Charging Up The Front End

In a sluggish economy, it is more important than ever for retailers to exceed customer expectations. Batteries Plus is on track to do just that with the help of a new point-of-sale system that integrates store-level and online transactions, supports electronic payments and tracks merchandise repairs.

Coming off a lucrative fiscal year that boasted double-digit growth, Batteries Plus remains “cautiously optimistic as we continue to hold our own this year as well,” said Michael Lehman, CIO for the Hartland, Wis.-based retailer.

Unlike other specialty retailers struggling to sell apparel, furniture or other general merchandise categories, Batteries Plus has been able to sustain momentum with its vast inventory of batteries, which, according to Lehman, is considered “needs-based merchandise.”

Eager to stay on track, Batteries Plus began creating a forward-looking growth plan. However, an aging POS system was proving the chain could face challenges down the road.

The chain’s seven-year-old Linux-based POS system was comprised of one application server and several front-end servers that acted as virtual private network entry points.

“While I love Linux, the operating system is character-based—this is a challenge considering we live in a graphical world,” Lehman explained.

The company’s POS software was also reaching the end of its life cycle (set to expire by the end of 2010), a factor that made it difficult to migrate toward newer functionality. For example, the growing 370-plus-store chain was already stymied with how to add mission-critical front-end operations such as PIN-based debit functionality and e-mail capabilities that would give cashiers the ability to transmit internal invoices.

These factors forced Batteries Plus to evaluate what its future could look like if it maintained its existing system. Linux historically provided the company with stability and scalability, “but as we started plotting our future goals, we also began considering the end-of-life of the product and how far it would take us looking ahead,” Lehman explained.

Batteries Plus began canvassing the POS software marketplace in late 2006 and comparing offerings from different companies. Among the chain’s top functionality requirements was a POS system that could manipulate a SQL server and support a Windows-based environment. Functionality, however, was only one pre-requisite.

“Many companies are reorganizing as we speak, making this a very scary marketplace,” Lehman said. “We wanted a company that could support our company and continue developing their product into the future.”

Out with the old: In January 2007, Lehman and the chain’s executive team met with Atlanta-based Radiant Systems. The meeting allowed the group to research the company’s features and learn about a potential migration path and engineering strategy.

Impressed with the company’s offering, the chain decided to deploy Radiant Systems’ CounterPoint SQL POS software. It is also replacing its previous system’s single server with blade technology, or a single chassis that houses multiple thin circuit boards called server blades. Each blade can be individually programmed with specific applications.

Next, Batteries Plus launched its new POS strategy, including the creation of a five-year budget that defined the time and cost needed to migrate stores to the new system, as well as the cost of new hardware and software.

This plan included transitioning to a storage area network, a high-speed, dedicated network that interconnects multiple servers, such as those used in blade configurations. The chain is centrally hosting a wide area network to support its SAN and electronic payment authorizations.

“By increasing our server count, we are on track to streamline our efficiency, which will impact our return on investment,” Lehman said.

Each store features two POS systems and also supports a back-office PC. Each POS unit has a PC and cash drawer, as well as peripherals, such as laser receipt printers, bar code scanners and a shared invoice printer. At presstime, the chain was testing a touchscreen application from Radiant.

“The goal is to determine if touchscreen technology can be more efficient and, in fact, improve processing time,” Lehman reported.

In with the new: The new software enables Batteries Plus to conduct front-end services that were previously unattainable. For example, the open Windows operating platform helps the chain to integrate PIN-based debit-card processing. It also supports the integration of its e-commerce application.

“Now we can look up orders processed at store level or online, and process returns or store credit electronically and in real time,” Lehman explained.

The new system is also automating work orders for the chain’s Tech Centers. This department rebuilds, assembles and installs new batteries to replace consumers’ worn-out battery packs—a process that was hindered by a manual ordering process. As shoppers dropped off battery packs, associates would handwrite a work order form and tape it to the merchandise.

“Too often work orders would be forgotten and not input into the system, and with no way to track orders, it was difficult to meet customer expectations,” Lehman explained.

The first corporate stores came online with the new configuration between March and June 2008. To date, 100 stores are using the new system, and the chain is in the process of converting its remaining 270 locations.

“We are off to a good start, but there is plenty of work to be done,” Lehman said. “We are halfway into our five-year plan, and we are converting the stores on a slow and steady pace.”

Batteries Plus expects to have a majority of stores completed by the end of next year.

While Lehman said it was too soon to share metrics, he reported that customer satisfaction continues to rise.

“The POS system provides more visibility into transactions, and we have many less ‘dropped balls,’” he added. “If the system remains reliable and continues to minimize our store operating costs, then we are all set.”