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TECHNOLOGY EDGE (COLUMN): Wired to succeed

“The economy is forcing our customers to be more strategic in how they use technology,” Giuliano notes.

More bad news from the World Wide Web: According to a recent report by the U.S. Commerce Department, online retail sales in the United States slowed substantially in the first three months of 2001. The nearly 20% decline was the first dip in e-commerce sales since the government started keeping track of such activity in fourth quarter 1999.

Such negative reports fuel warranted skepticism about electronic retailing. But even if one day shuts its doors completely, conventional retailers will continue to demand ever-more-competitive technology. That's because retailers recognize the important difference between e-commerce and useful hardware and software. With that in mind, several companies now offer tools and services designed to meet the technology needs of commercial real estate.

Once such venture, Indianapolis-based MerchantWired, is no fly-by-night MerchantWired is backed by some of retail's biggest players, including The Macerich Co.; The Rouse Co.; Simon Property Group; Taubman Centers; Urban Retail Properties; and Westfield America.

Founded on experience

“The idea for MerchantWired was developed while I was with Simon Property Group,” explains MerchantWired President and CEO James Giuliano, III, a 15-year real estate veteran. “I was there for six years, and we talked with retailers everyday. We saw a need and an opportunity to help retailers — especially those specialty retailers that didn't have the resources or technology infrastructure of the big box retailers — to solve key business problems using technology.”

MerchantWired connects retailers to a wired and wireless network that serves the retail industry exclusively. Among other solutions and services, the company helps retailers improve credit card processing, loss prevention, inventory and pricing management, and intra-company communications. The overall goal is to help retailers make more money by boosting their performance.

MerchantWired launched in May 2000. It now has customers representing more than 5,000 stores at different stages of implementation on its network. MerchantWired also has 10 additional retailers that are in pilot programs representing 7,000 more stores to be deployed. Clients include Finish Line, American Eagle Outfitters, Aeropostale and Trans World Entertainment.

Focused on the bottom line

MerchantWired was founded at a time when enthusiasm for technology was at an all-time high. With the recent economic downturn, retailers haven't stopped investing in technology, but they are being a bit more cautious. “The economy is forcing our customers to be more strategic in how they use technology in their businesses,” Giuliano notes. “That works with our business model because we don't try to sell technology for technology's sake … But the economy has also forced us to be even more focused on the customer's bottom line.”

In the past year, MerchantWired has announced several strategic partnerships designed to improve its solutions and services. Already, the company has joined forces with Symbol Technologies, Datavantage, Bank of America, ACI Worldwide, AT&T, and Found, Inc. Guiliano says such partnerships are fundamental to MerchantWired's mission — to stay ahead of technology trends that will benefit customers.

“For example, our partnerships with Bank of America and ACI Worldwide allow us to provide cost-effective payment processing services for retailers,” he explains. “Using the MerchantWired network, retailers can actually process the transaction in two to three seconds versus 30 seconds if they were using traditional dial-up access. This is the difference between making a sale and having unhappy customers.”

MerchantWired's relationships with AT&T and Symbol Technologies allow the company to provide both wired and wireless networks. Likewise, the Datavantage partnership gives MerchantWired customers access to systems that help reduce employee fraud and theft.

“Right now we're focused on continuing to build strategic partnerships and alliances that will deliver value to our customers,” Guiliano notes. Moving forward, the company will likely pursue other growth avenues, including acquisitions. With its deep pockets and promising business model, MerchantWired seems likely to avoid the pitfalls of other tech ventures. In fact, it could eventually play a major role in shaping the direction of retail as a whole — an already familiar situation for MerchantWired's big-name backers.

Developing the ‘wireless mall’

Indianapolis — MerchantWired recently teamed up with Cleveland-based Symbol Technologies, a leader in mobile data transaction systems, to provide wireless solutions to mall retailers across the United States.

Based on Symbol's Spectrum24 wireless local area network, the solution allows mall retailers to remotely access the MerchantWired network to perform traditional retail applications such as real-time price lookup, item ordering and inventory management, credit card processing, and intra-company communications.

The rollout will begin with installations in 10 malls operated by the MerchantWired consortium. The wireless infrastructure will be installed and managed by MerchantWired. It will be built around Symbol's LAN and its suite of retail-focused software, with MerchantWired acting as the exclusive applications service provider.

According to MerchantWired, the solution gives retailers a competitive advantage by improving speed, accuracy, and customer service. And it does so at reduced cost, due to the aggregation of retailers on the MerchantWired network. And time to market is significantly shorter because the applications are hosted on the network, not by the retailer.

“The value of the ‘wireless mall’ is that it cost-effectively extends the MerchantWired network to multiple retailers and allows retailers of all sizes to benefit from the same high levels of productivity and efficiency once reserved for the large-scale general merchandise stores,” says James Giuliano, III, president and CEO of MerchantWired.

Source: MerchantWired

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