NEW YORK — Frugal, techno-savvy retailers and apparel makers are turning the Internet inside out.
Corporations, like individuals, have viewed the Internet as a forum for long-distance idea-swapping. But retailers and apparel makers increasingly see the Net as a relatively inexpensive vehicle for sharing information internally — both between departments and with branch offices and stores. The “Intranet,” as this phenomenon has been dubbed, is fast becoming the techno buzzword of the season.
Cathy Mills, vice-president and director of communications at J.C. Penney Co., explained, “Retailers have been scurrying around trying to figure out how the Internet can help them deal with the world outside their own companies.
“Is it a good advertising venue? Do people want to shop from their PCs? But while companies still have a lot of unanswered questions about the external value of the Internet, most already agree that the ‘internal net’ has a great deal of potential from an information-sharing perspective,” Mills said.
“Many large retailers are working on creating Intranets right now,” commented Carl Steidtman, a retail analyst specializing in technology at Price Waterhouse. “They are using the same protocols as the Internet to create internal systems that allow people to share data, but not worry about data security.”
“The Intranet is attractive to just about everybody,” a source at the Gap said. “It’s a technology that is just starting to catch fire with retailers.”
The Intranet is a tempting internal communications forum for a number of reasons. Training can be kept to a minimum since many employees already know how to navigate the Internet. Questions of hardware compatibility and systems interfaces are superfluous as anyone with a computer, a modem and standard Web browser software like Netscape, Mosaic or Lynx can access an internal net. And individuals can use the Intranet to readily communicate with fellow employees served by separate operational systems.
The last point is probably the biggest plus for retailers and apparel makers, as those companies may now consider pulling the plug on the huge sums they’ve allocated for facilitating communication between disparate systems. Bridging islands of information has proven an important, albeit costly, goal.
Gay Millson-Whitney, vice-president of merchandising information and Quick Response at Saks Fifth Avenue, believes the Intranet will give retailers more bang for their buck.
“We’d be able to give people desktop access to a great deal of information without investing in hardware and software upgrades,” she said. “Right now we are upgrading to Pentiums, but it’s unlikely we’ll ever be able to upgrade all our employees to new computers at one time. Somebody is always going to have a weaker system sitting on their desk, limiting their performance, but with the Intranet that point is moot. Even with a dumb terminal hooked up to a network, they’ll be able to access loads of information via the Intranet.”
Users would access information over an internal net the same way they would over the Internet itself, using some form of Web browser software to access home pages and pulling down menus to access further information. But to insure that the information is secure, internal nets are often linked to an internal Web server that people outside the company are unable to access. When internal nets are open to outside access, companies write “fire walls” into their software. Those walls block outside access to proprietary information.
J.C. Penney has taken a dual-pronged approach. The company lets outsiders access some Penney’s Web sites. The company has a college recruitment site, for example, and one where investors can call up Penney’s annual report. The company, however, still “doesn’t put very sensitive information on our internal web,” according to Mills.
Internet experts, however, said the fire walls companies erect to deny unauthorized people access to sensitive information are “designed to be bulletproof.”
Reebok officials see great potential in the Intranet and hope to make it accessible to company employees this year. Gary White, information technology manager, explains: “We are kicking off an Intranet project now,” he said, “but we don’t plan to actually connect to the Internet. We hope to set up a Web server for our own internal use. Our people would be able to access a number of Web home pages over it.
“My department would probably put up an MIS page where we could post notices, training materials and training class schedules that people across the company could access. Human resources wants a page, too. They would list job postings and performance appraisal forms. Corporate communications would like to produce on-line internal newsletters. They could make that page look just like their current newsletter, complete with graphics.”
White said Reebok’s sales department is offering perhaps the strongest internal support for the Intranet project.
“Sales reps want access to the Intranet so they can check style numbers and price changes,” he said. “The last thing you want a salesman to do is write up an order wrong because the printed information he’s carrying around with him contains a misprint or is out of date. And sales reps could also tap into the Intranet to make sales presentations.”
J.C. Penney has been accessing the Intranet for about a year. Penney’s early applications are aimed at getting information out to its 200,000 employees while keeping printing and paper costs down.
“Now, the main value of the Intranet is disseminating internal information,” Mills said. “Electronic information can be constantly and cheaply updated. In the past, you would have to reprint training manuals and company phone directories. And by the time you distributed them, parts of them were already obsolete. If you make those same directories available over an internal net, you can update them daily.”
But an internal net not only could cut down on paper costs. Reebok’s White say it will cut down on the number of E-mail messages employees find flashing on their screens when they get back from lunch.
“The current alternative to the Intranet is broadcast E-mail,” White explained. “Companies are globally broadcasting E-mails to all their employees whether the information pertains to them or not. That’s pretty annoying if you are a sales rep on a tight schedule accessing your E-mail from the road. You don’t have time to go through all those useless messages. With the Intranet, people would only access the information they need.”
“E-mail is the obvious alternative,” added Tom Barnett, a retail applications manager at Digital Equipment Co., “but that is not as interactive. It is dry and text oriented.”
San Francisco’s suburbs spill into Silicon Valley. So it’s not surprising that San Francisco-based Levi Strauss & Co. is especially enamored with the Intranet.
“Levi’s uses the Intranet extensively,” commented Sung Park, president of Custom Clothing Technology Corp., a Newton, Mass.-based software division of Levi Strauss & Co. “The Intranet is attractive because it’s a really cheap way to distribute information electronically, and it costs you nothing to update that information. Levi’s is using the Intranet to communicate to the field and to its plants. The interface is also very nice, and it’s easy to learn.”
Digital’s Barnett said companies considering setting up internal nets should survey internal departments to gauge whether they would make updating their internal Web sites a priority. The Intranet is only as good as the information on it, he warned.
“Many organizations are hesitant to maintain their Web sites,” Barnett said. “If employee browsers sense a lack of committment to providing and updating information on the sites, people won’t access those sites.”
Penney’s Mills agreed. “The Intranet is only as good as the information it contains,” she said.
“When we put together our internal net, we gave our departments carte blanche to set up their own home pages. We really just wanted them to get comfortable with the medium. Now, we’ve found some departments aren’t keeping the information at their sites fresh. On the other hand, the information systems people, the merchandising department, research and development, real estate and the corporate communications department are keeping their home pages very up-to-date. In the end, the departments that benefit from keeping the information at their sites up to date will do just that. Those are the departments who will stick to this project once the novelty wears off.”
Barnett added that if retailers are to use the Intranet to link headquarters with stores, fast communication links are a must.
“You have to have fast, high-quality communication links or people won’t use the internal net,” he said. “This is especially true if you are sending graphics, which take long to send.” Mills said Penney’s is trying to put all the pieces together to make the Intranet a viable option for communicating with individual stores. While almost any computer will do when it comes to accessing Penney’s internal web from desktops, sales associates and many other Penney’s employees don’t have either PCs or desks.
“We are about 65 percent there when it comes to linking up all our employees,” she said. “We’ve got 1,200 stores, so you’re talking about a real big rollout until we have everyone hooked up to our internal net. We would like to set up kiosks that computerless employees could use to access the system.”

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