IBM's TSI Integrated Retail Solution

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Right now, retailers face extremely tough competition. They are constantly challenged to cut costs, optimize processes and motivate customers more strongly to spend money. To make retailers more competitive, at the end of 2006 IBM will launch the first total store solution on the German retail market. IBM's Total Store Initiative comprises tried and trusted products plus some new ones - all of which are fully coordinated and integrated with each other.

All TSI components, from the checkout to the disposable bottle deposit automat, are coordinated with each other, can be fully integrated and can be enlarged on a modular basis at any time. Many of these products and services have been available to IBM customers for years. What is totally new is the IBM Software Integration Framework (SIF), an open integration platform. It is an IT integration and management structure based on open standards and service oriented architecture (SOA). With this infrastructure all IBM store products and all existing equipment, applications and systemscan be integrated step by step or totally, depending on customer requirements. Also new are the multimedia advertising displays for an active sales approach, and StoreScan, a tool to analyze the eight most important core processes at a store or branch.
 
Integration across the nation

To constantly offer an appropriate and adequate range of goods, the supply chain must function optimally from start to finish. What is more, up-to-date information must be available locally so that retailers can give customers comprehensive advice at any time. To perform these tasks efficiently, a retail chain's stores need solutions that (a) regulate information interchange between branches (branch server, peripherals such as checkouts, kiosk systems, etc.) and (b) enable head office to monitor and control centrally the hardware and software in the branches.
 
That in turn requires a suitable IT infrastructure that works efficiently and must function with little or no local maintenance. The IBM Store Integration Framework provides precisely these features. SIF provides the integration path that enables new applications and systems to be added to an existing infrastructure, and is able to integrate existing isolated applications and systems to protect existing investment.
The Store Integration Framework's Components are:

• The integration and management infrastructure
• Runtime services and tools
• Applications from ISVs and the IT departments of retail enterprises
• Hardware and operating system(s).

The underlying architecture is IBM's SOA (Service Oriented Architecture),which makes possible both cross-enterprise central management and decisions at store level to ensure flexible running of store applications. It is based on an IBM WebSphere remote server that comes bundled with coordinated middleware components.

These include a J2EE-compliant IBM WebSphere application server as a basis for store applications, an IBM WebSphere MQ as a platform for secure data interchange between branches and head office, and IBM DB2 information management software as a relational database for local storage of branch data. To round off the modern store management offering, the SIF comes inter alia with options to incorporate RFID components and content management systems with advertising displays. It also includes facilities to handle conversion and transfer of POS data tohead office (Transaction Log - TLOG) and access to POS data from other applications.
 
Swift Return on Investment

Better customer service and greater flexibility - from branch infrastructure management to application integration and spot-onintegration of individual components - ensure a swift return on investment. Applications can be added more quickly, more easily and more intelligently to the branch infrastructure than has previously been possible. The total cost of ownership, including the cost of expansion and adaptation of running store systems, is thereby lowered, and the open architecture also cuts the cost of evaluating, launching and running new technologies.
 
All on display

An up-to-date, targeted sales approach improves customer service, which is why the TSI portfolio incorporates advertising displays that are the core element of modern digital marketing concepts.Advertising displays in the shape of large-format TFT or plasma screens rank alongside kiosks and in-store radio as key features of modern store management. The effectiveness of product advertising on these displays has been tested in a number of pilot projects, and the results have been unambiguous, with sales up to 8% higher, sales per customer loyalty card up to 32% higher, and campaign costs down by 5% to 10%.

IBM has been working with a number of retail chains for some time to implement comprehensive dynamic digital merchandizing (DDM) concepts, of which advertising displays are a prominent feature. The IT infrastructure on which the IBM solution is based offers all the options of central or local content distribution or management. The portfolio includes both the production of content using a suitable design tool and individual management of content distribution. A key feature is that displays continue to run on a play-out logic if the connection to head office is interrupted. The IBM solution works for both small and large installations with several thousand displays and different kinds of display.
 
Checking up on the checkout

Another new TSI tool is StoreScan, a kind of individual fitness check for retail stores to identify their strengths and weaknesses, and to counteractthose weaknesses wherever possible.
 
Building on its deep retail expertise, IBM has developed a benchmark or comparative analysis tool for performance, efficiency and customer friendliness of retail stores. Optimization potential to make a store more competitive overall is identified by means of core process analysis. On the basis of eight defined processes or criteria - customer service, store management, work management, employee satisfaction, effectiveness of personnel management, layout of in-store selling area, distribution modes and IT - the store is evaluated and its rating or performance is ascertained.
 
These innovations, when fully integrated with more familiar IBM store products like their self-service checkouts, kiosks and Personal Shopping Assistants, are set to revolutionise the efficiency and profitability of the European retail market in the very near future. When all your hardware and all your software can talk to each other, your staff can concentrate on talking to your customers!