Retailers such as Saks Fifth Avenue that sell a lot of European-manufactured merchandise have a head start on this database expansion because the serial numbers on European products contain 13 digits. Because Saks Executive Vice President and CIO Franks started preparing for Sunrise 2005 a few years ago and has already remediated many of his systems, he’s got a good foundation for RFID.

Franks inventoried all of Saks’s systems and all of the documents Saks exchanges electronically with its 1,900 suppliers to ensure that they contain enough space for global trade item numbers and EPCs. If they didn’t, those systems had to be remediated in much the same way that Saks readied its systems for Y2K. He says that now he’s going over all the information from purchase order to advanced shipping notice to invoice to payment acknowledgement to make sure Saks is in compliance with Sunrise 2005 and therefore will be able to support RFID when the company pilots it in early 2005.

"We will approach the enhancements on a priority basis as the business value and operational necessity dictates," says Franks, none too cheerfully.

RFID Integration: Forward to the Back End

Two years ago, 7-Eleven piloted a VIP (Virtual Instant Payment) card at the 7-Eleven store inside the company’s corporate headquarters in Dallas and at a store in Plano, Texas. The VIP card was equipped with an RFID chip and functioned like a debit or credit card. By waving her VIP card near an RFID reader by the cash register, a customer could pay for purchases without having to stand in line or fumble through her purse or swipe her debit card through a reader (at just the right speed)?much as ExxonMobil customers use an RFID-enabled SpeedPass to pay for gasoline. This was the company’s first foray into RFID, and it helped CIO Morrow understand what system changes he needed to make in order to integrate this new application with the company’s back-end systems.

One of Morrow’s biggest challenges was getting information about sales conducted with the VIP card into the company’s primary store system, its Retail Information System, which provides the in-store tools for point of sale, scanning, ordering, merchandising, receiving and various other management reporting functions. "We couldn’t have a standalone transaction network and then not clear that against our product sales," says Morrow. So he had to create a service that ran on the back-office computer and pulled transactions made with VIP cards into 7-Eleven’s cash reports. He also had to make sure that the store system had a way to identify VIP card transactions, in much the same way that purchases made using cash, checks, credit cards or debit cards were identified as such. To that end, he programmed a new payment mechanism for the VIP card into the system so that when a customer wants to pay with a VIP card, a sales clerk can select "VIP card" from the point-of-sale system instead of cash, debit, credit or check.