"Did You Say Champagne or Champale?"
Southern Wine & Spirits is US's largest adult beverage distributor, controlling about 13 per cent of the market. The Miami-based company has 40,000 customers, including restaurants, bars, hotels and liquor stores, and stocks 25,000 different products in California alone. "There's not enough paper in the world for a sales force to track all the items and vintages," says vice president of sales and marketing Steven Burrows. Yet, before the wireless system, that's what they had to do. Reps would keep stacks of books in the trunk of their car so that they could have descriptions of the various brands and vintages handy.Furthermore, there was no easy way of tracking inventory or sudden price spikes, which are common in an industry where the weather plays a large role in determining both quantity and quality of the grapes.
If sales reps had improved access to inventory and price data, as well as each customer's order history, they would be more productive, Burrows believed. Based in San Francisco and responsible for Southern's Web presence (though not corporate IT), he thought that wireless devices with access to the corporate systems could do the job.
The reps thought so too. Most reported wasting several hours a day researching vintages, checking voice mail for order status, and calling the main office for inventory and price updates. They all thought that wireless devices would help them close deals and improve customer service.
Meanwhile, consultants told Burrows that making the data from Southern's mainframe-intensive back-end systems (which have been highly customised over the years and update information in batches) available to devices in real time would cost many millions of dollars. But sales reps didn't need real time info. Most gathered what they needed - such as price changes and order status - in the morning and spent the rest of the day selling. Converting the back-end systems to allow real-time inventory updates wasn't worth it. "We're not an emergency room," says Burrows.
Instead, Southern spent $US1.5 million to extend the batched data from the back-end systems to wireless devices and about $US1 million for devices for half of the company's 2000 sales employees. It will spend another $US1 million as it extends wireless devices to the rest during the next six months. An initial pilot with 20 Northern California sales reps and a second trial with 50 people in Southern California helped Burrows design the access application. Now, sales reps spend five minutes downloading updated inventory, pricing and customer information to Windows Wintel or Windows CE compatible devices through either a wireless or dial-up Internet connection. Reps can also enter sales and customer information through the devices, again either through a wireless connection or dial-up.
The benefits are twofold. If, for example, a restaurant manager wants a brand of Merlot and Southern is out of it, the rep can say so and recommend a similar wine on the spot. Also, thanks to the customer profile he just downloaded, the rep can remind the manager that he normally carries Tanqueray gin, thereby picking up an order that he might otherwise miss. Second, placing orders through the device's Web-based interface is more reliable than the old automated number-code system. With the old method, reps would find a pay phone and punch in the item number. Then they'd get a notice confirming that the order had been placed, not what the order was for. "If you wanted Beringer Chardonnay you might enter 12345," says Burrows. "But if you enter 12346 by mistake, you could get Mondavi." The mistake wouldn't be noticed until a truck delivered the order. Last year Southern saved $US150,000 in California alone by eliminating shipping mistakes.
The biggest return, however, is in increased sales. Burrows admits that attributing a percentage of increased sales to the wireless project is tricky - who's to say it isn't because you got lucky or worked harder? he notes. But by tracking order history and conducting interviews with customers, as well as considering overwhelming anecdotal evidence, Burrows credits a 1 per cent to 2 per cent increase in sales in California - about $US10 million (a figure he calls conservative) - to the wireless project.
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