Arts for Retail: Using Technology to Turn Your Consumers into Customers and Make a Profit
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About this ebook
In this new guide, author Richard Halter reveals how ARTS standards can help your business turn more consumers into customers and maximize profits. You can learn how to
communicate better with potential customers;
harness the power of social retailing;
boost the success of promotions and discounts; and
organize your store to maximize sales.
Written in a language that everyone can understand, this guidebook explains how ARTS works together to help retailers and vendors. Take your business to a higher performing level and put more money in your pocket with ARTS for Retail.
Richard Halter
Richard Halter is president of Global Retail Technology Advisors, LLC, and has worked with the Association of Retail Technology Standards in helping to create standards for use in the retail, convenience, and food-service industries. He regularly trains companies on ARTS standards and how they help support retail businesses. He currently lives in Oklahoma.
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Arts for Retail - Richard Halter
Copyright © 2014 Richard Halter.
All rights reserved. No part of this book may be used or reproduced by any means, graphic, electronic, or mechanical, including photocopying, recording, taping or by any information storage retrieval system without the written permission of the publisher except in the case of brief quotations embodied in critical articles and reviews.
The views expressed in this work are solely those of the author and do not reflect the
views of the National Retail Federation or its ARTS division or any of its affiliates.
ARTS is a registered trademark of the National Retail Federation licensed nonexclusively and revocably to the author solely for this publication.
iUniverse
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Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.
Any people depicted in stock imagery provided by Thinkstock are models, and such images are being used for illustrative purposes only.
Certain stock imagery © Thinkstock.
ISBN: 978-1-4917-1552-9 (sc)
ISBN: 978-1-4917-1554-3 (hc)
ISBN: 978-1-4917-1553-6 (e)
Library of Congress Control Number: 2013921659
iUniverse rev. date: 10/02/2014
CONTENTS
Introduction
Chapter 1 What Is Retail Technology?
Section 1.1: Introduction
Chapter 2 What Is Arts?
Section 2.1: The History Of Arts (Association Of Retail Technology Standards)
Section 2.2: Arts Product Lines
Section 2.2.1: Arts Data Model
Section 2.2.2: Arts Unifiedpos
Section 2.2.3: Arts Xml
Section 2.2.4: Xml Versus Arts Data Model
Section 2.2.5: Arts Rfp (Request For Proposal)/Itt (Invitation To Tender)
Section 2.2.6: Arts Technical Reports (White Papers)
Section 2.2.7: Business Process Modeling (Bpm)
Chapter 3 How Does A Retailer Communicate?
Section 3.1: The Infrastructure White Paper
Section 3.2: Alternate Communication Protocols
Section 3.2.1: Request/Response
Section 3.2.2: Publish/Subscribe (Pub/Sub)
Section 3.3: Service-Oriented Architecture (Soa) Process
Section 3.3.1: Service-Oriented Architecture (Soa)
Section 3.3.2: The Soa Stack
Section 3.4: Master Data Management
Section 3.5: Cloud Computing
Section 3.5.1: Cloud Computing Rfp
Section 3.6: Mobile
Section 3.7: Digital Receipts
Section 3.7.1: Digital Receipt Versus Poslog
Section 3.8: Social Retailing
Chapter 4 Arts Definitions
Section 4.1: Voids Versus Cancel Versus Return Life Cycle
Section 4.2: An Item Or A Product Or Product Content Management?
Section 4.2.1: What Is A Product?
Section 4.2.2: What Is An Item?
Section 4.2.3: How Is An Item Identified?
Section 4.3: Item Descriptions
Section 4.2.4: Product Content Management (Pcm)
Section 4.4: Promotions And Discounts
Section 4.5: Calendar
Section 4.6: Tender
Section 4.7: Privacy
Chapter 5 The Customer Life Cycle
Section 5.1: Population > Visitor > Shopper > Customer
Section 5.2: Customer > Inactive Customer > Ex-Customer
Section 5.3: Influencer
Chapter 6 Get A Consumer Into The Store
Section 6.1: Why Is A Company In Business?
Section 6.2: What Is A Store?
Section 6.3: A Consumer Must Know You Exist
Section 6.4: Locations
Section 6.5: A Consumer Must Know What You Are Selling
Section 6.5.1: Advertising
Section 6.5.2: Merchandise Planning
Section 6.5.3: Product Life Cycle Management (Plm), Private Label Management
Section 6.6: A Customer Must Have A Reason To Enter Your Store
Section 6.6.1: Comparison Shopping Engine
Section 6.6.2: Customer Loyalty
Section 6.6.3: Target Marketing (Customer)
Section 6.6.3.1: Customer Application Interfaces
Chapter 7 Turn The Consumer Into A Customer By Selling Him Or Her Something
Section 7.1: A Store Must Be Laid Out To Make It Easy To Find Things
Section 7.2: It Must Drive Impulse/Affinity Buying
Chapter 8 How Do You Pay For Your Purchase? Pos—The Heart Of Retail
Section 8.1: The Evolution Of The Pos
Section 8.2: Pos Transaction State Diagram
Section 8.3: Transaction Life Cycle
Section 8.4: Transaction
Section 8.4.1: Order Transaction
Section 8.4.1.1: Order Item States
Section 8.4.2: Customer Order Transaction/Customer Order
Section 8.4.3: Retail Transaction
Section 8.4.4: The Traditional Checkout Process
Section 8.5: How To Communicate These Transactions (What Is Poslog?)
Section 8.5.1: Retail Transaction
Section 8.5.1.1: Transaction Header
Section 8.5.1.2: Transaction Body
Section 8.5.2: Split Transactions
Section 8.5.3: Poslog—The Lifeblood Of Retailing Worldwide
Section 8.5.3.1: Poslog Application Interfaces
Section 8.5.3.2: Shopping Basket For Other Applications
Section 8.6: Transaction Communication (Soa Real-Time, End-Of-Day, And Batch Process Models)
Section 8.6.1: Batch Reporting
Section 8.6.2: Real-Time Reporting
Section 8.6.3: Pos Soa Services
Section 8.7: Pos Architecture
Section 8.7.1: The Pos Architecture Components
Section 8.7.1.1: The Brains (The Pos)
Section 8.7.1.2: The User Interface
Section 8.7.1.2.1: In Retail
Section 8.7.1.2.2: In Food Service
Section 8.7.1.3: The Tax Engine
Section 8.7.1.3.1: Tax Maintenance
Section 8.7.1.3.2: Tax-Exempt
Section 8.7.1.3.3: Tax Forgiven (Tax Override)
Section 8.7.1.4: The Item Engine (Item Maintenance)
Section 8.7.1.5: The Price Engine (Price)
Section 8.7.1.5.1: How Is An Item Priced?
Section 8.7.1.6: The Inventory Engine (Inventory)
Section 8.7.1.6.1: Store Inventory Management
Section 8.7.1.6.2: Customer Inventory Management
Section 8.7.1.6.3: Inventory Management
Section 8.7.1.6.4: Item Inventory And Stock Ledger
Section 8.7.1.6.5: Item Inventory—Selling
Section 8.7.1.6.6: Warehouse Management Rfp
Section 8.7.1.7: The Tender Engine (Poslog)
Section 8.7.1.7.1: Retail Transaction—Tender—Coupon
Section 8.7.1.7.2: Retail Transaction—Tender—Authorization
Section 8.7.1.7.3: Retail Transaction—Tender—Account View
Section 8.7.1.7.4: Voucher
Section 8.7.1.7.5: Stored Value
Section 8.7.2: The Kitchen Engine—Kds (Poslog)
Section 8.7.3: Device Manager (Unifiedpos)
Section 8.7.3.1: Arts Unifiedpos Device Descriptions
Section 8.7.3.2: Signature Capture And Online-Offline Debit Rfp
Section 8.7.4: The Customer Engine (Customer)
Section 8.7.4.1: Price/Customer Interface
Section 8.8: How Do I Buy A Pos? (Pos Software Rfp)
Section 8.9: Change 4 Charity
Chapter 9 Arts Soa Interface Support
Section 9.1: Retail Transaction Interface
Section 9.2: Self-Service Order Interface (Ssoi)
Chapter 10 Make A Profit
Section 10.1: Financial Reconciliation
Section 10.1.1: Payment Reconciliation
Section 10.2: Pos Events (Control Transaction)
Section 10.2.1: Till Movement
Section 10.2.2: Store Operations Timing
Section 10.2.2.1: Day Part Scheduling
Section 10.2.3: Miscellaneous Control Transactions
Section 10.3: Inventory Control Transaction
Section 10.3.1: Vendor Management
Section 10.4: How Does A Company Know If It Is Doing Fine? The Kpi
Section 10.4.1: Business Intelligence (Bi) Rfp
Section 10.5: Pos Loss-Prevention And Exception Reporting Rfp
Section 10.6: Workforce Management
Section 10.6.1: Arts Workforce Management Rfp
Section 10.6.2: Associate Management
Section 10.6.3: What Is A Job?
Section 10.6.4: Access Control—Security
Section 10.6.5: Workstation Assignment
Section 10.6.6: Workforce Management Xml Standards
Section 10.6.6.1: Labor Schedule
Chapter 11 Global Retailing
Section 11.1: Factory Audits
Chapter 12 Arts Data Model Reports
Chapter 13 Unique Components Of Food Service
Section 13.1: Fresh Item Management
Section 13.1.1: Inventory To Transaction Link
Section 13.1.2: Item Labeling
Section 13.1.3: Recall Notification
Section 13.2: Kitchen—Procon—Nafem
Chapter 14 Forecourt Unique Components
Chapter 15 Summary
Chapter 16 Arts Product Lines
Section 16.1: Nrf Papers
Section 16.2: White Papers
Section 16.3: Arts Data Model
Section 16.4: Xml Schemas
Section 16.5: Unifiedpos
Section 16.6: Rfps
Section 16.7: Business Process Model
Bibliography
This book is dedicated to the thousands of incredible individuals involved in creating these standards. If anyone is able to teach an old dog new tricks, this group can.
I like to say I’ve been in college since 1999, and these people are my instructors.
INTRODUCTION
This is not a book about all of retailing, but rather it is about ARTS® (Association of Retail Technology Standards) support for retailing. I got started with ARTS to help create a way to easily interoperate between applications. I’m not a writer, I’m an engineer. But I thought this story needed telling.
In 1997, my company had an ASP (application service provider) model where we collected POS (point of sale) information in XML (Extensible Markup Language) and provided insight to the store operator about how his or her store was doing. In doing this, we had to interface with a wide variety of POS systems. Each had its own interface model. We had to reverse engineer many of these systems in order to find the content so we could populate our guidance. This made us intimately aware of the value of a standard interface.
My supervisor, Tim Henriksen, read the announcement about ARTS creating a group to standardize the interfaces we had been struggling to decipher. Tim went to the CEO, Jim Melvin, and the two of them decided that we needed to be a part of this. They chose me to be their representative. That led me to ARTS where I met a gentleman named Richard Mader. Mr. Mader was the executive director of ARTS. He helped create it and then ran it until his retirement in 2012. His leadership turned ARTS into an organization with worldwide impact.
When I started working in retail, I thought it would be relatively simple. After all, retail is all about exchanging goods and services for money. I give you a shirt, and you give me money—sounds trivial. Boy, was I wrong. Each area of retail is a discipline unto itself.
Companies send their smartest people to ARTS meetings. They want to present the most positive image of their company they can muster to competitors and customers. Over the years, I’ve met thousands of individuals who have helped create these standards. That comment holds true for every one of them. All of them are incredible and have in-depth knowledge of their disciplines.
After reading this book, you will not be an expert in any particular discipline. However, you will become an expert on what ARTS provides for retail.
For every ARTS standard, ARTS has a vast quantity of supporting documentation. For example, one of the most adopted XML standards, POSLog, has use cases to describe things like how to sell a shirt or how to redeem loyalty points or how to pay for the purchase with cash or credit. That standard alone has almost five hundred use cases. In many cases, including the level of detail contained in all these use cases would make a book overwhelming in its size and breadth.
It doesn’t make any sense to duplicate all the incredible work done by the thousands of ARTS participants. Instead, the level of detail included will teach how the standards relate to each other and support the retailer’s vast ecosystem. When lower-level details are required, you will be able to dig into the right technical documents from ARTS.
CHAPTER 1
What Is Retail Technology?
In the beginning, the cash from a retail transaction was stored in a cigar box. As one would expect, theft was high. To solve this, along came the cash register. These were pretty handy, but they were mechanical and slow. The next iteration, the electric cash register, was much faster but still a standalone device.
As more computers found their way into cash registers, now called point of sale (POS), retailers wanted to tie them together. The first POS interface standard was a semi–de facto standard from IBM called TLOG. It was semi-standard because there were three different versions. (I’m skipping a lot of history because it is not relevant to ARTS.)
This is where ARTS came into the scene. The industry was getting too complicated to have unique interfaces with all the applications in the enterprise. The cost of upgrading, even with the same vendors, was getting cost-prohibitive. Adding new applications was a herculean effort. In a high-paced, constantly evolving world, this was an inhibitor to the retailer in becoming and staying competitive.
Vendors initially fought standardized interfaces because they mistakenly believed that they would allow retailers to easily move to other vendors. While this sounds true, the cost of learning new applications overrides the expense of replacing someone else’s application. In addition, they were limiting sales of upgrades to their own applications.
ARTS developed an extensive inventory of standards to help solve this problem for retail. What is retail in this context? Do the ARTS standards apply to more than one industry?
I constantly hear people say, ARTS is for retail, and I work in food service (or convenience). It is totally different!
Let’s examine that. Does food service sell items? Yes. Do those items have a price? Yes. Does food service have customers? Yes. So are retail and food service the same? No. Are there things that are different? Absolutely. A food-service establishment is in effect a mini-factory where the items sold are created on the fly after the customer orders the item. But can’t the customer order a new set of built-to-order cabinet shelves? The cabinet would have a recipe
to describe how to build the cabinet. It would have a bill of materials where the parts are identified.
In the end, the difference between these two factory
orders is basically time. In food service, the time is nearly immediate because the factory is onsite. These kitchen systems are totally unique in food service. This is why ARTS has special support for the unique components in the kitchen environment.
In today’s hypermarket, traditional retailers must be able to deal with and support selling shirts, hamburgers, and fuel from the same store. To this end, ARTS has created several standards and has worked with other standards bodies to extend support for these other verticals.
This fundamental decision is in any industry, whether it is hard goods, soft goods, c-store, grocery, or food service. Basically, if people are selling items, then they are exchanging goods for tender, dealing with customers, and enticing them into their business.
Section 1.1: Introduction
We start by exploring the foundation of communicating in technology, the infrastructure. The infrastructure is how systems and applications physically communicate. Think about how many times your cell phone call drops the connection. The infrastructure supports the connection your phone has with the person on the other end. The infrastructure is what keeps dropping the connection.
ARTS has a series of white papers dealing with infrastructure. They build on each other; the first talks about the basic requests and responses model where one application requests information from another, and the responder replies with the answer. It also talks about publish-subscribe models where the sources of the message, called publishers, publish their messages directly to any applications that have subscribed to receive them.
The next white paper covers a concept called service-oriented architecture (SOA) where applications are broken into pieces called services. These services are then choreographed to perform some business function. The beauty of SOA is the way these services can be quickly and dynamically connected to create new processes. This allows retailers to quickly respond to new needs. With a set of SOA services, some of the services can be located locally within the store, and others can be located remotely.
This leads to the next white paper, which describes cloud computing. Cloud computing lets retailers optimize their infrastructure costs without impacting performance. The services defined under SOA can be optimized with respect to where they exist by putting appropriate parts of them in the cloud. Properly deciding which SOA service should belong in the cloud can provide cost-effective, responsive solutions to the retailer.
When smartphones came along, people could access these processes from virtually anywhere. The next white paper describes the various uses for mobile technology in retail. The mobile revolution led to social media, and the next white paper explains the risks and benefits of using social media in retail.
With this foundation in place, we turn our attention to the reason for retail: selling things to customers and making a profit. This part of the book is broken into three sections (with ARTS support for each).
The first step in the path is locating the store. Here’s where it gets complicated; what is a store? In today’s multichannel world, a store can be a website, a mobile application, a catalogue, or even a traditional physical store. Understanding the relationships between each is important because the retailer must be able to present a consistent look and feel in whatever channel the consumer uses.
The next section follows the ARTS Consumer-to-Customer Life Cycle Model
technical report. The life cycle describes the phases a customer follows from being in the general population to being a shopper to the important stage of being a customer. Part one of the life cycle sets the stage for getting the consumer into the store. To get consumers into the store, they need to be able to match their desires to what is being sold; advertising answers this question.
Once the consumer is in the store, turning him or her into a customer is the next section. If the consumer is a customer, then there is a loyalty aspect to enticing the customer back into the store. Customer loyalty is covered under the umbrella of targeted marketing.
Section two covers turning this consumer into a coveted customer by selling him or her something. Once a consumer gets into the store, he or she must be able to easily find out where the items they are looking for are located. This involves laying out the store properly. One of the key analytics, to seeing how efficient