Hudson bay gift registry

When your organization is more than 300 years old, three years is a drop in the proverbial bucket.

For the Hudson's Bay Company, Canada's oldest retailer, the past three years have been a critical stage in its development, as it uses information technology to transform its business to compete in the rapidly evolving retail landscape.

At the recent CIO Summit in Toronto, David Poirier, HBC's CIO, said it's become more difficult for retailers to differentiate themselves in the marketplace -- grocery stores now have pharmacies, pharmacies are selling general purpose items, and most large department stores have access to the same brand names.

"The challenge that we had was really around the positioning of the business and what do we stand for?" he said. "We had powerful silos and we really didn't have a focus on process management."

In retail, Poirier said, it is common for stores to spend a lot of time and money enticing bargain hunters, when the most profitable approach would be to understand how to better serve loyal, frequent customers.

Since 1998, HBC has undertaken a number of initiatives to make use of technology, streamline operations and retain customers. In July 2000, the retailer announced a strategic plan to position itself as showcase for technology in the North American retail market with the help of large IT vendors Oracle, IBM and Microsoft.

Since that announcement, IBM has revamped The Bay's gift registry system, which included customer kiosks in its stores. HBC also recently relaunched its e-tail Web site, hbc.com and in May, combined its various loyalty programs -- The Bay, Zellers, Home Outfitters and hbc.com -- so that no matter which retailer a consumer patronizes, he or she earns points in the same rewards program.

For its 70,000 employees, HBC rolled out e-learning technology in June. Delivered by Bell Nexxia Inc., the solution is a Windows-based application available to employees anytime, anywhere they can find an Internet connection. Each employee has a customized home page that tracks test scores, and provides job-specific news bulletins.

HBC properties such as The Bay and Zellers fall into the category of a tier one retailer, which have revenues of $200 million or more, and includes large department stores and big box retailers, said Rena Granofsky, head of the retail technology practice with the J.C. Williams Group in Toronto. "The Bay would be at the top end of that."

In the past, she said, Canadian retailers were not early adopters of technology. "They used to be really behind their U.S. counterpoints in adopting leading edge technologies. We are seeing a move in Canada towards adopting more newer and emerging technologies."

The real question, said Granofsky, is whether retailers have the budget to take advantage of technology. A recent J.C. Williams survey found that tier one respondents were on average spending 1.2 per cent of their revenues on IT, she said, "whereas the average globally is two per cent, and the average in other industries is eight per cent."

Granofsky said most tier one retailers have put a lot of effort into building their IT infrastructure. "They perhaps fall down a little bit in terms of the Internet access they provide for the stores and in extranets." She said about half claim to have extranets and most say that in the next one to two years one of their biggest priorities is to improve collaboration with trading partners. "Of course that would demand a lot in innovative technology." Granofsky said most big retailers are getting the biggest bang for their buck out of their data warehouses and decision support systems. "They are the most effective applications for increasing sales and decreasing expenses," she said. "You can be using business intelligence to really heavily impact the customer service that you provide. However, if you take a look at customer relationship management applications, they seem to be the least effective."

As for HBC specifically, Granofsky said it has enhanced its warehouse to better handle online fulfillment. "By adopting newer programs, they're looking at having much better ability to get access to the information they need to manage their inventories more efficiently."