By  on December 14, 2005

A new point-of-sale initiative is heating up in Zale Corp. stores at a time when most stores are putting technology projects on ice.

The jewelry retailer is testing a speedier checkout system this holiday season, when store technology changes — no matter how small — are usually suspended so as not to risk losing sales to a computer glitch. "Typically, retailers don't install from Nov. 1 until about Jan. 10," said Greg Buzek, president of IHL Consulting Group of Franklin, Tenn. "It can be done, but most people don't want the added headaches."

For the $2.4 billion volume Zale, which generates about 41 percent of its annual revenues during the November-January period, testing POS at this time might seem dicey. But Zale senior vice president and chief information officer Ashlee Aldridge would say: Not so fast.

Because this first wave of new POS technology involves less than 4 percent of all locations, and will be deployed across several Zale's retail formats, the potential for disruption in any one brand is minimized, said Aldridge.

"Changing the point of sale creates some sense of anxiety, but we are doing it on a manageable schedule," she told WWD last month, when 28 stores were live on the new platform. By the end of the holiday season, up to 90 of Zale's 2,300-plus locations will have the new system.

"We are able to absorb [change] a lot better this way," said Aldridge. Rollout to all locations, including mall kiosks, is planned for the next few years and will be coordinated with stores' opening, remodeling and relocation schedules.

With network upgrades, high-speed thermal printers that generate color receipts 10 times faster and touch-screen interfaces for sales associates, Zale aims to shorten checkout time to 30 seconds or less.

The new POS system being tested includes hardware from Dell, software from Datavantage and database technology from Microsoft. Network hardware, including in-store routers, is provided by Cisco Systems; network security software is from Sygate Technologies of Fremont, Calif., and network services are from AT&T.

This fiscal year, Zale has budgeted $13 million for infrastructure and store technology investments, including the new POS system, Aldridge noted.The POS upgrade is part of a broader growth initiative launched about 18 months ago to boost market share, enhance the supply chain and improve customers' experience in stores not only with speedier checkout but also more knowledgeable sales associates.

By the end of fiscal 2006, about 3,000 Zale employees will have completed diamond certification training offered through the Diamond Council of America of Nashville, said David Sternblitz, Zale's vice president and treasurer. He said a well-trained, more confident sales associate delivers a better experience for shoppers.

Prior to partnering with DCA on the diamond certification program, Sternblitz said training was inconsistent across Zale's brands, which include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Bailey Banks & Biddle Fine Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda mall-based kiosks and carts.

In 2006, Zale plans to test an integrated merchandise management system that runs off enterprise resource planning software, SAP R/3 from SAP, to deliver real-time data and greater supply chain visibility, Aldridge said. Such a system will support Zale's drive to tailor merchandise by location based on local demographics and sales history, said Sternblitz.

To keep multiple technology and business improvement projects on track, Zale created a strategic project management office supported by change management professionals and analysts, Aldridge said. In addition, the company hired Accenture to act as a business adviser. "A project management office is essential to be accountable to the board, stakeholders and to live up to the commitment" of large business initiatives, said Janet Hoffman, managing partner of Accenture's North American retail practice. Without a PMO, she added, projects are delayed, go over budget and often fall short of the scope and functionality they set out to achieve.

"Ultimately, we are looking forward to standardizing our business processes," said Aldridge.

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