Global partnerships

Scott Thompson reviews the Wincor Nixdorf-organised show, Wincor World 2011, which took place in January

In January, around 7,000 people from more than 90 countries converged on Paderborn, a German cathedral city situated in North Rhine-Westphalia, for Wincor World 2011, which had as its overriding theme: The cash revolution: the mindshift has begun. As one speaker noted, 90 per cent of all payment transactions are made in cash (it’s 82 per cent in the Euro zone). The reasons for this include anonymity, convenience and the fact that the cost of cash remains attractive. All of which puts into perspective the many, many press releases and offers of comment Retail Systems has received in the last year or so regarding the cashless society and its imminent arrival.

The focus of Wincor World 2011 was on Wincor Nixdorf’s new and further-developed solution scenarios for cash cycle automation in banks and retail enterprises. Visitors were also shown solutions that handle cashless payments, redesign branches to improve customer focus and security, as well as automate processes at the PoS. In a speech that opened the show, Eckard Heidloff, president and chief executive at Wincor Nixdorf, said that such developments formed part of the company’s innovation drive. “Even during the financial crisis we continued to invest, so we now have over 900 R&D staff, which is almost one in ten of our staff,” he commented.

Conference highlights included Honeywell’s Horst Mollik discussing the increasing importance of mobile couponing in retail. Mollik, whose company is behind the iconic Voyager handheld scanner series, kicked things off by underlining emerging trends in mobile shopping. The consumer is now taking control and has the power to shop when, where and how they want, he commented. They are using phones whilst on the High Street and expect a seamless shopping experience from brands across all channels. According to research flagged up by Mollik, in 2010 33 per cent of shoppers accessed a retailer’s site using a mobile (compared to nine per cent in 2009); 11 per cent reported having made a purchase from their phones during the recent holiday season (two per cent in 2009); 30 per cent had a good mobile experience.

“We’re moving from Retail 1D to Retail 2D, with retailers adding a second dimension to their overall business strategies regarding the customer experience,” said Mollik. “They’re now able to capture customers’ behaviour - identify, define and align offerings with what customers value, interact and engage with them in a multi-channel model, comprising in-store, online and mobile.”

In terms of mobile barcode applications in retail, he noted that more than 100 million trees are used each year in the name of paper coupons. Furthermore, the redemption rate of mobile coupons is five times higher than that of their paper counterparts. “That’s a huge impact on the environment but of course there has to be a business model as well.”

Mollik then highlighted research from Deloitte and Juniper Research. This showed that 57 per cent of consumers would like to receive mobile coupons, whilst three billion mobile coupons will have been issued by 2011. “This is a technology that’s mainstream in Japan and the US and now it’s coming to Europe, thanks in part to tie ups with the likes of Facebook and Google,” said Mollik. “Why are retailers investing in m-couponing? Cost savings, increased redemption, no change required to PoS software. You’re simply replacing printed codes with mobile. Plastic cards will disappear. We’ll see mobile couponing via in-aisle promotions, in-aisle kiosks and Bluetooth hotspots stationed throughout the store. We’ll also see mobile couponing through advertisements - advertising through 2D embedded in traditional marketing methods.”

“The world is now mobile,” he concluded. “Retailers need to connect with this. 2D barcodes enable mobile marketing applications and allow interaction and engagement with customers. Mobile bardcodes are redeemed through 2D Imager readers, which is why I like to say that Bob Marley’s Redemption Song is the soundtrack for 2D.”

Elsewhere, two Tesco presentations gave an interesting insight into the grocery giant’s relationship with Wincor Nixdorf and the challenges and issues it faces as it presses ahead with its global expansion. Jan Trhon, services manager Europe, Tesco, Czech Republic, talked about global service partnerships as a success factor for regional growth. “It’s a about expanding globally without harming regional development,” he said, adding that the retailer operates in five countries in Central and Eastern Europe, with almost 1,000 stores, nine head offices and 11 warehouses. “We want to operate them in a simpler, better and cheaper way. To do this, we need to standardise our technologies and processes and benefit from convergence (sharing resources across countries and regions).”

Originally, Wincor Nixdorf covered individual pieces of installations and provided engineering for particular hardware assets. The business grew rapidly and Wincor now installs and supports in-store systems, the local area network, back office environment and warehouses. “Why regional? It means a single strategy, standard processes, single decisions, plans, people convergence, bigger volumes.”

A key advantage is that Tesco can plan globally and act locally. Wincor is growing alongside the retailer in each country and across the region. “There have been significant savings achieved by optimisation of the service model, local area network support in the whole region provided by Wincor. Turkey is now onboard, becoming the fifth country in the region to fully adopt the Central Europe processes, conditions and ways of working. In Poland, meanwhile, there was good service performance during the Christmas period, with the number of not working tills due to IT reasons reduced to a minimum.”

What next? “The objective is to start thinking globally. The plan is to have the same service model in the UK and every other country in which we operate. I’m not sure when that will happen exactly - it might be two, three or four years away, or it might be a longer journey,” concluded Trhon.

James McNulty, head of group IT buying at Tesco, also dealt with the highly topical issue of global partnerships. He noted that the grocery giant has enjoyed a 20 year business relationship with Wincor Nixdorf, spanning 13 countries. The company has delivered 25,000 BEETLE systems in the last five years and is a system integrator in Central and Eastern Europe.

“Global partnerships help us deliver our objectives,” said McNulty. “We can deploy the Tesco operating model to all international operations, make IT work everyday, deliver IT at a reduced cost, drive innovation into our business and build strategic relationships.”

“Our international businesses benefit from shared best practice and leveraging investments made in the UK,” he continued. “We haven’t had to invest in a loyalty scheme in each market. We developed Clubcard in the UK; it’s now in nine international markets. The UK has invested £100 million plus in ordering systems in the last decade; to deploy similar systems in each new country costs just £2 million. Central Europe was able to replicate the success of the UK’s recent stock reduction programme because it used the operating model’s planograms and store routines,” McNulty concluded.

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