IT and the warehouse store

I am sure some of you have gone to the newest warehouse club in town. It’s the S&R Price at the Fort. This is the same store management team as the Price Club in the States. Unfortunately, someone beat them to that name in the Philippines. It opened a month ago and was said to have had the best first day sales of any Price Club or Mart with more US$160,000 in sales that day. Who said we were in a recession?

The store is quite fantastic with a good mix of local and imported goods from dry canned goods, outdoor furniture to fresh seafood and produce. The look and feel is that of an American store. (Wonder why they sell TVs with 110 volts though.) A friend even thinks it smells like a US store. I am sure the pricing is in the fair value range (but not yet cheap) and should continue to go down as they build more stores in the Philippines. More stores mean more purchasing volume, more volume means better prices, better prices mean more customers. Such is the upward spiral of a good retailer.

The S&R Price is well-built as the architectural designs have evolved from setting up more than 20 of these stores globally. The floors are built to handle the traffic, while the racks are built to handle the load. If you have a chance to visit the store, look up. You will see two interesting design elements. One, you will see the use of skylights interspersed in the roof. This, I believe, saves the store in lighting bills as some of the lights can be turned off when natural lighting is available. The second one is the canvas ductwork for the air-conditioning. It is not made of metal, which saves them in material cost, installation time as well as cleaning costs. (Looks cool too!)

Now for some I.T. talk. You have to be a member to shop at this store. To get your membership card, you queue at the membership counter where they have those small digital cameras and they print your membership card in front of you. Seems pretty innocuous, but this is what gives them an ability to understand their customers better which is another edge over the local retailers. (By the way, you just paid them money to become a member, and the information about you gives them the edge. Hmmm – a bit of reverse logic, don’t you think?)

When you make a purchase, your membership number is scanned as part of the purchase. After six months, when the novelty of the store has passed, some guys in the back room with green eyeshades (they are called analysts these days) will mine that data for your spending habits. Once they understand the patterns of buying, the purchasing manager will know what to buy and their logistics manager will know when to move it to the store. This produces both better sales figures because customers get what they want, and lower inventory costs because the goods are stocked but not overstocked.

My Two Cents: This is what deregulation does. It gives better product choices, better service and better prices to the consumer. With better prices, the consumer saves more. The consumer then spends on other goods, which improves the gross domestic product of the country. (Sorry for the simplistic economics.) On the other side of the coin are the needs of some of the local retailers who have been able to profit from lack of competition, with artificially high prices for generally out-of-stock goods. Hmmm – can’t say that I can support that side of the coin.

IT and the movies

I used to watch movies at the Glorietta 4 when it first opened. It had computer terminals at the ticket counter to help you purchase your ticket and choose your seat. But I think these terminals never worked, if it did it was after a few months (quite a few) of the theaters’ launch. We always bought our tickets manually. In fact, I reserved seats from sureseats.com once, but was disappointed since it involved going to the information counter for a slip and then go to the ticket counter – a very manual process.

I now watch movies at the Power Plant. Although the choices of movies are the same, the Power Plant has better seats at higher prices, traffic is still bearable and the parking is still available (for now anyway). The Power Plant has four monitors while you are in the queue to tell you what seats are still available for which show; if it is sold out, then you do not have to queue.

At the ticket counter, you then choose your seat and pay. For indecisive folks like me, choosing a seat takes time, and therein lies a flaw, which is creating long queues at the Power Plant.

The Power Plant management can maybe set up ticket kiosks like the ones at the Singapore MRT or the HK subway, where people can do self-serve ticket purchases using a mix of cash, ATM or credit card. Seat selection can be done on a first-come, first-served basis. I think HK’s United theaters have this system in place. In Operations Management Theory, this is called increasing the number of servers without increasing headcount.

My Two Cents: Call me the queue-buster. I hate long lines.