The extent to which the success of retailing in general (and of the supermarkets in particular) is dependent on computer technology is greater than might be obvious to the casual shopper. The ubiquitous bar code reader does far more than save shop assistants entering items by hand. It is linked (in theory at least) to the shop's storeroom and purchasing systems, and from there into warehouse and suppliers up the value chain. But customers do not have to give a second thought to how a supermarket check-out system 'remembers' a multi-purchase discount even though the qualifying items did not pass through the scanner sequentially.
Store automation is a specialised area of the retailing business, with high profile manufacturers' names evident on the check-out equipment which appears to make it all happen. The true 'intelligence' of modern retailing is behind the scenes, of course, in the back office technology which maintains the stock records, holds commercial details such as special pricing offers, and initiates requisitions on the retailer's central warehouse or direct to suppliers.
Within that back office arena, specialist service providers have devised solutions to handle specific types of task for the retailer. These solutions are based increasingly on a limited number of IT platforms, with Microsoft Windows NT gaining strength as the universal medium of system connectivity. Investment in other platforms over the years means that there is a challenge for today's vendors to ensure the smooth integration of their own technology with the legacy systems.
It was into that rapidly changing environment that Saunders Jefferies Internet was launched in Q3 of 1997. As its name might suggest, the company is closely identified with the eponymous retail solutions company founded in 1990 on the South Coast of England. The group of which the Internet company is a part had been formed on the back of its founders' experience in manufacturing systems. Len Saunders and Paul Jefferies had recognised the opportunity presented at the time by the increasingly sophisticated demands of the retail industry.
Focusing on back office systems for retail stores, the company specialised in the extraction of data from the retail environment. This evolved into the collection and processing of credit card information from the point where authorisation has been obtained by the merchant from the card acquirer. Saunders Jefferies polls the merchants from its bureau, processes the data it receives, and then initiates the payment cycle.
The payment data collection activity enlarged progressively into more broadly-based Electronic Point of Sale (EPoS) solutions. Clients for this type of operation include Clarks Shoes. It was a relatively short step from EpoS into loyalty cards, where the company scored a notable success by contracting with J Sainsbury to process the supermarket chain's Rewards card data. Saunders Jefferies collects and processes all of the data generated by that scheme before it is passed back to the retailer.
Almost a decade after Saunders Jefferies first addressed the retail sector, the group committed to the 'step function' which could translate key aspects of its operations to an Internet platform and open up the company's strategy to a more broadly-based audience within the retail community. A career within the EPoS arena had convinced an experienced industry sales manager Simon King of the potential for Internet-based payment solutions.
King admits that he had not always been enamoured of the Internet as a commercial vehicle. "I had taken the view that the Web was for amateurs and academics. When asked to review developments in Internet technology, I started off as a sceptic, but soon came to appreciate the size of the opportunity that was being created."
That Damascene conversion found Simon King investing his own resources in Internet development tools; increasingly convinced that the way ahead lay in electronic commerce over that network. Negotiations with several potential partners identified Saunders Jefferies as probably the most empathetic of these companies, and the groups' Internet business rapidly took shape under its new MD.
Involvement in E-Christmas, the innovative industry showcase sponsored by Microsoft, rapidly found Saunders Jefferies Internet working to create a Web-based payment solution. Given that the 'engine room' of the group is the development and management of cash payment systems, this was a logical progression which essentially defined the arena in which the Internet company would be focusing its own efforts.
Simon King was keen to put clear blue water between his own operation and the phalanx of Web developers claiming to offer cash capabilities. "Where many of the early Internet developers have failed to meet customers' requirements is in their methodology. As cash payments are such a critical area of a business, it is essential that the subject is treated professionally.
"The same steps have to be followed by Web developers as by more traditional solutions developers building an application. After a formal specification, the project has to evolve through a succession of trials into a deliverable system and complete documentation."
It would be invidious to enquire why a comparatively new company like Saunders Jefferies Internet had opted headlong for Microsoft as its development platform, given that the same vendor's operating environment (Windows NTS) was already firmly entrenched within the group. But the Internet company has been working at the leading edge of its own discipline within the electronic commerce arena. There would have been no inherent reason, therefore, why Microsoft's electronic commerce strategy should necessarily have been consistent with the plans of Saunders Jefferies Internet, which would have justified an alternative development medium had such a course been appropriate. King was satisfied, however, that the most productive way ahead was to base the new operation's developments on the Microsoft eCommerce platform. "Microsoft has been expanding the Site Server product line at a pace which has made it difficult at times even for those closely involved to keep track with it. With so much experience of the Windows NT environment within the group, it was entirely appropriate that we follow the same path."
At an operational level, Simon King argued, the components of Microsoft Site Server provided a broad range of features which make Internet-based solutions easier to construct. He believes that the Active Server Pages (ASP) concept is the key to successful application building.
Similar in concept to the Visual Basic programming language, ASP was introduced in the Commerce Server 2 component of Site Server, but is a powerful tool in its own right. "There have been applications for which ASP has proved the perfect solution, outside the context of Commerce Server." He cites the example of a system built for one of the UK's major computer systems distributors. The client had required an Extranet which gave its closed user group of resellers secure access to the site in order for them to place orders on line. Requiring total integration with the customer's 'legacy' Unix-based HP computer, the application was developed primarily in Active Server Pages.
Another illustration of Active Server Pages developed by the Internet operation at Saunders Jefferies was for a complex quotation system. The company was asked to develop a Web-based application that would allow the client to respond to its own customers' enquiries, and assemble the components of an order from the suppliers whose data was to be held on the system. Integrated with an ACT customer contact database, the system generated a complete printed quotation based on confirmed availabilities.
For a new company to make an impression on a marketplace which is already well served with vendors, it must either be operating within a tightly focused niche or have found another way of differentiating it from the crowd. Saunders Jefferies Internet has followed the well-trodden route of having its services fronted by a player with an established reputation where this has appeared expedient.
As a result, the Internet developer has built a web-based payment system which is used by the ISP's such as Easynet, while it also is a business partner of the enterprising Web site developer Xplora. Simon King and his colleagues have the potential to bring to bear on customers' applications the same array of skills as the parent company. But before they can do that, they will need to convince what is often a deeply sceptical corporate MIS department of the need to involve outside consultants in a 'trivial' task such as web site implementation.
A cursory examination of many of the early commerce Web sites developed in-house would suggest that there is a strong case for bringing in a company whose expertise lies in retailing systems. As Mr King noted, however, the criterion is not whether the site is visually attractive - that helps, of course but is it functional and 'fit for purpose'? "Our role is to help businesses move forward into a new channels of distribution. If they achieve their objective, retail commerce sites will be addressed 24 hours a day and must therefore be self-explanatory in the way that the customer processes a transaction."
As retail specialists like Saunders Jefferies bring more of their customers' operations into a Web-based environment, they will need to integrate increasingly with existing electronic data interchange systems. Dominated in the UK by Tradacoms, these legacy systems will present a challenge for the new generation of open-standards vendors. "As firm believers in the principles of partnership rather than developing everything from first principles, we would look to involve one of the specialised software houses with a proven expertise in converting between Internet traffic and EDI."
To the extent that a high proportion of the sites developed by Saunders Jefferies Internet since its inception have been focused on business-to-business environments, the company is fairly representing the state of the electronic commerce industry as a whole. 'Retail' electronic commerce has been slower to take off, but this is understandable given that the business-to-consumer sector has not had the learning curve of EDI to draw upon. But awareness of the Internet as a trading vehicle is now growing rapidly amongst end users, with suppliers as diverse as record companies and supermarkets selling over that medium. If that impetus is to be turned into revenue and profit streams, the retail community cannot simply treat the channel as an extension of its shop window. Saunders Jefferies Internet would be the first to argue that it has the wherewithal to make that happen. Not eight days a week, perhaps, but just the other seven.
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