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“To repair or replace, that is the question.” Organizations regularly borrow this line from Shakespeare when their existing POS, barcode or IT hardware becomes faulty.
Previously, some companies automatically replaced defective hardware once the manufacturer’s warranty expires. However it can be difficult to justify this approach in today’s tough trading conditions.
In addition, manufacturers don’t seem to be developing that “killer app” that may propel a company to spend millions of dollars refreshing their infrastructure.
So, what’s a hardware support manager to do if she doesn’t buy new equipment?
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Photo credit: ccdoh1 |
• Consider refurbished equipment – most IT hardware lasts a long time, so look at buying used equipment at considerable savings compared to new.
• Repair existing equipment – develop a relationship with a repair company that can service your hardware. Typically, it costs 50% to 90% less than the price of a new replacement to return existing hardware back to full working order. Be careful about using the manufacturer for non-warranty repairs though, because this type of work is often a major profit center for them and the repair costs can be very high.
Sometimes however, adding new technology is inevitable. The advice here is simple – do not buy the manufacturer's extended warranties. These do not make economic sense, as the manufacturers charge a premium for the cover. Instead, satisfy yourself with the standard warranty and foster a relationship with a reputable vendor who can carry out any repairs that arise once this expires. Cost savings with this approach can easily be demonstrated and it helps to maximize the hardware’s return on investment over many years.
We've circulated the following articles this week, as they make for interesting reading:
Don't trash that CVS receipt.
The first article provides an introduction to how the social media focus at CVS/pharmacy has changed. This was to prompt the 69 million-plus members of its ExtraCare Rewards program to use the scheme further, rather than "MoneyTrashing" the rewards that are printed on their receipts. 1to1media gives us the detail.
Re-fuel at Pappas Bros. Steakhouse. Literally!
There is a novel partnership occurring close to Mercom in nearby Houston between Pappas Bros. Steakhouse and energy provider Reliant. With their headquarters in the city, Pappas is having an electronic charging station installed at its premier Westheimer Road eatery so that patrons can charge their electric cars whilst dining. Hospitality Technology Today provides further details about the arrangement.
CSI Target?
Yes, that's correct. Like us, you may be surprised to learn that the retailer has it's very own forensic services lab. They work to protect the safety of Target guests, team members, communities and families by helping to solve retail crimes committed in their stores. However, they also assist with additional crimes on behalf of law bureaus who need extra resources. And they do this free of charge! Target's own A Bullseye View online magazine explains the department in full.
#4 Pricing
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In looking to help those considering depot repair centers to service and maintain their POS and IT hardware, the fourth part of this series covers the important pricing element of the decision.
The depot repair model can offer excellent value, but still you need to choose a system that suits. Evaluate the different methods available and ask providers to give you repair pricing based on different methods.
Those common in the industry include:
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Photo credit: 401K
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Time and Material (T&M)
This is a method often preferred by the Original Equipment Manufacturers (OEMs). You ship defective equipment to them then they will evaluate it and provide a repair price. Repair pricing can be based on labor rates from $80 to $200+ per hour. They may also charge an evaluation fee if you decide not to proceed with the repair. In addition, the T&M process may not be manageable if you have large volume of repair work.
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Contract Method
With this pricing model, you pay a certain amount per month for each item of hardware that you place under the repair contract. Typical pricing ranges from a few dollars for a barcode scanner to $20 plus per month for premium mobile computers or other expensive IT equipment.
The great advantage to this method is that your total repair costs are known upfront. Anything that goes wrong with the equipment listed in the contract is covered and the equipment will be repaired at no further cost.
However, this method is typically an expensive way of repairing your equipment. When pricing this way, the repair company has to assume the worst in terms of how much equipment will need repairing. Each type of equipment can be judged on the typical number that will come in for repair during any one year, but still the repair company will have to err on the safe side and price the contract so that they don’t lose money.
Another disadvantage to this method is that you must maintain an accurate record (with serial numbers) of the equipment that you want covered, which can be tricky with hardware spread far and wide in the field. Any equipment that you don’t list upfront with the repair company may not be covered.
Again, this contract method may be popular with OEM’s and some third party repair companies as it can be most profitable - for them!
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Flat Rate Repairs
The flat rate repair pricing method is probably the most popular in the industry.
The depot repair company charges a set amount per unit repaired and this includes all parts and labor. The price is set up front and it varies depending on what is being repaired. There is a typical range of between $70 to $100 for some barcode, POS hardware or monitor repairs up to a few hundred dollars for high end label printer repairs.
Typically the price is around 15% to 40% of the cost of buying replacement equipment, so it offers excellent value. Normally these repairs are not covered by a formal contract and you pay only for what you send in to have repaired. If your repair needs change, or if you’re unhappy with the provider, then you can just stop repairs and move elsewhere.
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Store openings have featured again prominently this week, and we've noted two from retailers with their headquarters here in Texas.
Whole Foods Stores
From its Austin HQ, the grocery retailer has announced that it has 69 new stores in development, which was reported in Chain Store Age.
The article says that the expansion strategy will continue to focus on smaller footprints and building in economical neighborhoods.
This announcement coincided with first quarter profit figures showing a rise of 33% to $118.3 million, in part thanks to increased customer visits.
The Container Store
Similarly, the innovative retailer of storage and container products said from its Dallas HQ that it plans to bring their store count up to 59 by the end of 2012 with the addition of 6 new locations. It will be the largest real estate growth year in the company's history.
We read this news first on Retail Facility Business.
Chipotle
Finally away from our base in Denver, the popular food chain has announced a big expansion, as they expect to open up to 165 new locations this year. Chain Store Age shared this news.
Trading since 1993, Chipotle have a total store number in excess of 1000 now in the 'fast casual' sector of the restaurant industry. From the outset, they wished to provide customers with food quality that is similar to full-service restaurants, coupled with the speed and convenience of fast food service.
#3 Experience
Part 3 of this series explores the questions you should ask around the experience of depot repair vendors if you are considering this method to compliment your operation.
How long have they been trading?
Stability is crucial when outsourcing. Vendors with an established history will have traded through many business cycles and this gives a strong clue that they will continue to do so. They will be comfortable when talking in these terms and sharing their business continuity methods.
What skills do the technicians possess?
With experience comes knowledge. An established company will have built up a tremendous amount of technical expertise over the years within its technical department. So ask about this team:
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Find out who the longest serving staff members are.
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Press for an average length of service.
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Learn about the qualifications the technicians possess.
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Understand what internal training is taken.
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Transparent vendors will be accommodating if you wish to speak directly to the members of staff who will be completing the actual repair work on your behalf. You should be striving for a relationship where the links between you, your in-house colleagues and an external repair team is seamless.
Are you knowledgeable about my hardware?
The skills of the technicians should help you answer this question, but do go further. You can ask about model numbers or the type of equipment that is generally present in your particular sector.
However, do not be put off if a vendor is unable to supply precise repair prices because they are not overly familiar with your hardware. Many familiarities exist between the manufacturers, and so repair techniques are similar. For peace of mind, simply send in a sample of devices from your range for repair and see how they come back. Reputable vendors will carry out these trials free of charge and will then supply prices for future work.
What resources are at my disposal?
Along with being able to speak to a vendor’s technicians directly, you can ask about what else they can provide to aid your running. For example, if you are managing an in-house team and seek a vendor for some component-level repairs or for overflow work in times of high demand, ask if they have anything to share. The vendor may publish a tech blog, provide guidance sheets or instructional videos on repairs for example, all of which you could put to use. They could also go a step further and assist with inventory management.
Can you tell me more about your customer base?
Perhaps the most revealing indicator of a vendor’s credentials is the work they are already carrying out. So obtain case studies from them or ask to speak directly to some of their customers. Length of custom is also important here, as you can take a lot from a relationship that extends over many years.
Once again however, do not discount a vendor who is unable to provide an example from your specific field. Repair work that they carry out will be very similar across industry ranges. So again fact-find with a trial. This is specific to both you and your equipment and will allow a vendor to highlight their potential worth.
What is your geographical coverage?
If you are a retailer for example, you will need to determine whether a depot repair center can assist all of your locations. This could number thousands of stores. So ask how the potential vendor handles logistics and how they assist with others who share your profile. In these cases, established depots can quickly explain how they regularly rival the service provided by on-site support vendors at a fraction of the cost.
We are focusing on hardware, grocery and retail store developments from the news this week.
The National Retail Federation's 'SmartBrief' tipped us off about interesting news about Menard's and H-E-B.
The Menard's model has seen some huge store openings at a time when others are contracting. However, they have struck a balance whereby a hometown hardware store atmosphere is retained. This article details the activity in full.
Similarly with a focus on its neighborhoods, H-E-B is planning a large investment into some Austin stores. For example, to meets the needs of its Latino community, one store will be re-modeled with space added for a masa factory to grind corn daily, a tortilleria, a carniceria and a deli with fresh salsa and cremas. You can read this article for the full scope of their plans.
Photo credit: J.C. Penney mediaroom
Big changes are afoot at J.C. Penney with a restructured pricing policy, store layout overhauls and a new logo. The pricing move seems to polarize opinion. We picked up this news from Chain Store Age and Harvard Business Review and you can see the range of comments at the foot of both of the articles.
Continuing our series that highlights how you can select a leading depot repair center, this blog post explores whether there are any additional ways that potential vendors can compliment your operation.
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Further benefits can accrue when, along with repair work, the logistics and inventory management of your hardware is outsourced.
Even if inventory management and logistics are handled in other ways at present, circumstances can quickly change. It could be reassuring to know that your eventual choice of vendor has this capability, in the event that they are needed.
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Photo credit: xavi talleda
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So investigate this area further, as you need additional confidence in your supplier. They may be located hundreds of miles away and so you can not watch over them daily. Make sure the following items are agreed to beforehand:
Ask for regular (at least weekly) reports from your supplier, covering what has been repaired and what their equipment stock is.
What will the depot charge for managing your inventory? Apart from the cost of shipping equipment, the charges should not be very high. This is because many depot repair companies view inventory management as a way to add value to their relationship with customers and strive to keep costs low.
Determine how equipment is sent into the field – how does the vendor know what and where to send equipment? Who is responsible for ensuring that defective equipment is returned to the depot?
How is warranty repair work handled? Again, suppliers may be authorized to carry out repairs on a manufacturer’s behalf. Even if they do not have authorization, they may be able to process the repair at little or no cost as a way to add value to a customer.
If you have yet to subscribe to this blog, sign up today so that you continue to receive our guides on selecting a depot repair center directly. These will be hitting the inboxes of subscribers over the next few weeks.
As a reminder, the first one on quality can be found by clicking here
Here are some of the articles we have read this week from the latest news from our industry -
New store openings:
 Photo credit: danperry.com |
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If, like me, you are keen on golf, then there may be increasing opportunities to compliment your passion with visits to new Golfsmith stores. Again reported in Chain Store Age, the sport retailer is planning 10 new stores and 4 relocations this fiscal year. New premises are planned for Cleveland, Washingston D.C, Chattanooga, Tenn. and Atlanta. All new locations will feature driving ranges or simulators to allow customers to test drive clubs and compliment Golfsmith's free custom-fitting services based on computerized swing analysis systems.
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Others in my household may be more interested to learn that The Disney Store has store opening plans for 2012, including 13 new and remodelled premises for the US, along with its first launch in China. The North American premises will debut Disney's new interactive store format. Again, Chain Store Age told us this news.
New technology:
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Guess are trialling iPads, reports Storefrontbacktalk.com.Twenty-five stores will have them accessible in their departments, and also in dressing rooms. They are being implemented to replicate a kiosk as a tool to display demos, provide fitting guides, locate merchandise, check inventory, host training and access secure CRM functionality.
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At Home Depot, Digital Transactions sent out news this week of an expanding in-store pilot whereby PayPal exists as a payment option. Now in 51 locations, users can either pay with a PayPal card or by entering their mobile phone number plus a PIN. The site also reports that PayPal has created deals with terminal maker Ingenico and POS middleware vendor AJB Software Design to help streamline the payment option.
This is the time of year that companies take a deep breath and start planning for the upcoming year. The economy remains down and budgets are tight, so many people are looking for ways to save money on their hardware repair costs.
Some companies are evaluating their current depot repair contracts, or perhaps considering changing from expensive, on-site repair to a depot model. Others are looking to switch from relying solely on repair by the original equipment manufacturers (OEMs) to more cost effective third parties.
If you have decided on the depot repair approach then there are a number of areas you need potential vendors to qualify so that you can be assured of the highest service.
This blog introduces the first of these:
1. Quality! Quality! Quality!
Depot repairs can be an efficient and inexpensive way of maintaining your hardware, but the quality of the repair work is paramount.
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Ask these 5 questions of potential vendors to help determine their standards:
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References -
Ask potential suppliers for references and contact these directly. Satisfied customers in an industry are regularly happy to talk to their peers. Also ask the supplier for names of lapsed customers – why don’t they do business together anymore? It may not be the fault of the supplier, but lapsed customers can have a story to tell. For example, a lapsed customer may not be using a repair service because they have recently upgraded to new technology. But will they return to their previous repair vendor once warranties expire?
The set-up of the vendor -
Ask about the history of the company, their technical expertise, how many staff they have and whether the appropriate capacity exists to handle your needs. You have to judge whether the company size is right for you. For example, if you have 500 repairs per month, then choosing a repair company with only a handful of technicians may be unwise. Similarly, if you select a supplier with hundreds of technicians then your worth to them may not be high and you may not be valued as a customer.
Peace of mind –
Ask what warranty is provided on the repair work. Once warranties expire on new equipment, some OEMs are notorious for having poor guarantees on their out-of-warranty repairs. Some go as low as 30 days! Ask for six months from a depot repair center – you need a supplier that will stand behind their work.
Determine the cover –
Ask the potential vendor whether their warranty covers just the repaired fault or the complete point of sale unit. Again, some companies will just warranty the specific fix and charge you again if a repaired item develops a different fault. Steer clear of this approach!
On-going support –
Determine how your repair work is handled. Ask what procedures are in place for the logistics and tracking. Also, determine whether the vendor records repeat failures and what alerts they provide to flag trends or developing problems with your equipment. Make sure you can tap into their expertise when managing inventory and determining the need for new equipment.
If you have yet to subscribe to this blog, sign up today so that you receive the second part of our guide on selecting a depot repair center directly. This will be hitting the inboxes of subscribers shortly.
We give close attention to what is going on in the areas that we serve. Here is some points from this week that have stood out:
- Lots of articles have appeared reviewing this year's CES in Las Vegas. The general consensus was that even though one main product or announcement failed to dominate, there was still sufficient content to appeal to the audience. Mashable provided a succinct review and a feature on the 30 most striking images of the show. You can find this by clicking here
- A thought-provoking article in Forbes magazine gained interest in the industry, as it suggested the traditional restaurant menu is under threat from tablet devices. It features a review of one of the systems in operation and the functionality it provides both to customers and the restaurant. You can read the Forbes piece in full by clicking here
- With it being a popular time of year for industry events, the focus shifted on to New York this week for the National Retail Federation's Big Show 2012. Kicking off the event with a keynote speech, former President Bill Clinton talked positively about economic recovery to an audience that has helped to contribute toward record visitor numbers at this year's event. Footfall has in turn led the organizers to forecast growth in the industry. You can read about the numbers by clicking here