a store, or buy in a shop and then check their loyalty points online when they get home. New channels to be added soon include WAP phones and digital television, both of which need to be tied in to the central information system. To keep all its channels running together, T&K's runs on a SAP Retail backbone, with a data warehouse to gather all the information collected through the channels. A CRM system sits on top, in three parts. A reporting programme, Business Objects, produces regular and ad hoc reports for management, pulling together data from all areas of the business. SAS data mining software is used to analyse the information collected and identify trends in purchasing. It can pick up trends and potential customers more effectively than any human, says Shabbir, by using a complex set of algorithms to analyse every sale and find "affinity" groups. Lastly, the analysed data is fed into a campaign management programme, Valex, from software developers Xchange. It works across all channels and can plan a complex campaign involving everything from plain old paper direct mail-outs to tailored online "button" ads specific to each customer. Online sales currently only account for 5% or £8m of annual business, but T&K's expects this to grow and is putting a lot of money and energy into upgrading its website. Customers access the site at home and through instore kiosks. A Broadvision e-commerce platform supports the site and all orders placed through it, allowing the site to be customised for each customer. Three sets of information are collected about each customer: basic profile data on their age, gender, profession and so on, plus what Shabbir calls "fluffy" information on their purchasing preferences and, finally, the most useful information ­ their behaviour. When they access the website or kiosk, a customer's every click is monitored. What they look at longest, what they put in their trolley and what they don't buy. All of that information is collected and used to target promotions. A new software package about to be installed takes this a step further. Net Perceptions uses "collaborative filtering" to cross reference the products people buy and to build complex profiles of their likes and dislikes. "There are a lot of people out there who think and shop in much the same way as me," says Shabbir, "although on the surface they might seem quite different." Net Perceptions identifies those groups of people and targets them accordingly. Back in the more traditional, recognisable store set-up, each assistant carries a Symbol handheld computer with access to the central SAP system. Using these handhelds they can place orders, check back orders, access data on customers and products and swipe or scan products for inventory management as they arrive instore. Work roles can be tightly defined, so Saturday shelf fillers only have access to the information they need while management can see detailed sales data. Out in the warehouse, developments are just as exciting, though the big changes aren't quite here yet. Rockport, a soon-to-be-installed system, will allow internet sourcing of products. T&K's will be able to post its RFQs (requests for quotation) online and the software will list vendors capable of filling the requirements. Online bidding will be added later, using either Rockport or another software product. Longer term, T&K's whole inventory system will be tied to those of its suppliers so there is no need to place orders at all. Extricity middleware (for data transfer management) and i2 supply chain management forecasting software will be in place by the end of the year, bringing true business-to-business practices to retailing. Centre manager Rob Hudson stresses that the software used in the centre isn't always the best for a client. It is simply a demonstration of what is possible. PWC doesn't promote SAP Retail above other ERP (enterprise resource planning) solutions, or any of the other packages in the store. When clients come to the site it's to look at what they could be doing ­ their consultant then works through what would be best for them. "Everything here can be implemented today," stresses Hudson. "It's not a look forward to the future but an example of what can be done today in an integrated business. From the feedback we get, we think it's the only site of its kind in the world." {{MANAGEMENT FEATURE }}