Expanding ties to buyers

Longs is just the average corner drug store in a retail world with lots of corners.   The sixth largest drug store chain in the United States has staked out spots on the Web, in call centers and in 420 stores on the West Coast.
Written by Chris Gonsalves, Contributor

Longs is just the average corner drug store in a retail world with lots of corners.   The sixth largest drug store chain in the United States has staked out spots on the Web, in call centers and in 420 stores on the West Coast. In the language of the industry, Longs has more ways to greet customers than Carter has Little Pills. And they've just added more.

Longs Drug Stores Corp. is the first customer of a comprehensive e-commerce services package from broadband services company NextLink Inter active and consulting giant Deloitte Consulting.

The Integrated Multi-channel Retail Solution promises to tie all segments of a retail organization together, integrating customer interactions across the Web, across call centers and in the stores themselves.

For Longs, that means that over the next year, customers will be able to place orders on the Web, make changes at the call center, pick up orders in a store, and be greeted with personalized information in all three places based on past prescriptions and retail purchases.

"Our focus is to bring Longs to the customer in a variety of ways ... Internet, phone, e-mail and in stores ... that all integrate with each other," said Longs' CIO, Brian Kilcourse, in Walnut Creek, Calif. Implementing the Next Link/Deloitte service "defines us as a customer-centric company," Kilcourse said.

At the heart of the multichannel retail service, unveiled last week by NextLink, of Boulder, Colo., and New York-based Deloitte, is a combination of converged voice and data technology (including interactive voice response and speech recognition), middleware hooks into the predominant retail back-end systems, clever use of wireless devices by both shoppers and store clerks, and five data centers to house the wealth of information gleaned from every customer contact with the business.

"All of the resources of a retailer should be available to the customer regardless of the store they happen to be in or whether they're on the Internet," said NextLink Interactive President David Runge. "We feel this is the kind of service retailers are demanding and ... will continue to demand."

"We've been out talking with retailers and categorizing the problems they are facing," said Rich Tragan, a partner in the Consumer Business practice at Deloitte Consulting. "What we've built ... is a commercial product that is up and running and is tested. It is ready."

The goal is to give any retailer a number of highly personalized contacts with customers through handheld terminals, point-of-sale devices, call centers, store kiosks and the Internet.

Such "smart shopping" can help brick-and-mortar retailers compete more effectively with Web-only stores, NextLink's Runge said.

While the system succeeds in sending customer information to all parts of the retail enterprise, that data sharing does raise privacy issues, especially in the case of a drug store with sensitive prescription data.

"We would be lying if we said that wasn't a concern," said NextLink Interactive's vice president of marketing, Dennis Kyle. "But [this system] is pretty bulletproof. We put a lot of effort into keeping data secure and private."

Longs' Kilcourse said his company demanded "a central secure repository of all the information we have about customers."

While all the tools of the In tegrated Multi-channel Retail Solution will be available for purchase, NextLink and Deloitte are pushing the service as a hosted offering that makes implementation easier, reduces upfront costs and provides a guaranteed uptime of 99.7 percent, according to NextLink's Runge. In the application service provider model, upfront costs "are in the low millions, with recurring costs in the low hundred [thousands]," he said.

The service is aimed at the top 300 retailers in the United States, including pure-play dot-coms, he said.

A 'real-world' look

"This addresses the trends toward improving [customer] collaboration and interaction over the Web and merging the Web with real-world operation," said Chris Hoffman, an analyst at Inter national Data Corp., in Framingham, Mass.

Hoffman said the service was strongly targeted to drug stores and Longs Drugs in particular, "but odds are that it can be successfully modified and rolled out for other retailers."

NextLink brings to the deal its converged voice and data services, the data centers it acquired with its purchase of Concentric Network Corp., and the communications technology of its parent company, carrier NextLink Communications Inc. Deloitte Consulting will provide systems integration, implementation, sales and support services.

The Integrated Multi-channel Retail Solution is built around middleware from Vitria Technologies Inc. and is hosted on Sun Microsystems Inc.'s Solaris platform.

It uses technology from a number of vendors, including networking gear from Cisco Systems Inc., PBXes from Lucent Technologies Inc., Web servers from Netscape Communications Corp., e-commerce applications from BroadVision Inc., customer relationship technology from Siebel Systems Inc., Oracle Corp. databases and enterprise management software from Tivoli Systems Inc.

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