Conquer The POS Rushing Game
After only two years in the business, VAR One Source Solutions executed a software overhaul so it could compete in the nearly $3 billion National Football League merchandise market.
Factors beyond athletic ability can make or break a football game. Consider the presence of the "12th Man" (the 80,000 screaming fans in the stands) that renders the booming voices of opposing quarterbacks inaudible, or the thin air of Denver's INVESCO Field at Mile High that leaves would-be tacklers gasping for air as altitude-seasoned Broncos speed by. And, when teams that play home games on Astroturf in climate-controlled domes are greeted by the stark realities of stadiums like Green Bay's Lambeau Field in January, game plans can indeed be disrupted. In the NFL (National Football League), the mas-tery of disparate playing fields must be achieved to be competitive. Can the same be said of POS (point of sale) VARs?
While the environment is expected to change from installation to installation, a minor tweak (e.g. a new module or interface) usually keeps a POS VAR in the game. But it's not always that easy when the switch is to a new vertical. Not long after One Source Solutions, Inc. (Edison, NJ) signed with the Redskins Store, a merchandise and apparel chain based at FedExField (home of the Washington Redskins) in March of 2001, it realized it needed to change its product offering to compete in the new market.
New Markets, New Challenges
One Source's background was mainly in the retail shoe vertical. The three principals of the company had worked together at a leading shoe retailer, and many of its early clients were attained through contacts made there. Taking on a major stadium merchandise customer would present unique challenges the VAR never saw in more traditional retail settings.
Upon its hiring by the Redskins Store, One Source immediately recognized the store's biggest pain point. "Credit card processing was taking up to 25 seconds per transaction," says One Source VP of Operations John Ford. Consider the problem that creates at halftime. FedExField seats 80,116 fans, and even during .500 seasons like 2000 and 2001, the team sells out every game. Halftime is 20 minutes long, so at 20 seconds per transaction, the best halftime statistic the Redskins Store could hope for would be to process around 60 customers per station during the break. Then One Source encountered Celerant Technology (Staten Island, NY), which offered QuickCharge, a credit card processing solution that connects directly to credit authorization clearinghouse Paymentech via encrypted data transmission over the Internet. Celerant claimed it could achieve one- to two- second authorization times with QuickCharge.
One Source wanted to interface its vendor's product with the Celerant solution, because as Ford puts it, "when your business is mainly selling one software, you don't look to change it. That's too huge." But Celerant wasn't interested in forking over its proprietary solution, so it was decision time. One Source President Tim O'Handley took a close look at adding Celerant's entire Retail Management System (RMS), which included QuickCharge, to One Source's repertoire. Ford, O'Handley, and VP of Sales Jose Chas did their due diligence and visited sites that ran the software, in the end deciding they liked the package enough to offer it. That meant One Source had to cut its contract with the software vendor that gave the VAR its start in the business and draft a new vendor to help the Redskins compete in the NFL merchandising market. It also required One Source to convince its existing customers to buy into the new vendor's software.
Recognize When It's Time To Change Vendors
Decisions like this aren't made lightly. How did One Source know risking the loss of its original vendor was the right thing to do? "The benefits were clear to us," Ford says. "Celerant's RMS offered live data, excellent wireless applications [see wireless and vendor sidebars on this page and page 50], QuickCharge for credit card processing, and they're headquartered in New York City, not far from our office." Ford says One Source briefly considered attempting to sell both products, but was dropped by its old vendor around the same time his company decided against the idea. Unfortunately, that meant no more access to upgrades or vendor support for One Source customers. So, how does a VAR go about convincing its customers to stay with it through such a major switch? "Fortunately, after we became Celerant dealers, we found that our customers didn't want to leave us," says Ford.
A major reason for the lack of attrition was Celerant's "live data" reporting capability. When a clerk rings up a sale at the Redskins Store, the POS station sends the transaction information to a local store-level application server, then on to a physical server and database in One Source's office via encrypted communication over the Internet or a VPN (virtual private network). The constant, real-time communication with the database on a transaction-by-transaction basis creates "live data," which gives One Source's customers the ability to see up-to-the-minute sales trends instead of having to wait hours, days, or more for the database to be polled and reported on. "Live data is important because of reaction time. In this market, most stores have to be very tight on inventory. Live data promotes transfers between stores when inventory is needed, rather than buying additional inventory," says Ford.
"We still have a few clients that run the old software and we still support them, but we can't upgrade them, and they know it," Ford says. He thinks the fact that those customers are sticking with One Source will pan out when it comes time for an upgrade.
Making A Case For Software Conversion
The Redskins Store was the first of One Source's clients to make the conversion. Convincing the franchise to switch wasn't hard, Ford claims. After all, they were the primary reason for the switch. In One Source's typical Celerant demonstration for potential customers, it inputs actual information gathered from the customer rather than generic data, creating a real-life view of the way Celerant would look in the specific installation. This way, the VAR says it doesn't have to make ROI promises in its sales presentations. "We don't promise customers they'll save x amount of dollars with our solution," Ford admits. Instead, One Source focuses on helping the customer identify cumbersome areas of its business. "Using their own data, we show them how we can fix their problems. Nine times out of ten they'll be able to see just how powerful our solution can be." In the case of the Redskins Store, it was hard to argue with a 20-second improvement in transaction speed.
Add WMS To Your Playbook
One Source is focusing on building its relationship with Celerant and converting customers right now, but Ford is looking forward to the day that his company expands its horizons to include an integrated POS/warehouse management solution, which he says Celerant RMS lends itself to. One Source has already written a UNIX warehouse management software solution for Candies Shoes that integrates an RF (radio frequency) system and EDI (electronic data interchange). Ford says that interfacing such a warehousing solution with Celerant will be a focus at One Source late this year. In the meantime, the VAR is showcasing its installation at FedExField to other pro sports franchises. Ford hopes the dozen or so stadiums it's currently in discussions with will choose to avoid intermission blitzes by using One Source Solutions.