Strengthening customer and supplier intimacy can be an extremely effective strategy in itself. Through making transactions and conditions in general easier and more user friendly for both customers and suppliers, the intimacy of the firm and customer/supplier will increase. This offers great incentive for both customer and supplier to continue doing business with the firm. The example, 7-Eleven store has information systems that provide such superior customer service and network reliability.
7-Eleven started out about 75 years ago as an ice-dock operator. When refrigerators started replacing iceboxes, the manager of each store asked customers one-by-one what items they’d like to stock in their new appliances. By asking customers directly and stocking only the items customers most wanted, the company grew and prospered.
Over time, the company moved away from its roots, losing touch with customers along the way. It had no means of knowing what sold in each store and allowed vendors to decide what to stock on its shelves.
7-Eleven started out about 75 years ago as an ice-dock operator. When refrigerators started replacing iceboxes, the manager of each store asked customers one-by-one what items they’d like to stock in their new appliances. By asking customers directly and stocking only the items customers most wanted, the company grew and prospered.
Over time, the company moved away from its roots, losing touch with customers along the way. It had no means of knowing what sold in each store and allowed vendors to decide what to stock on its shelves.
In 2004, 7-Eleven installed Hewlett-Packard servers and networking switches in all its U.S. stores to implement a Retail Information System. This system collects data from point-of-sale terminals in every store about each purchase made daily by its six million U.S customers and transmits the information in real time to a 7-terabyte Oracle database operated by Electronic Data Systems (EDS).
Management uses this information to identify sales trends, improve product assortment, eliminate slow-moving products from inventory, and increase same-store sales by stocking products that are high in demand. Insights gleaned from the data also help 7-Eleven develop new products such as its fresh-food offerings that attract new customers and increase transaction size.
Management uses this information to identify sales trends, improve product assortment, eliminate slow-moving products from inventory, and increase same-store sales by stocking products that are high in demand. Insights gleaned from the data also help 7-Eleven develop new products such as its fresh-food offerings that attract new customers and increase transaction size.
The system consolidates these orders and transmits them to 7-Eleven’s suppliers. Orders are consolidated four times daily, one for each U.S. time zone in which 7-Eleven stores operate. 7-Eleven’s orders for fresh food items are aggregated at 7-Eleven headquarters and transmitted to fresh food suppliers and bakeries for preparation and delivery the next day.
Thanks to information technology, 7-Eleven has come full circle in its ability to respond to the needs of the customer. By tracking and analyzing its data, it knows its customers as intimately as it did when store owners talked to each customer face-to-face.
Thanks to information technology, 7-Eleven has come full circle in its ability to respond to the needs of the customer. By tracking and analyzing its data, it knows its customers as intimately as it did when store owners talked to each customer face-to-face.
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