Microsoft Solutions for:

The Retailing and Distribution Industry



EXECUTIVE SUMMARY...................................................................................................... 1

RETAILING TODAY.............................................................................................................. 2

Market and consumer dynamics................................................................................ 2

Network retailing........................................................................................................... 4

The new supply chain.................................................................................................... 4

The information driven retailer................................................................................... 5

MICROSOFT’S RETAIL AND DISTRIBUTION STRATEGY...................................................... 6

The integrated environment........................................................................................ 6

From local to enterprise............................................................................................... 6

Microsoft’s strategy for electronic commerce......................................................... 7

MICROSOFT’S ROLE IN THE IT COMMUNITY...................................................................... 9

OLE Point of Sale (OPOS)........................................................................................... 10

Association for Retail Technology Standards (ARTS)........................................... 10

ActiveStore - the plug and play environment for retailers................................... 10

Value Chain Initiative................................................................................................. 13

Reducing the total cost of ownership..................................................................... 16

MICROSOFT TECHNOLOGY.............................................................................................. 17

Windows NT as the standard platform for retailers............................................. 17

Building open communications using intranets................................................... 17

Microsoft BackOffice - client/server in action....................................................... 18

The role of the database in the retail environment............................................. 19

Microsoft Site Server Commerce Edition............................................................... 21

Microsoft Commerce Server..................................................................................... 21

On-line payments boost electronic commerce..................................................... 22

SOLUTION PROVIDERS AND PARTNERS.......................................................................... 23

TO FIND OUT MORE.......................................................................................................... 24



Competition in European retailing over the last five years is starting to impact the structure of the industry. Consolidation among large retail chains is leading to a serious reduction in the number of players in some sectors, leading to further pressure on the small and independent retail sector. Structural changes are also being brought about by a proliferation of new retail channels and formats, creating opportunities for retailers to improve service to existing customers as well as reach new markets.

More than ever, IT systems in retailing and distribution have to focus on helping companies to take advantage of these changes. They have to be flexible, integrated, easy to use and cost-effective. And they have to put information in the hands of users throughout the organisation and beyond, enabling the creation of both physical and virtual supply chains. You will learn about how Microsoft is able to meet these requirements through technologies such as Windows NT and Windows CE, SQL Server, BackOffice and Commerce Server.

This white paper describes the competitive environment in which retailers now operate and the solutions that Microsoft and its partners can provide to give these organisations an edge through whatever combination of delivery channels they choose.


For on-line product information:



Market and consumer dynamics

Short term thinking can no longer work for retailers who, while the entrepreneurial, risk-taking spirit lives on to create businesses which have shown they can steal a sizeable share of existing markets often within a short time, may not have realised that the consumer is changing as well.

Faced with competition nationally and internationally, entrants from outside the sector, a proliferation of channels to market enabled by technology, and a generally gloomy economic outlook in most of the European countries, retailers and manufacturers are searching to see where they can either cut costs and improve turnover, while boosting quality and customer service.

As a result, the European retail industry, always dynamic, is going through radical changes in both structure and reach. With high street sales depressed even in countries that are moving out of recession, retailers are busy repositioning for the future. The most noticeable effect has been a consolidation among many of the major players. The focus has been mainly on the economies of scale that they hope to achieve by merging or the opportunity to get access to more profitable sites. But, the real interest lies in the fact that some of these retailers have seen the future and know that it will be multi-channel. One major UK mail order organisation with massive database resources recently acquired a high street catalogue retailer; together, the two businesses will be a force to be reckoned with not just in the UK but also in Europe.

Over the last three years, excitement about retailing on the Internet, the perceived potential of home shopping and the threat to the traditional store, has to some extent overshadowed the real issues. Retailers now realise that the future lies not in one channel or another, but in a mixture, in using a variety of channels to enable consumers to browse, buy and organise delivery at their, rather than the retailer’s, convenience.

This enables these retailers to protect their business from both new and existing players that can break down the traditionally high barriers to entry by using technology to go direct to customers. The number of companies now able to trade and deliver in Europe through the Internet whilst having no physical presence there will soon be countless.

The Internet and non-store shopping takes on even greater significance given that planning regulation governing physical store is becoming increasingly onerous in most developed European economies. In France, Italy and the UK, existing planning regulation is now being applied with renewed vigour and, in an attempt to support town centre shops, is slowing the development of large-scale, edge and out of town retailing. As a result, retailers are therefore having to revisit their expansion plans and force greater returns from their existing stores. Existing retail space therefore is being redeveloped, refurbished and recast in ways that will increase the diversity of retailing by both location and format.

In some areas, reaction against development by the authorities may already be too late as retailers look for expansion overseas as their domestic markets become saturated. Retailers successful in one country will seek to export the format as companies such as McDonald’s, Benetton, The Gap, Hennes & Mauritz and C&A have already done.

 Competition is also coming from abroad as large national multiples cross borders, as sporting and fashion brands create retail networks and as often tiny local businesses reach out across the world through the Internet.

While providing opportunities to some, for others, changes on the retail scene are putting pressure on already depressed margins and the uncertain economic climate in many European countries is making it even harder for retailers to map out their futures. Pressure from shareholders for greater and more sustainable returns are often resulting in excessive cost cutting and rationalisation, short term thinking that prevents the business from growing.

Short term thinking can no longer work for retailers who, while the entrepreneurial, risk-taking spirit lives on to create businesses which have shown they can steal a sizeable share of existing markets often within a short time, may not have realised that the consumer is changing as well.

Consumers’ shopping habits are changing faster than was predicted five years ago and shoppers are eagerly embracing new services such as home delivery groceries, organic food and ready-prepared gourmet meals that were once regarded as small niches.

The consumer is also becoming harder to research, measure and reach. There are now reckoned to be more than 150 loyalty schemes in the UK, most of them identical and which may yet not recoup their significant investment unless they make the next move, into personalised database marketing. Some retailers now realise that they can continue to retain their unique identity by working on the potential for competitive advantage that exists within areas such as customer segmentation, marketing, store assortment, customer care and multi-channel retailing. Whatever techniques or channels they choose, it is clear that they must have a clearer and more intimate knowledge of their existing and potential customers.

Customers are becoming more informed about shopping. Faced with a vast choice of products and services available through a growing number of delivery channels, the customer will now exercise their preferences far more vociferously. They are demanding what seems like an impossible combination of quality, low prices and excellent service. They are also putting pressure on their suppliers to match their own concerns in areas such as environmental impact, product sourcing, labelling and food production.

As a result, retailers are having to form closer relationships with consumers and consumer groups based on a more equitable and democratic exchange of value. The customer now expects to be identified by their personal preferences and buying patterns, and rewarded for their patronage in ways that are unique to them. As the retailer attempts to engage in a dialogue with customers with a view to creating long-term relationships, so the customer will expect to be given more information about all aspects of the retailer’s business.


Network retailing

The result of these competitive market and customer pressures is that traditional methods of location, distribution, delivery and customer service will no longer serve retailers to maintain a lead. Using new channels, some retailers are reaching new markets via the Internet without having to create a physical store infrastructure. Others are creating markets that were not available in the off line world, being unprofitable. Still others, lacking the resources to build independent retail networks, are creating partnerships that enable them jointly to reach the market.

In response, retailers are depending on technology to enable them to improve the speed, efficiency and payback of their existing processes and to create new ones. IT has now moved from being an operational tool, primarily aimed at improving inventory control and recording point of sale transactions. It is now an enterprise-wide mechanism for increasing efficiency throughout the supply chain and, by providing managers with business critical information on performance and efficiency, has enabled retailers to cut infrastructure costs and operate replenishment cycles that ensure that products reach customers at their convenience through different channels.

Retailers operating through a diverse number of sales and delivery channels will have to develop strategies for integrating these channels so that, instead of simply adding cost, they add value and complement one another. In this way, the customer can be offered a quick, convenient way to shop, regardless of the channel they choose. The advent of electronic shopping has increased this choice many fold and retailers will have to work even harder to raise spend and generate store and channel traffic to justify their investment.


The new supply chain

Efficient Consumer Response (ECR)

Encouraging co-operation between retailers and manufacturers in:

·   store assessment

·   replacement

·   promotion

·   product introduction

As widely distributed businesses, retailers are creating supply chains that extend beyond suppliers to business partners, channel providers and ultimately, the customer. A handful of the larger European grocery chains have been experimenting with Category Management techniques as the first stage in setting up technology-enabled networks for Efficient Consumer Response (ECR).

ECR attempts to get beyond the adversarial relationships that traditionally exist between retailers and manufacturers and encourages them to co-operate in four areas - store assortment, replenishment, promotion and product introductions - by sharing data. The idea is that retailers share EPOS data that covers their stores with suppliers who in turn share data about the performance of their products nationwide. Once shared, the theory is that the combined information could benefit both parties and help them to better meet customers’ demands.

ECR depends on networks using Electronic Data Interchange and more dynamic and low cost routes such as the Internet. Tesco, Safeway and latterly Sainsbury’s are all now using the Internet to send live sales, forecasting and promotions data to suppliers in an effort cut inventory and improve replenishment.

In multi-channel retailing, retailers cannot hope to dominate every link in the chain but they must aim to play a dominant role in the various and complex interconnections. The cost of taking a passive role in the new supply chain is a loss of visibility with the end customer and loss of market share to competitors and even non-retailers.


The information driven retailer

Frustrated by their dependence solely on the mainframe model of computing, many retailers have been moving to client/server and mixed platform computing as a way to protect investment in existing information but also to enable them to run more dynamic, network applications in store, at head office and on the move.

By integrating these multiple platforms and data sources, retailers are able to convey business information to the store manager, marketing executive, merchandiser and planner’s desktop. In turn, data is returned to create a virtuous and continuous circle of information to which any users can add value.

Systems are no longer confined to a few financial managers or specialist DP staff: buyers, fleet managers, delivery drivers, marketers, store managers, sales assistants are all playing a vital role in accurately tracking merchandise through the supply chain.



The integrated environment

While many retailers may wish that they could start from scratch and create purpose-built client/server networks around the way that their businesses do and will continue to change, most need to protect investment in legacy systems at the same time as moving onto more dynamic, open platforms. They also need to ensure that, while deploying more and more technology and software out to the business, they maintain control over core processes, including merchandise management and planning, marketing, financials, and business planning.

To achieve this goal, many retailers are implementing Enterprise Resource Planning (ERP) software. They have been driven to bring their plans forward by the need to comply with Year 2000 and European Economic Monetary Union (EMU). But, they are realising that the real benefits are longer term. ERP will enable them to build a single version of what is happening in their business at any moment and make it available to users in any part of the business. ERP suppliers therefore share Microsoft’s vision of the integrated enterprise.

Microsoft’s vision for retailers is the creation of an integrated technology environment, regardless of hardware device, software platform or application and to ensure that all components work together to serve users locally and enterprise wide. In this way, each part of the enterprise can use tools and platforms that are appropriate to their particular requirements and enable them to extract the information they need. By return, central systems will be able to use the data resulting from these tasks and extract further benefits for the whole business.

Traditional applications have tended to automate local tasks without regard to the wider benefits of data sharing and analysis, management reporting and business planning. Microsoft is now supporting a community of application developers, using Microsoft technology, to assist retailers to convert data into information to which each part of the business can add value. Retailers are now busy upgrading their infrastructures based on a series of independent networks in the form of intranets for the retailer’s own staff, extranets using Internet or leased line EDI for communications with suppliers and business partners, and even with customers. Information can then pass seamlessly between these networks as part of the enterprise-wide infrastructure.


From local to enterprise

Microsoft has created a framework of technologies that enable retailers to deploy technology in every part of their business and be assured that it is open, scaleable and interoperable. Client-server operating systems and tools provide a fully integrated environment allowing greater flexibility for turning basic sales and performance data into strategic information - and at a price which makes such technology a cost-effective enterprise-wide solution.

From simply recording sales and automating manual processes, branch systems now embrace time and attendance, merchandise planning, staff scheduling, and customer loyalty and marketing databases as well as tracking and analysis of sales and trends.

Locally, the strategy encompasses every type of point of sale, desktop back office and hand-held device required to gather and process data. The need for systems interoperability across the enterprise is essential so that retailers can take advantage of the widest possible range of multi-vendor devices for every conceivable task.

Enterprise-wide, the strategy is information networking – a complete linking of users with information via a unified client-server architecture, supporting open standards and universal connectivity.

Microsoft has created a framework of technologies that enable retailers to deploy technology in every part of their business and be assured that it is open, scaleable and interoperable. Client-server operating systems and tools provide a fully integrated environment allowing greater flexibility for turning basic sales and performance data into strategic information - and at a price which makes such technology a cost-effective enterprise-wide solution. The unified client-server architecture provides common interfaces right across the client-server spectrum with software developers and integrators able to use common tools for both aspects of the system as well as providing the broadest possible hardware and software support.

This strategy offers full scalability so that retailers, from the smallest shop all the way up to the largest hypermarket, can meet their current and future needs without the need to change operating system or core software. For instance, with small retail outlets such as Adams, Yves Rocher and Spar have chosen a low cost solution that allows room for growth. They can move from point of sale to point of service using Windows NT workstation-based GUIs that provide staff with access to better information to serve customers. As needs and applications change, these retailers need only to change hardware.

Microsoft is focused on the development of enterprise-wide, client-server operating systems and tools. Almost half of Microsoft’s PC Worldwide Product Group is involved with Windows NT, SQL Server and BackOffice server applications and development tools.


Microsoft’s strategy for electronic commerce

Microsoft has a reputation for assisting retailers to exploit the most cost-effective platforms for every level of electronic commerce, business to business and business to consumer.

This includes the automation of communications with retailers’ suppliers and business partners, be they manufacturers, wholesalers or IT and equipment suppliers. The Internet is now emerging as a secure platform for more and more business to business communication and may become a viable alternative to costly EDI networks.

In an effort to simplify Internet-based corporate purchasing for customers, Microsoft is promoting the proposed open buying on the Internet standard. The Open Buying over the Internet (OBI) standard, published in May 97, is the product of the Internet Purchasing Roundtable, a consortium of Fortune 500 buying organisations and major industrial suppliers, sponsored by American Express.

The Internet is fast becoming a fully-fledged channel for both consumer and business to business commerce. Microsoft’s strategy is based on Site Server Commerce Edition, a comprehensive system for retailing on the web enabling retailers cost-effectively to engage and transact with customers and partners online. For instance, retailers can create commerce sites and applications, targeted online advertising and marketing, and personalised promotion.

The strategy is concerned not just with the front end but with all the necessary fulfilment and management functions. Microsoft’s vision of the integrated enterprise comes into its own on the Internet. Rather than create an entirely new retail channel with the attendant infrastructure, retailers can integrate all non-store channels with their existing merchandise management, inventory, accounting, and EDI systems.



Commerce Scenarios




The success of technology in retailing depends on the adoption of standards to ensure interoperability between software and hardware devices. Few applications are independent and retailers can be liable for huge costs for systems integration unless they deploy systems under a single, integrated architecture.

Microsoft is determined to meet the IT needs of retailers in an environment where users can no longer expect a single vendor to meet all their requirements. Microsoft is a core technology provider of operating systems and tools and is ideally placed to encourage standards for retail. The company promotes integration and continues to work with the industry to reach consensus on standards issues. With the creation of ActiveStore, retailers are able to develop applications through a variety of suppliers and partners and be assured that they will interoperate. This was the first product to help the retail industry create an information systems framework that eliminates the high costs of applications integration.


Windows in Retail


OLE Point of Sale (OPOS)

The Open Point of Sale (OPOS) architecture is a plug-and-play environment that is enabling retailers to deploy best-of-breed hardware and software across a variety of hardware peripherals. This gives retailers greater choice of hardware devices and assists them to reduce their total cost of ownership (TCO).

The OPOS standard, refined through an open process forum involving some 160 software vendors, provides software developers with a device-independent interface for retail applications. By using OLE techniques defined in OPOS, developers can assemble retail solutions based on best-of-breed components to provide a totally integrated system that will encompass all business needs.

The latest version, OPOS 2.0 further protects retailers’ current technology investments. Beyond the compatibility of POS peripheral devices, OPOS now encompasses Windows CE-based hand helds, Windows Terminals, the new NetPCs and full PCs. In this way, devices will be both interoperable as well as scaleable. Software developed under multiple programming environments such as C++, Visual Basic, and Java is supported, in addition to OLE and ActiveStore.


Association for Retail Technology Standards (ARTS)

In addition, Microsoft is an active member of the Association for Retail Technology Standards (ARTS), co-chairing the group’s systems management committee with IBM. With Microsoft’s help, ARTS has already adopted its first standard, the Desktop Management Interface (DMI), which allows a management system to “look into” a PC and access information about peripherals and software. OPOS has been transitioned to the ARTS Device driver committee in the beginning of 1997.

Microsoft has made an extensive commitment to ARTS and its aim of introducing retail IT standards. Apart from its work on the systems management committee, Microsoft is also contributing expertise to a number of other working groups and has pledged that its products will remain compatible with ARTS standards. ActiveStore supports the ARTS Data model. It is also encouraging its industry partners to take a similar stance.


ActiveStore - the plug and play environment for retailers

Microsoft has collaborated with its industry partners (800 members by the middle of 1998) to develop an open Active Force environment for large retail operations that will allow business applications to work easily between vendors and help retailers to create an information systems framework that eliminates the high costs of applications integration.

Microsoft’s ActiveStore technologies-based architecture initiative addresses the risks that retailers face in deploying store-level applications by driving down costs, expanding options and easing the process of systems integration. The component-based, retail store-level architecture makes it easier for retail solutions from various vendors to work together. It enables a true plug-and-play environment, so retailers can select best-of-breed components from any source, without the cost, risk or limitations of reliance on a single supplier. The architecture covers all aspects of in-store operations including storing and retrieving data, business functions that use the data, and ways systems display information.

ActiveStore is part of a broader initiative by Microsoft to define an end-to-end framework for product-related industries, from raw materials suppliers to consumer products companies. The challenge is to take advantage of new Internet technologies while preserving existing investments in people, applications and data; build modern, scaleable computing solutions that are dynamic and flexible to change, lowering the overall cost of computing while making complex computing environments work.


For further details see:



Active Store Architecture


Digital Nervous System

Windows Distributed interNet Applications Architecture (DNA)

This framework for building computing solutions that integrate personal computing and the Internet uses:

·   Component Object Model (COM) for building modern, scaleable, multi-tier distributed component solutions that can be delivered over any network.

·   Commerce Interchange Pipeline (CIP), which extends the DNS enterprise by enabling it to communicate over a wider area.

Microsoft uses the term, Digital Nervous System (DNS) to describe the connected enterprise. Similar to the approach taken by enterprise resource planning (ERP) providers, DNS depends on the integration of systems to enable business users and partners to access and work with information. DNS depends on a PC computing architecture, all information is in digital form, universal e-mail, ubiquitous connectivity, common end-user productivity tools, and integrated business-specific applications.

The key to DNS is not just in the parts but how the elements work together. Microsoft has therefore formulated Windows Distributed interNet Applications Architecture (DNA), a framework for building computing solutions that integrate personal computing and the Internet. Windows DNA is the first application architecture to fully embrace and integrate both the web and client/server models of application development.

Using the Windows DNA model, customers can build modern, scaleable, multi-tier business applications that can be delivered over any network. DNA uses the Component Object Model (COM) for building modern, scaleable, multi-tier distributed computing solutions that can be delivered over any network.

Commerce Interchange Pipeline (CIP), part of Commerce Server, extends the DNS enterprise by enabling it to communicate over a much wider area. CIP enables businesses of all sizes to exchange information electronically. It enables application-to-application interchange of structured business information using the Internet, email, or third-party EDI Virtual Added Networks (VANs).

One of the key advantages of Windows DNA is that developers can now use the same infrastructure and tools for projects large and small. SAP AG, the world's leading provider of enterprise business applications, and Microsoft are jointly developing common interfaces for conducting business transactions over the Internet based on COM+ (an evolving extension to COM through which objects can be written in any language including Java, VisualBasic, Cobol and C++) and Business Framework&trade. SAP has also introduced the DCOM Component Connector to provide seamless, high-performance integration between BAPIs and DCOM.

This architecture complements Business Framework from SAP, which provides an open, standards-based architecture for integrating both R/3™ business components (such as financials or human resources) and non-SAP-provided components.

The architecture initiative is supported by many of the world's best-known restaurants, fashion and department stores, computer retailers and others. The ActiveStore-based, store-level architecture initiative is part of a broader initiative by Microsoft and Microsoft Solution Providers to define an end-to-end framework for product-related industries from raw materials to consumer products.

The steering committee, comprising Microsoft, Campbell Software, Fujitsu Microelectronics, IBM, ICL Retail Systems, NCR and Olsys-Olivetti Solutions, has been expanded to leverage additional expertise and further speed the development of ActiveStore, with leading European Retail solution providers such as SNI, RIVA. There are 12 members at the Euro Activestore Committee.


Value Chain Initiative

One of the largest problems facing retailers is the lack of integration and data sharing among multiple, dissimilar applications across and within the supply chain. Microsoft’s Value Chain Initiative (VCI) is a new initiative that to help retailers to extend their data sharing activities outside the enterprise, to manage business to business electronic commerce and get more value out of supply chain activities.

The VCI is a consortium of Microsoft Solutions Providers that are developing best-of-breed applications in the Supply Chain built on the Microsoft platform. Using the Internet and on-line services, VCI provides a strategy for managing all communications with suppliers and manufacturers. It aims to link all trading partners, from the largest to the smallest, within a value chain via the real-time migration of dynamic data and build new best business practices through customer-facing software.



The Value Chain Initiative


VCI reflects the fact that retailers and their suppliers are beginning to overlap their electronic commerce strategies. This is already being seen in various information exchange initiatives underway in Europe in areas such as Category Management and Efficient Consumer Response.

The vision is that monolithic corporate databases will give way to knowledge teams “owning” several small group databases. Complex business transactions that go way beyond traditional EDI messages cannot be managed through networks.

Microsoft’s role will be to take the lead in the areas of tools and platforms to make sure that these support an ever-expanding number of concurrent users and transactions. The hundreds of independent software vendors (ISVs) within Team VCI must also adapt their applications to recognise the new values of data within an electronic commerce environment and within their own applications. All Team VCI applications must be able to recognise, store, and process data that has different values during its chronological lifespan (dynamic data becomes static data upon event conclusion) and different levels of ranked importance depending on which segment of the value chain is generating or accessing it.

The VCI proposes using the Microsoft Distributed Component Object Model (DCOM) to encourage supply chain software vendors to build component based solutions that expose standard functional interfaces that allow other supply chain based applications to integrate seamlessly. From this model, even a browser-interfaced tool with Active Server Pages can migrate data within all VCI applications. Only by connecting all trading partners can ever-increasing efficiencies be driven within the millions of value chains around the world. To this end, the VCI offers the Microsoft Commerce Interchange Pipeline (CIP) as the messaging infrastructure for communicating structured business data between trading partners in a data format independent and transport protocol independent manner.

Combined, ActiveStore, OPOS and the VCI include more than 600 ISVs working toward a common architecture. Microsoft gives access to the widest choice of computing devices.

 New technology, applications and falling hardware costs are putting more and more EPOS and data gathering devices in the hands of users at every level of the retail enterprise.

EPOS systems, PCs, workstations and data gathering devices backed by Windows technology now enable collection and detailed analysis of stock, sales, forecasts, customer data and market research. As a result, retailers need to store not just text but images and graphics for store design, merchandise layout, staff training and marketing.

Windows at the point of service empowers staff so that they can find the information that the customer is requesting without having to search in manuals or ask colleagues. In complex sales scenarios, a single member of staff can perform a stock check, order an item, organise a credit agreement, schedule delivery and take payment, all from a single terminal or PC. The interfaces need to be both intuitive and powerful, often accessing external databases and ensuring that the completed transactions are sent on-line to back or head office systems.

As a result, desktop, laptop and hand-held PCs, scanners and portable EPOS terminals are available to store managers, salesmen and staff. These users require simple, flexible applications that allow them to access the data they require themselves without the need for either extensive training courses or support from external departments. Under the Microsoft model of computing, all these computers and devices are treated as part of the same corporate network, whether on- or off-line and must be both scaleable and interoperable.

Windows CE, the 32-bit, multi-tasking, multi-threaded operating system platform that enables new categories of non-PC business and consumer devices to communicate with each other, share information with Windows-based PCs, and connect to the Internet, has important implications for retailers looking to deploy low-cost computing devices throughout their businesses. For instance, with the growth of customer access applications in stores such as interactive kiosks, self-scanners or gift registries using hand held computers, low cost operating systems are becoming essential.

Because Windows CE 2.0 is a Microsoft Win32 platform, applications developed for Windows NT can run with little or no modification on the Windows CE operating system. At Chick-Fil-A, a US fast-food restaurant chain, Windows CE-based POS devices are connected via ethernet to a system with the Microsoft Windows NT Server network operating system on the back end, which stores and runs the applications. Windows CE-based applications also include the use of voice recognition, enabling users to build personal productivity tools, keeping their hands free.

Windows CE also enables retailers further to pursue a thin client strategy and is supported by leading solutions providers including ICL Retail Systems, NCR, Telxon and Fujitsu.

Ultimately, Microsoft gives retailers the broadest choice of hardware devices and supports both thick and thin strategies, according to the retailers’ requirements. Microsoft also ensures that retailers can deploy consistent management architectures across their entire infrastructure, so that both client and server tools are the same.

The PC inventory in the store and head office includes:

·         Windows-based EPOS terminals with full PC capability and full colour screens, running different flavours of Windows and providing the required level of security;

·         Windows workstations in the back office for store and stock management, sales and marketing, and for high end users such as merchandisers, marketers and designers running Microsoft Windows family of scaleable, graphical client operating systems including Windows 95 and Windows NT Workstation;

·         Portable PCs for data input as managers move around the aisles;

·         NetPCs and Win Terminal (with Windows NT server) for task-based users running locally or on a local area network, both cabled and wireless;

·         HPC and Windows CE-based devices for mobile users in store and home shopping applications;

·         Windows-based multimedia kiosks for customer-facing applications.


Reducing the total cost of ownership

Microsoft’s Zero Administration Kit

The zero administration kit enables IS managers automatically to manage users, hardware, software and infrastructure.

It is available available from

As IT budgets shrink and businesses become saturated with personal computers, many retailers are in danger of adding cost that is not offset by benefits. Already, various surveys have warned about the huge costs of Total Cost of Ownership (TCO) of managing a distributed environment and, without proper controls, this will get worse as more and more devices are put in the hands of employees in every part of the organisation.

Microsoft and the PC hardware industry are working together to create a comprehensive, open standards-based hardware and software platform that maximises the value of a distributed PC environment, and evolves the PC into the platform positioned to drive the next phase of computing for individuals and corporations, particularly the move to 32-bit computing.

Microsoft uses its own and the Interpose TCO model which analyses both budgeted costs, and more importantly, unbudgeted costs which are often not measured by retailers and include end users supporting themselves. These costs can account for more than 50 per cent of total IT costs and are often outside IS budgets. According to Gartner Group, in its 1997 TCO Model, a well managed Windows NT Workstation environment will give the lowest TCO, lower than a Java-based Network Computer and 35% lower than a loosely-managed PC.

Microsoft’s Zero Administration Kit, available from, enables IS managers automatically to manage users, hardware, software and infrastructure.

These efforts, combined with the forthcoming release of Windows NT, represent innovations in the operating system and the hardware platform that will result in a dramatic reduction in TCO, while maintaining compatibility with existing investments in hardware and software and high network security.

Microsoft Systems Management Server helps reduce support costs by centralising time-consuming desktop administrative tasks in hardware and software inventory, automated software distribution and set-up, remote systems troubleshooting and control, and network application management. Systems Management Server aims to cut network operational costs by centralising common network administrative tasks. Some 60% of LAN costs are taken by the need to monitor and update software and ensure that all those connected to the network are using the same approved software rather than multiple versions created by end users.

Systems Management Server 2.0 is due for launch in November 1998. In the future, centralised administration will be available through Microsoft Management Console, Web-based Enterprise Management, Windows-based terminal support and full support for mobile users.



Windows NT as the standard platform for retailers

Windows NT is becoming the de facto standard for the retail industry.

Most retail software solutions run on Windows NT and most leading solutions vendors are developing solutions on Windows NT.

In addition, SQL Server will become the server of choice from European solutions developers, according to a report from RMDP Ltd.

Launched in 1993, Windows NT has received an incredible acceptance in the retail industry, and major European retail chains are committed to using Windows NT as the platform for their next generation of store systems. This includes some of the biggest names in European food and non-food retailing and embraces many thousands of stores including Casino, GIB, Marks & Spencer, Carrefour, Norauto, Decathlon, Harrods, Somerfield, BhS, Delhaize le Lion, Burton, Metro, Printemps, Exxon, KF and Ahold.

Windows NT is now considered a de facto standard for the store solution. In parallel, the  growing importance of Microsoft SQL server will follow at the same pace. According to 1997 research by retail consultancy, RMDP, SQL Server will dominate the RDBMS over the next two years and it will become the main choice of European solutions developers.

The majority of retail software solutions are now available to run on the Windows NT platform, which is fast becoming the standard platform in the retail marketplace. The same strengths which have attracted retailers have also been recognised by the developer community. Already most of the major  solutions vendors, including, ICL, NCR, Riva, Siemens-Nixdorf TEC, ADS Anker, KAS, Certec, RTC, El Corte Ingles have already developed retail applications to run on Windows NT.

For many years distributed processing systems in retailing have been dominated by UNIX, but the limitation of this domination is not only a lack of choice but the fact that UNIX comes in many flavours and is often hardware-specific, limiting the equipment choice, the number of solutions available, and delaying implementation and upgrade programmes with vendor-specific software.


Building open communications using intranets

The intranet, a defined enterprise network using Internet protocols, is now replacing the email-only model of communication between the retail outlet and head office. intranets can be built using the existing Microsoft BackOffice architecture and enable the rapid exchange of data between any employee with a device connected to the network. In this way, retailers can optimise the business processes in the company providing and provide efficient decision support in areas such as space management, staff training, labour scheduling, margin, stocks and orders.

A large French food chain with more than 340 outlets is using an intranet to run its customer loyalty scheme. Another retailer of electronic equipment uses an intranet to send out promotions and updated product manuals to each store so that staff are able to demonstrate and sell the latest models. Store managers can also hold virtual meetings and communicate strategy for sales and marketing.

Microsoft Internet Information Server (IIS), the only web server integrated into Windows NT Server, is powerful enough for the world's biggest web sites, yet so easy to use that it's possible to create an intranet in minutes. By extending the power of Microsoft BackOffice server products to the Internet, IIS makes it easy to create powerful solutions that improve communications and deliver high-impact web sites.

Benchmark tests show Microsoft Internet Information Server outperforms many other Windows NT–based web servers by a wide margin and even surpasses expensive UNIX systems. This means quick response for web users, which can increase your connection capacity.

Since the beginning of 1998, it has became the third most popular web server solution in the world.

Even the smallest retailers with two or more outlets can build their own intranet, using a PC running Internet Explorer, enabling staff to browse a remote BackOffice application at head office and create an excellent balance between local applications (for instance a spreadsheet for personal productivity) and remote applications.


Microsoft BackOffice - client/server in action

Windows NT Server is the network foundation for BackOffice and the new generation of business applications. Microsoft BackOffice lies between the operating system and applications software and is an integrated suite of server applications specifically designed for client-server applications that can tie them seamlessly to the client - be that a desktop PC, laptop, hand-held device or EPOS terminal - to improve enterprise productivity and streamline business processes.


The business computing infrastructure


Microsoft BackOffice is the integrated server suite for the Internet and intranets. Each application is designed to be tightly integrated with Windows NT Server and to work seamlessly with each other. Designed for the Windows NT Server network operating system, BackOffice applications provide excellent performance, scalability, extensibility, reliability, security, and interoperability. Centralised management tools enable you to monitor and administer users, shared resources, and applications from any administrative console, over the private network or intranet, or via dial-in from a PC. Innovative integrated tools extend BackOffice capabilities even further:


Microsoft BackOffice comprises:

·         Windows NT Server - a multi-purpose network operating system;

·         Microsoft SQL Server - a powerful database management platform, providing Multi-Database Replication, Internet Connector for dynamic interface, OLAP implementation;

·         Microsoft Site server Enterprise Edition a platform : a complete solution for Internet commerce, web publishing, and advanced site management;

·         Microsoft Exchange Server - an integrated messaging and workgrouping server, with a rich intranet/Internet integration;

·         Microsoft SNA Server - providing connectivity for IBM networks;

·         Microsoft System Management Server - a tool for asset management, software distribution and remote monitoring.


The role of the database in the retail environment

Microsoft SQL Server 7.0

Microsoft SQL Server 7.0 is a scaleable, high-performance database management system. It assists retailers to achieve real time access to complex and rich data gathered from the store and Internet point of sale.

Microsoft SQL Server is fast becoming the database platform of choice for leading retail independent software vendors (ISVs). The latest release, Microsoft SQL Server 7.0 is set to become the leading Windows operating system-compatible database, bringing business advantage and improved decision-making to all levels of the organisation through the power of data warehousing, wide range of industry solutions and interoperability with Microsoft Office and other Microsoft products.



Solution Developer choice of RDBMS for retail installations: projected future

Microsoft SQL Server is a scaleable, high-performance database management system that assist retailers to achieve real time access to complex and rich data gathered from the store and Internet point of sale. It is ideally suited to distribute data to end users as well as having the capacity to communicate with central databases at headquarters. Its powerful management tools, which lower cost and, provide easy administration, built-in data replication providing resilience and fast access, and open system architecture giving integration and interoperability provide a superior platform for delivering effective information solutions for organisations of all sizes.

SQL Server 7.0 is a core part of building and deploying scaleable database solutions for electronic commerce, line of business, mobile computing and data warehousing. It supports wide-scale distributed retail sites from POS devices to back-end store systems with ease of management, price/performance advantage over major database competitors and lower total cost of ownership (TCO).

The latest version of Microsoft Excel in Microsoft Office enables the generation of business intelligence from data marts and data warehouses built on Microsoft SQL Server 7.0. And Office 2000 the next version of Microsoft Access will also work transparently with Microsoft SQL Server enabling retailers to create data warehousing, electronic commerce and business applications, and integrate them with the Office desktop applications already used.

Major applications vendors are now developing their products on SQL Server. For instance, Comshare, the leading provider of merchandise planning software has chosen SQL Server as its next strategic development platform. Comshare's performance measurement applications, Comshare DecisionWeb and Comshare Decision are already being developed for Microsoft's upcoming OLAP server, code-named Plato. Plato enables retailers to integrate a series of third party tools to query data within data warehouses and data marts, enabling them to take advantage of the best tools available.

An example of SQL Server’s scalability is shown by TerraServer which has put an entire terabyte on line under SQL Server 7.0 (beta), the biggest public database in the world.


Future intended use of RDBMSs in retail IT solutions by database supplier


Microsoft Site Server Commerce Edition

The expanded role of intranet sites within organisations is driving a need for richer web site services, reliable ways to deploy new content while maintaining site availability, and effective ways to manage and analyse sites.

Microsoft Site Server Commerce Edition is the comprehensive Internet server, optimised for Microsoft Windows NT operating system with Internet Information Server (IIS), that enables businesses to cost-effectively engage and transact with customers and partners online. Site Server Commerce Edition, which includes Microsoft Commerce Server, helps businesses reach and engage customers and partners with the creation of cost-effective commerce sites and applications, targeted online advertising and marketing, and personalised promotion.


Microsoft Commerce Server

Using Microsoft Commerce Server and Microsoft Commercial Internet System (MCIS), retailers can develop and launch Web sites within a matter of days using existing templates. MCIS is a comprehensive set of standards-based, commercial-grade server applications that deliver next generation Internet services for managing and personalising web content, enabling electronic commerce, creating virtual communities of interest with rich communication tools, and managing distributed membership privileges for those communities.

Commerce Server mimics existing retail processes and runs them over the Internet. Development times have been reduced to the extent that the Tesco site was developed in only seven weeks and yet gives customers access to 20,000 products. Cost has also been reduced and Microsoft calculates that its solutions cost a third of their nearest competitor’s. In fact, even the smallest retailer with no IT resources can go on line within months, even weeks.

With Commerce Server, consumers can be presented with sites that make it very easy for them to browse, choose and buy. Customers are identified each time they log in and they are only required to provide their payments details once, which offers both convenience and security. The shopping environment can be made more dynamic and exciting by seamlessly integrating audio, video, text and 3D animation, software that embraces Microsoft OLE object technology.

The systems will also link to existing transactions systems such as order processing, shipping and handling as well as to banks and acquirers where payments are processed.

Commerce Interchange Pipeline (CIP) is a new feature of Commerce Server, enabling businesses of all sizes to exchange information electronically. It enables application-to-application interchange of structured business information using the Internet, email, or third-party EDI Virtual Added Networks (VANs). The CIP enables businesses of all sizes to exchange business data electronically in a secure, reliable, and transacted manner.

As a communications pipeline, CIP gives both users and ISVs new opportunities to extend their IT infrastructure to handle new areas of business. CIP supports legacy investments while enabling low cost entry into Internet and business to business commerce. It also provides integration with LOB and ERP.

With the addition of SimpleEDI, smaller suppliers without the necessary resources or investment, can now take part in EDI communities. Provided with a simple web front end, these suppliers simply fill in web orders and invoices and send them via the Internet to the retailer which will convert them to EDI messages at the back end.


On-line payments boost electronic commerce

With the advent of a variety of solutions for payment on-line, including credit, debit and stored value cards, Microsoft is working with the leading financial institutions on standards that will enable businesses and consumers to get access to funds over the Internet and telephone, store the value on their PCs or smart cards and pay for goods and services either over the Internet or in stores equipped with card reading devices.

So that retailers do not have to invest in multiple terminals in order to process different cards, Microsoft subscribed to the Europay/MasterCard/Visa (EMV) initiative on standards. Microsoft has also partnered with financial software company, Intuit and electronic commerce company, CheckFree to create a single, unified technical specification called Open Financial Exchange to enable financial institutions to exchange financial data over the Internet via popular consumer packages such as Microsoft Money and Intuit Quicken.



Microsoft delivers its technology through 50 certified Microsoft Solutions Providers in each European country. These include specialist applications developers, consultants and systems integrators. Within the retail and distribution sector, virtually all the major applications developers are able to provide solutions using Microsoft technology. These Solutions Providers include both local suppliers and global vendors.

          For instance, to reflect the growing use of technology by consumers, Microsoft and ICL have formed a global alliance to develop a new breed of consumer-focused IT systems, which will help simplify the way people live, work, learn and shop. The new systems will be standardised on the Microsoft enterprise platform, based on Windows NT and includes Internet solutions, development tools, Office desktop applications and the BackOffice family of applications. The goal is to drive down the cost of enterprise computing for customers and reduce both the time and cost of implementing new consumer-focused applications.

In Europe, there are over 300 different solutions that run on the Windows 32-bit operating system. More than 40 of these have now received “Designed for Back Office” certification.

The ‘Designed for Microsoft BackOffice’ logo was developed to help retailers identify hardware and software products that were designed specifically to take advantage of key technologies in the Microsoft BackOffice suite of products. Only products marked with this logo are approved by Microsoft to achieve a standard level of integration with the Microsoft BackOffice platform. Compliance with these requirements is enforced through testing of products at Microsoft’s head offices.


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To keep its customers informed about new and emerging technologies, together with the range of applications available from Solutions Providers, Microsoft publishes Windows in Retail and Ecommerce.


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For further information please contact François Tabard, Retail Industry Manager, Microsoft Europe on