Each store in the Somerfields chain uses a computer to keep track of transactions (purchases) throughout the day. The system uses real time processing so that at any time the manager of the store can check exactly how much stock there is in the shop. For example, when someone purchases something the item is passed over a bar code scanner, which records the item’s code number. This item is then immediately deducted from the stock held in a database. If real time processing was not used then the manager would not know how much stock he had in until the end of the day.
Of course not all stock is sold. Sometimes items are damaged, or wasted (eg. they go past their sell date). In these cases the stock still needs to be deducted from the database but needs to be classified as waste so that a purchase is not recorded. Staff use a portable electronic “wand” to scan the bar codes of these items. The wand uses radio waves to send its data to the main computer. They also use these wands to do manual stock takes (this is used to verify that the stock held in the computer database is correct).
Every night the store’s main computer connects to the Somerfield main frame computer. The main frame is a very powerful computer which connects to every computer in each of the Somerfield supermarkets. This computer will check the stock in each store and then automatically order new stock if it is needed. It will also change prices of stock, update the store on special offers and what to do to promote the offers etc.
Somerfield also use an Intranet to keep its staff informed about promotions, special deals, changes to policy etc.
The supermarket chain uses EFTPOS (electronic funds transfer at point of sale) so that customers can use credit and debit cards. The store prefers this method of payment to cash because there is less need for security, and also most people today shop only with cards and don’t use cash.
The biggest problem with using all of these systems is user error e.g. not scanning all items on a stock take, forgetting to record wastage etc.
Another difficulty is how to monitor short life materials or complex materials like meat (remember meat is cut before it is sold and is not always sold at the same weight).
Some large shops such as supermarkets have introduced loyalty cards. Tesco was the first to start the ball rolling in 1995 with its Tesco Clubcard.
Customers apply for a card giving their name, address, e-mail and various other personal details. In return, they are issued with a Loyalty card that resembles a credit card in size and appearance. The loyalty card contains the customer membership number. The card is swiped when the customer buys something and details of their purchases are stored on the computer system.
The customer is usually ‘rewarded’ with discounts or vouchers, typically 1p for every ï¿½1.00 spent. On first glance, this would only seem to benefit the customer as the entire scheme is free of charge. However, supermarkets also benefit in other ways.
The loyalty card allows the supermarket to build up a very accurate picture of the owner’s purchasing habits. Say for example, a new gardening magazine has come on to the market and the store wants to let potential customers know about it. The loyalty card database can be used to identify customers who regularly buy other gardening magazines. A mailing list is generated and hopefully the new magazine finds many new customers.
Another way the card can be used is to understand where customers come from in the local area, because the database contains names and addresses. If there appears to be a ‘gap’ in the locality, then it helps work out if it is worth building a new store to cover that area. So you can see the supermarket also benefits from running the scheme.
The use of ICT in supermarkets has brought about many benefits for the company. Some of them are listed below:
There is much less chance of human error when performing calculations and handling money.
Everything takes place much more quickly and efficiently.
The price of an item can be altered at any time simply by entering the new price against its barcode on the computer database.
There is no need to price goods individually so some staffing costs are reduced.
Less paperwork needs to be stored and information can be retrieved more easily.
Better stock control means that the manager knows which products are selling well and those that are doing poorly.
The computer system will automatically re-order new stock just in time to prevent the shop selling out. This means that fresher goods are always on display and reduces the amount of money tied up in stock.
On the right you can see a photograph of the stores computer system. Note the use of two mini computers for back up. If one fails the other automatically ‘ takes over. On the bottom left you can see the back-up power supplies for use in the event of a power failure. The cabinet to the right houses a modem, connecting the store’ s computer to the head office computer via telephone lines. The centre units are bar code label printers.