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Reigning over 175 home entertainment stores in 21 states, Tweeter CIO Bill Morrison looks cautiously at the calendar as the year-end holidays approach.
While many of his counterparts are trying to train oceans of seasonal employees and hoping that errors dont obliterate consumers service, goodwill and inventory accuracy, Morrison sits back, confident in the chains decision to forgo any customer-facing seasonal help.
Facing intense competition from Wal-Mart on price and less-intense assaults from Best Buy and Circuit City on customer service, Tweeter has had to opt for a different strategy—”solutions selling”—which requires a different IT strategy.
Tweeter considers its solutions approach to be a combination of in-store customer service, installation expertise and systems integration. That means that the store must understand all of the equipment the customer owns as well as whatever home entertainment gear the consumer is about to buy and what the consumer is merely salivating about.
On its own, that kind of detailed information is a CRM (customer relationship management) goldmine that few CIOs would even dream of. But instead of using CRM to build such a database, Tweeter has already created that database the old-fashioned way: customer install by customer install. And it did it without the benefit of a traditional CRM package.
“We already have a tremendous customer list,” Morrison said. “But we definitely want to now get into more of a formal CRM model.”
“We take the approach that we want to talk with our customers. Our whole sales mechanism is based on our talking—in detail—with our customers,” he said. “Part of our installation is that we go back to the customers house 10 days after installation to see how everythings going.”
Tweeter also avoids the POS (point of sale) integration problems of many of todays larger retailers. Tweeter is running on a legacy POS system (3270s running HP Unix), but Morrisons team is in no rush to upgrade. The system doesnt have the needs of a traditional POS system because its not being used as a true point of sale: its more of an order-management system.
Why? “Most of our stuff is delivered. It never sees the front” cashiers, he said.
With almost no customers buying and paying for products at the store, the problem of long checkout lines, the need to trim 40 seconds from a checkout, and the need for various self-checkout and contactless payment devices are irrelevant. Without those needs, the pressure to do a POS upgrade is considerably less. It also alleviates a healthy chunk of the typical retail needs for seasonal help.
But who is in the stores to handle all of those extra holiday sales? The regular full-timers, Morrison said. The extensive training that salaried personnel undergo makes hiring temporary sales help untenable.
“We spend a tremendous amount on training guys on technology. Theyre fully professional,” Morris said. “This is all about training your technicians. We need to have a very sophisticated and centralized support desk.”
Tweeter has hired 500 of its own installers, and those installers are working with suppliers and partners to keep databases current with better customer information. An existing customer walking into a Tweeter store would be—theoretically—told that a device being considered would conflict with something he/she already owns or is duplicative.
Next Page: Entertainment systems are like multiplatform networks.
Just Like Multiplatform Networks
Not unlike many of todays multivendor, multiplatform computer networks, its not nearly as common for one component in an elaborate entertainment system to fail as it is for one component to be conflicting with another component. Calls to any of those manufacturers are often going to be more frustrating than helpful.
Tweeter is trying to build a business around being able to diagnose and fix any problem within a home entertainment system, regardless of whether the culprit components were sold by them.
The 32-year-old chains WAN is connected by an AT&T frame relay to every store (512K) and every regional office/warehouse (a full T-1). The main systems are Windows 2003-based with a smattering of IBM applications, including AIX DB2. “We are not an Oracle shop,” Morrison said.
Morrisons primary headache? When any company moves into uncharted territory, there is going to be very little off-the-shelf packages to help. “One of our biggest IT hurdles is that we didnt have the infrastructure in place. Theres not a system out there that is the perfect installation system,” he said.
The Canton, Mass.-based company is also partnering its equipment sales and service with working with entertainment content, such as is available from cable, satellite and DVD.
Tweeter is very interested in and is “continually monitoring” the RFID space, but it hasnt made the move yet and is waiting for tag prices to drop more and for rivals to identify most of the pain points. “We absolutely do not want to be first. We want to be second or third,” Morrison said.
Far from the tight online/offline integration that a lot of retailers are struggling with today, Tweeter keeps its two channels absolutely separate, even to the extent of outsourcing all e-commerce “so they do the processing of our orders. Our channels simply do not mix right now,” Morrison said.
That is a temporary situation, though. Some Tweeter brick-and-mortar locations already have what Morrison described as a kiosk, but what is in reality a series of PCs that display Tweeters Web site—and only Tweeters Web site—for the convenience of in-store shoppers. Morrison said he would very much like to move to online purchase, in-store pickup, which means hell have to get into the traditional online-offline integration difficulties.
For now, though, Tweeter is hoping that a home integration solution focus will make the chain feel a lot less surrounded and more—forgive us—surround-sounded.
Retail Center Editor Evan Schuman can be reached at Evan_Schuman@ziffdavis.com.