Extra Steps at Every Turn
Customer Solution Case Study
Redi-Mart / Convenience Chain Raises Profits by 30 Percent, Adds 10 Stores in Five Years
Overview
Country or Region: United States
Industry: Retail
Customer Profile
Redi-Mart's 14 Tennessee stores must rapidly sell a wide line of tobacco and convenience products.
Business Situation
To power expansion, management had to replace wildly inaccurate, time-consuming electronic cash registers. Economical automation had to attract new sales, reduce staff time on inventory and accounting, and create reliable reports to drive replenishment.
Solution
Microsoft Dynamics Retail Management System, enhancement products, and Microsoft Dynamics GP were installed smoothly—often by executives.
Benefits
· Ten new stores in five years
· Profits rise 30 percent
· Shrinkage cut to one-tenth of one percent
· CFO can handle 14 stores, not just six
· Checkout times reduced by half
· Managers define and run any report needed / “By saving money we had previously spent or lost—and by pulling in new money we wouldn't otherwise have had—we amassed the cash needed to go from four to 14 stores.”
Chris Rayment, CEO, Redi-Mart
When they bought a chain of four Tennessee tobacco and convenience stores, Redi-Mart owners planned expansion to a large chain. Friendly staff and wide product selection fueled growth to six stores, but electronic cash registers and their polling programs gave unreliable stock levels. Over-purchasing crowded the warehouse and tied up capital. Managers couldn't implement vendors’ discounts. It seemed further growth would bring insurmountable problems. Microsoft Gold Certified Partner Retail Technology Experts introduced Microsoft Dynamics Retail Management System, several enhancements, and Microsoft Dynamics GP for end-to-end chain management. Today, vendors’ discounts entice new customers, trustworthy data flows to accounting and purchasing, and careful tracking reduced shrinkage by 90 percent. Profits shot up 30 percent, even while absorbing the expansion costs of 10 new stores.
Situation
Redi-Mart is a growing chain of 14 Tennessee convenience stores. A paramount business mission is to give customers an enjoyable shopping experience as they buy cigarettes, smokeless and chewing tobacco, domestic and imported cigars, roll-your-own tobacco, and accessories. Stores sell a full line of convenience items, including drinks, candy, Tennessee lottery tickets, gasoline, beer, and, at select stores, a full line of groceries.
Extra Steps at Every Turn
Redi-Mart’s management ideas and staff's fast, cheerful service expanded stores from four to six in a year. But management spent hours manually correcting and pushing business information from electronic cash registers (ECRs) and scanners into a polling program, and then into QuickBooks Pro. Even so, inventory visibility was spotty, inaccurate, and limited. To continue expanding, Redi-Mart needed better systems.
“In spite of the claims about ECR polling programs sending POS [point-of-sale] data to QuickBooks, they emphatically did not do what they promised,” says Chris Rayment, CEO of Redi-Mart. “Results were wrong several ways. Counts were high or low. Sometimes they skipped an entire SKU. We had no perpetual inventory. We'd over-order, then pull back next week. We had shortages then surpluses. Since our stores are light on storage, that backed up our warehouse. We mistrusted results so much that, to be accurate for government and tax reporting, we manually input Z-reports into Microsoft Excel daily, then manually into QuickBooks at month-end.”
Restricted Cash Receipts
ECRs prevented Redi-Mart from participating in marketing opportunities from the tobacco industry. “That’s 80 percent of our sales, and the companies put items on and off sale for specific durations,” says Rayment. “PepsiCo or Coke might offer BOGOs. On-and-off specials and price changes are too clumsy to handle with ECRs. Then we couldn't turn out the post-promotion reports vendors need. We had to keep specials in our heads or slow our checkout lines with cheat-sheets. Far too often, I had to decline special pricing offers. That system inability cost us sales, profits, and customers.”
Redi-Mart exists in a world of tight margins. Untrustworthy inventory numbers cause unwise capital allocation that restricts growth. Retailers cannot expand without reliable data.
“ECRs gave us no way to identify theft, and too many people knew that. Managers were lobbying me for better audit trails and bulletproof security on cashiers. ECRs just don’t have the robustness for any business that wants to survive in the twenty-first century. You can’t stay profitable—you can't even exist—if you aren't on the leading edge of retail technologies. Everywhere we looked, the old system was costing us money, hours, customers, or merchandise.”
Solution
Redi-Mart's replacement IT solution needed to encompass every business operation in the widening chain that management planned. Screens had to be easy to teach, operate, customize, and maintain. Overall system scalability was a clear must.
Redi-Mart inspected several POS software applications before selecting Microsoft Dynamics Retail Management System 2.0 (RMS). Says Rayment, “We chose Microsoft Dynamics RMS for three reasons. It addresses every retail need from when a customer walks in the door, to inventorying and replenishing what they buy, to tallying receipts, paying bills, and tracking staff hours. It's reasonably priced for small businesses. And Microsoft is a stable company that will support us in the coming years. Its staying power is a big issue for us. Small software companies have fewer people, less expertise, and are less reliable.” Open-source solutions did not meet basic criteria for consideration.
Testing and Justifying the Software
“We performed extensive tests in our office to verify that Microsoft Dynamics RMS would do every aspect of our daily procedures,” Rayment explains. “I raced our cashiers in mock checkouts and Microsoft Dynamics RMS always took half the time of our ECRs.”
During two days in April 2006, Rayment installed Microsoft Dynamics RMS in six stores, with himself as the only part-time IT employee.
Sourcing software from Retail Technology Experts (RTE), a Microsoft Gold Certified Partner, Redi-Mart installed Microsoft Dynamics RMS Store Operations and
Microsoft Dynamics RMS Headquarters, which auto-polls each store to collect all sales and business data for chainwide visibility and control. Each store manages its own inventory and purchasing, while corporate monitors all metrics by store, oversees new items and pricing, and pushes out promotions chainwide.
For complete financial management, stores’ data flows into Microsoft Dynamics GP 2010, a full-function enterprise resource planning (ERP) solution that Redi-Mart acquired from Microsoft Gold Certified Partner, Saratoga Technologies.
Long-Term Confidence
“We felt very confident that Microsoft Dynamics RMS and Microsoft Dynamics GP were the right end-to-end, economical, low-maintenance retail solution,” says Rayment. “Mixing in non-Microsoft solutions might bring reliability problems. A start-to-finish Microsoft platform offers the most features and fewest concerns. It eliminates well-known costs of maintaining multiple systems and trying to integrate various platforms. Running a complete Microsoft platform allows smoother upgrading and integrating of applications, and any glitches will be fixed faster.”
Redi-Mart chose the Microsoft Business Ready Advantage plan for service and support. Rayment says, “This allows support flexibility without overburdening costs.”
Enhancements to Microsoft Dynamics RMS by Microsoft-certified software developers include RMS Mobile by Specialty Technology Solutions for inventory control. Davidson Richards provided additional functionality with its Data Management and Promotions solution. Retail Analytics & Merchandise Planning (RAMP) by Professional Advantage drives powerful reporting. MultiCat by Computer Administration satisfies tobacco-industry reporting requirements.
Benefits
By using Microsoft Dynamics RMS, profits rose 30 percent even while Redi-Mart absorbed the expense of adding 10 stores in five years. “By saving money we had previously spent or lost—and by pulling in new money we wouldn't otherwise have had—we amassed the cash needed to go from four to 14 stores,” says Rayment. “In our industry of paper-thin margins, without this new system we might not be in business. Microsoft Dynamics RMS more than paid for itself its first year. It was a smart investment, not an expense.”
New Cash Through the Doors
Increased checkout speed and accuracy help attract customers. “Another big factor in our improved profitability is now exploiting the suppliers’ promotions that we once had to pass up,” says Rayment. “To turn discounts on and off, we just enter start and end dates into Microsoft Dynamics RMS Headquarters. Davidson Richards's promotional module also gives us greater abilities to cross-market and sell more creatively and competitively.”
Savings Show Up on the Bottom Line
Redi-Mart can now monitor shrinkage better at the register, in the aisles, storerooms, and warehouse.
“Microsoft Dynamics RMS helped cut inventory shrink by 90 percent—down to one-tenth of one percent,” says Rayment. “Without this new solution, management payroll would be at least 20 percent higher. Previously, our CFO maxed out at six stores but now handles 14. That's adding stores with few new costs. An investment in IT is a one-time expense with little repetition, but continual hiring gives you high, recurring costs. Without Microsoft Dynamics RMS and Microsoft Dynamics GP, we wouldn't be in business. We couldn’t compete.”
Behind the Scenes
Redi-Mart uses Microsoft Dynamics RMS to collect the data it needs and report on it. “Microsoft Dynamics GP tells us exactly where we are day-to-day and month-to-month,” says Rayment. “Then RAMP lets us combine and report data any way imaginable by using cubes in Microsoft SQL Server data management software.”
Rayment continues, “We've absolutely improved day-to-day efficiencies. Purchasing is extremely accurate and fast. Money we once spent on slow-sell and no-sell products now goes to expansion and improvement. Microsoft Dynamics RMS has reduced time spent on daily chores like batch closings, ordering, and receiving, so managers and staff can spend more time focusing on customers. We fully trust our closing numbers. Managers and associates see how their store is doing in sales and stock levels, so they come to us with ideas.”
Redi-Mart achieved many operational savings by using this new visibility and ease of access to company data. “Microsoft Dynamics RMS reports tell you what you're selling, where, when, and how you are selling it,” explains Rayment. “You can quickly and confidently adjust for dynamic buying patterns. You're no longer trying this and trying that, hoping for success without measurable data.”
Return on Investment
Rayment explains, “Because Microsoft Dynamics RMS brings in more money than our old system, it’s actually a much lower percent of our new, higher profitability. It’s a much smarter return on investment than a basic system.”
Rayment praises working with Microsoft as a company. “Microsoft solutions are much more manageable than others we looked at. The company has vast documentation and reliable support. Its huge customer base means you can find collaborative resolutions to whatever comes up. Our partner RTE delivered a very broad package of solutions that met and powered our expansion needs,” says Rayment.
Rayment's advice to other retailers is terse: “Don’t put off installing Microsoft Dynamics RMS. Each day you delay is a day of unnecessary expenses, lost sales, and stifled growth.”
Microsoft Dynamics Retail Management System
Microsoft Dynamics Retail Management System (RMS) offers a complete store automation solution for small and midsize retailers. Microsoft Dynamics RMS streamlines point-of-sale, customer service, and store inventory management, and provides real-time access to key business metrics. Microsoft Dynamics RMS is a comprehensive solution for single-store and multistore retailers that empowers independent proprietors, store managers, and cashiers through affordable and easy-to-use automation. Microsoft Dynamics RMS has the flexibility and scalability to grow with a retailer’s business. It works with the Microsoft Office system, Windows Small Business Server, and leading financial applications to provide end-to-end support from the cash register to the back office.
For more information about Microsoft Dynamics RMS, go to:
www.microsoft.com/dynamics/rms
