Systems at core of power merchandising - Wal-Mart Stores Inc - Wal-Mart

Discount Store News, June 7, 1993

Technology has provided the underpinning for Wal-Mart's power merchandising program.

The discounter has made a major investment in technology to accumulate data, Don Soderquist, Wal-Mart vice chairman, told Discount Store News. But the chain's competitive advantage isn't in how much data it accumulates, it's in how the information is used.

At Wal-Mart, technology is used to support people in making merchandising and operational decisions, said Bobby L. Martin, executive vice president, information systems. "We want to capitalize on our people's creativity, imagination, ingenuity; give them the autonomy to respond, react, be aggressive and innovative merchants - that's what retailing is all about."

The technology used at Wal-Mart ranges from POS scanning equipment and a satellite communication network to cutting edge wireless portable systems and Retail Link, the proprietary program used to share sales information with vendors.

Technology has greatly impacted how Wal-Mart executes its merchandising program. It has facilitated what Wal-Mart wants to do in the merchandising arena, Martin explained, providing information to make decisions and then know the results. It has enabled Wal-Mart to devise merchandising programs and track sales based on regional and even local buying patterns and to have vendors replenish goods faster and at higher fulfillment levels.

Wal-Mart's technology discussions use two key terms - client server network and open systems architecture - reminiscent of language used to describe the discounter's relationship with customers, employees and suppliers.

Martin said the goal of Wal-Mart's technology is to move decision making down to the level where employees interact with customers. "We have an oppportunity using technology to raise our level of expectation of what we can do in the stores, providing consistent, quality service and demonstrating value to customers."

Technology has also taken buying merchandise to a new level, he said. It has sped up the delivery of information to buyers and lets them make decisions far more frequently and effectively. It's given buyers more freedom to find new product and test new items.

The challenge, he noted, is to get people to be technology literate and make systems easier "Too often, systems are too hard to learn; to perform a task you have to learn the system instead of learning the task."

Open systems architecture means the hardware and software from different suppliers can work together, he said, providing flexibility in selecting and deploying technology and overcoming the problem of technology obsolescence.

Client server computing, he, added, means that Wal-Mart can manage and distribute information more effectively. Information can be gathered from different sources and is available all over the country. "You can move the information and processing wherever you want. Wherever a decision has to be made, all the information is right there."

Technology is changing so fast it's giving retailers the ability to make changes they couldn't do in the past, he said.

"We need to watch for new ways to communicate with customers and free up our people to work with customers and listen to what our customers want. Technology will enable us to do this as there are developments on the horizon that will allow customers to participate in communicating with our stores," he said.