June 14, 2005

Auto-Parts Chain Goes Modern, Stays Frugal

By Evan Schuman, Ziff Davis Internet

Larry Buresh, the CIO of the 1,138-store CSK auto-parts chain, said he knew that his current store technology was out-of-date and not especially competitive, but he also knew that the short-term productivity cost—not to mention the actual dollars and time investment—of a major, enterprisewide upgrade was not practical.

Buresh's answer? Replace all of the hardware, but somehow keep all of the software. That's easier said than done when the to-be-replaced POS (point-of-sale) systems are, "12 years going on 50 years old," Buresh said.

"What we recognize is that we have antiquated hardware and software in our stores. And to do a wholesale swap is a monumental task," he said. "So, we developed a strategy that would allow us to upgrade the hardware without changing the software."

That old hardware includes 333-MHz servers "from a mixture of brands and all long past their prime" and "some very old registers and old display stations in the store," with the servers all running MegaBASIC from a defunct company called ProfitPro (bought in late 2000 by Wrenchhead).

CSK Auto Inc. owns and operates retail auto-parts stores in 19 states under the brand names Checker Auto Parts, Schuck's Auto Supply and Kragen Auto Parts.

The first part of the transition was to create a series of touchscreen registers that precisely emulated the old registers, to minimize training and maintain productivity during the transition.

The new POS registers are also intelligent and communicate directly with the back office, Buresh said. The value of the intelligence is in their fault-tolerance. There is one server in the back of every store, capturing all sales and inventory data. "If the servers do go down, the registers can continue operations and can run 24 hours without the server," he said.

The servers talk with corporate using a private VSAT network that crawls at about 19,200 baud. "But with compression routines and spoofing, we're able to make that network work very effectively for us," Buresh said.

Buresh's chain is now using SCO UnixWare, and it will be running SCO and SuSE Linux in tandem. "It positions us so that, at some point in the future, we will be 100 percent Linux," he said, adding that the switchover target is late 2006, early 2007.

The CIO said he has lost faith in SCO's strategy. "We will migrate ourselves out of SCO. Their current business model seems to be one of litigation," Buresh said. "I think it will be very difficult for them to attract a new customer base."

But attracting a new customer base—and solidifying its loyalty within its installed base—is precisely Buresh's plan for the new systems.

For example, CSK has quietly started a free service offering electronic diagnostics. Let's say a consumer is driving, and suddenly a check-engine light comes on. The driver can drive to a CSK location, plug in a reader and download all of the car's trouble codes for free.

CSK is not in the auto-repair business, unlike rivals such as Pep Boys, but it is in the car-parts business for consumers (primarily do-it-yourselfers) and mechanics. One of Buresh's key goals is to become an easier one-stop shop for those customers and, to that end, he turned to multimedia technology and interactive kiosks.

The first thing the kiosks replace are the paper catalogues where customers would look up the car's make and model to identify the precise part number needed. A touchscreen kiosk handles that task, and it's integrated into the store's network.

"The kiosk is talking in real time with the store server, so if a particular item that is normally stocked is out of stock in the store, it will suggest a substitute item or tell the customer to see a sales associate," Buresh said.

That sales associate will have access to a separate system—called the surround-store system—that can look into every other store in the chain and check inventory.

All of the kiosk's programming is done in Flash, and it literally speaks to the customer in either English or Spanish, which Buresh said is a new capability yet to be released to any of the stores. The system is designed to run a wide range of videotapes to customers—ultimately including demonstration videos—but the initial deployment is limited to vendor advertisements.

The chain is also looking into flat-screen LCD monitors that Buresh is having mounted in store ceilings. Those kiosk displays are intended to have more elaborate multimedia segments about two minutes long such as "entertaining loops, interviews with some drivers and some product demonstrations."

The level of demo complexity that can be delivered in two minutes limits the types of auto-equipment installations that can be demonstrated. Changing a car battery could be presented, for example, but not changing a brake, Buresh said.

A significant percentage of CSK's customers are mechanics and hobbyists who might be working on several cars. But CSK has discontinued its manual loyalty card program and doesn't have any immediate plans to reinstate it. "We had one and it didn't generate any loyalty that we could measure," Buresh said. "It's not something that we put high on our radar screen."

CSK does have the ability to identify customers by telephone number, but Buresh said it's typically not worth the customer's time to do that. "Keying in two digits of the year, the make and the model is extremely fast. It actually takes longer to locate it on a list [of recent cars the customer has asked about] than to just type it in," he said.

But CSK is putting a premium on the new, advanced search capabilities of the incoming network. "What we are able to do with the new server and the new disk drives is to go to a greatly expanded parts catalogue, with thumbnail pictures of the products and related items," Buresh said.

"When you come into the stores, you'll find these flatscreen monitors sitting on the counter. Click on alternators in a specific sequence, and you can get additional information as to why this alternator is better than another," he said. "We developed that internally with electronic feeds from every one of our more than 300 vendors. That's more than one million parts."

CSK used to outsource its search function, but it found that the new network will allow its employees to do it themselves. "When we looked at all of these questions about tailoring it to a particular product, we thought we could do a better job at less cost," he said, adding that some of the questions include, "Does it have an air conditioner? What size engine? Does it have an electronic ignition?"

Such an extensive search function "makes for a very intuitive system," but "it does require a lot of horsepower and a lot of disk," Buresh said. CSK purchased much of that hardware from Dell Inc.

When installing multiple kiosks in more than 1,100 stores, even small costs can mushroom, so Buresh was trying to push the new system for any savings he could. Instead of having electricians install additional power outlets, for example, the kiosk displays are running on power provided by the network's Ethernet connection.

The Ethernet's primary role will be to connect with the chain's new WAN, which CSK is still finalizing with some competing vendors.

"It may be a straight DSL connection, with a minimum of 1.6-MBit down and 128 up," Buresh said, adding that the company is also looking at a new, higher-speed satellite from Hughes Network Systems. The satellite approach delivers some speeds that are comparable to DSL, he said, but it doesn't handle interactive communications as well.

But a new network also includes decisions about capabilities that will not be initially pursued. Among the technologies that are getting a pass from Buresh's team will be RFID (radio-frequency identification) and biometric authentication.

"From what we have seen, RFID is not ready for prime time" given the low accuracy of reads, he said. "It's going to have to have a whole lot more popularity before we will go for it."

As for biometric authentication of customers at a POS terminal, "We're capable of having that [with existing Ingenico POS units], but I don't think there's customer acceptance, at least not widespread customer acceptance," Buresh said. Asking for a thumbprint "has a negative customer connotation," he said.

On the employee identification side, Buresh appeared more optimistic and said he wanted the add-on capability "because we don't want to make it difficult to put in if we decide to do it." Current security methods, for example, connect the password database with the time-card system, so that the system can flag management if a particular employee's password is used when that employee isn't on duty.

Buresh is also exploring various RF capabilities with the company's new POS systems, but he wants to be super-cautious "to tighten down any exposure on credit cards. We don't want to be a store where someone sits in the parking lot and sucks up credit card numbers."