Private Lines
A point-of-sale system is only as versatile as the telecommunications network that supports it—a point General Nutrition Centers struggled with as it explored how to add new functionality at the front end. By dovetailing its POS hardware overhaul with a network upgrade, the chain is increasing productivity, reducing operating costs and delivering better customer service at the front end.
GNC, like many companies, once used a dial-up network to support its POS system.
“Dial-up was reliable, but it was very slow,” explained Don Fogal, director of IT, GNC, Pittsburgh, which has more than 5,200 U.S. stores, including 1,733 Rite Aid in-store locations, and is a wholly owned subsidiary of GNC Corp. “We polled our POS units overnight, a process that required several processors and multiple telephone lines.”
But as the industry made the transition to alternate payment options, including credit, debit and electronic gift cards, the chain became increasingly frustrated with dial-up: A transaction that should average no more than five seconds could take up to 25 seconds. Still, the retailer wasn’t ready to make a capital investment in a new network. Instead, it remedied the situation by adding an additional telephone line in each store to authorize and process the plastic payments.
The chain changed its mind in 2007 when it was ready to phase out its 15-year-old IBM hardware. It decided to simultaneously upgrade its POS software as well as its telecommunications network.
Eager to move beyond a distributed environment, GNC wanted an infrastructure that could support Web-based store-level applications it could manage at corporate headquarters. The ideal system also needed to deliver high-performance equipment and scalable bandwidth at a good price point.
GNC chose New Edge Networks, Vancouver, Wash., to build a private nationwide network that could power its corporate and franchised stores. The high-speed network also connects stores to the private network through four options: DSL; frame relay; EVDO, a high-speed wireless broadband standard; and Internet Protocol Security, a framework of security protocols that links frame and DSL users to private networks.
The chain installed its first store on the network in July 2007, and 100 pilot stores were live by December. GNC began its corporate storewide rollout in January 2008, and by the end of the year, 2,471 corporate-owned stores were online.
GNC quickly began ramping up front-end functionality. Beyond speedy, secure payment processing, the top applications available at the front end include centralized returns, online customer order placement, recall updates, real-time access to GNC Gold Card loyalty members’ profiles, and training modules. Real-time online access to item and customer databases has provided the company with “significant savings,” according to Jerry Werner, GNC’s CIO.
“The infrastructure has also eliminated more than 1,000 phone lines that supported an antiquated dial-up network chainwide and costs associated with maintaining them,” Werner said.
Looking ahead, GNC plans to expand its bandwidth, a move that will support video and audio, two aspects that can support full-motion training modules and the streaming of live broadcasts, including messages from the company’s CEO, Joseph Fortunato.
These efforts will keep GNC on track to achieve a return on investment by the end of the year.