Inside Kmart, Sears IT
To be fair, some of the criticisms of Kmarts IT operations are for some programs that have been fixed. Still, we cant ignore history. "Kmarts systems, up until a very short time ago, were extremely archaic," said Debby Garbato, who serves as editor in chief of a monthly retail magazine called Retail Merchandiser. "For example, they had apparel on a separate replenishment system than other products, and their in-stocks were way down, all because they were really behind the times."Kmart was given some credit for being one of the first to support self-checkout, but the company recently started backing away and shutting down self-checkout, at least in certain key locations, said Neil McCarthy, the CIO for the 550-store WaWa convenience store retail chain. "I know that Kmarts IT has struggled. They were trying the self-service thing, and they yanked all that," McCarthy said. "Sears is a little more on the ball." Thats probably the perfect way to put it: "a little more on the ball" than Kmart. Thats the kind of honest compliment people used to receive on the Dean Martin Celebrity Roasts. Sears IT operational history is certainly less depressing than Kmarts, but its hardly exciting. It has periodically toyed with some cutting-edge efforts, particularly in the Web arena, such as allowing customers to try to schedule service visits. Thats tame by todays standards, but it was impressive a few years ago. The only truly cutting-edge retail player in the Sears camp is recent acquisitionee Lands End, which pioneered the virtual fitting room back in 99.Sears has never fared well with its clothing offerings, but Lands End brought it the technology to make it feasible. Beyond the e-commerce efforts, Sears integrated the Lands End apparel fulfilling technology, which is no easy feat. "Apparel is a stock nightmare. You have a million sizes and a million colors. Youre talking SKU management that is unbelievable. And in three months, all of the styles will change," Retail Merchandisers Garbato said.Sears, on the other hand, was used to stocking things like hammers and automobile gear. "Take car parts. That parts going to be there unchanged for years." So these Lands End folk are now part of the Sears IT team, at least until the layoff fairies pay them a visit. Web integration can be perplexing, even for technology leader BestBuy. To learn how it aced technology but flunked communication, click here. Even if we assume that the best and brightest wont be laid off, Sears and Kmart are likely to lose many of them during the weeks and months of transition, as everyone knows that there will be massive layoffs but nobody knows where. It doesnt take a fortune teller to predict that some top talent is going to run off to find more stable surroundings. Perhaps those open arms will belong to Target or Wal-Mart. Yankees Fontanella urges observers not to play down the importance of the IT component. "On the scale that [the combined companies] will operate, technology is essential. The [combined] company must become more technically adventurous as it drives for differentiation," he said. "Unlike the direction that Kmart took four years agowhich almost resulted in the destruction of the companytechnology must be viewed as the enabler for business success, not the cause," Fontanella said. "Store format, operating procedures and target demographics differ widely within the new entity, which makes swift and decisive action to align goals and capabilities all the more critical." Thats true. Both of these retailers do have significant differences. The target audiences alone tempt the cynical suggestion that this is a case of Where American Shops meeting Where America Shoplifts. But they also have much in common. They are major retailers with world-class brands that have been beaten up to second-tier players. Its not the synergies one ideally wants, but its a start.Retail Center Editor Evan Schuman has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop any time soon. He can be reached at Evan_Schuman@ziffdavis.com. To read earlier retail technology opinion columns from Evan Schuman, please click here. Check out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.
To read about how another major clothing retailer learned to deal with inventory and other challenges, click here.