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Issue 7: Current Developments - Retail Network

Hughes Network Systems and TK Maxx Demonstrate a Match Made in Heaven Between Retail and Satellite

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At TK Maxx, providing excellent customer service is a core value, but it must be accomplished while driving costs down wherever possible. The satellite network provided by Hughes Network Systems has reduced transaction times for customers to less than 10 seconds, thereby improving the customers' in-store experience.

TK Maxx is part of the TJX group of companies, the world's leading off-price retailer of fashion and homeware. TJX focuses on large-format, value-oriented retailing concepts that provide exciting merchandise at 20-60% below regular department store prices. Established in the United States in 1977, TJX is a Fortune 200 company that has produced record financial performances year after year since its launch.

TK Maxx was established in the United Kingdom in 1994. It is now one of the fastest growing fashion retailers in Europe, specializing in "off-price" designer merchandise such as fashion, homeware and gifts. Over 100 stores are located in the UK and Ireland, attracting customers from all age groups; 22% of its customers are between the ages of 16-24, 54% between 29-49, and 24% over 50 years old. Target customers are chiefly women (79% of the customer base is women), with men of a similar profile providing the secondary audience.

People and service are at the core of the TK Maxx philosophy, which centers on nurturing team spirit and investing in employees, while providing excellent service to customers. Cost effectiveness is key to the low-price concept, and the company endeavors to drive costs down wherever possible. With the strength of their purchasing power, TK Maxx buyers are able to negotiate excellent deals from a huge variety of well-known manufacturers and suppliers worldwide.

Supporting the retailer's commitment to service with speed and reliability. The challenge for such a rapidly expanding company was to support sales and customer service operations with equally fast and cost-effective communications. Hughes Network Systems Europe (HNSE), Hughes Network Systems' operating and sales organization for the European market, was chosen to provide the communication system between the remote stores and head office via a very small aperture terminal (VSAT) satellite network. The satellite network provides TK Maxx with speed and reliability that was unavailable from competing terrestrial systems, and allows fast, flexible installations without the complexities and length of deployment associated with other services.

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Andy Snipper, Store Systems Manager at TK Maxx, has been with the company since its inception in 1994. His role includes managing all communications between the stores and head office. His team is made up of field support, in-house technical support, development, and implementation. Prior to joining TK Maxx, Andy worked at some of Britain's leading retailers.

Systems implemented at those stores were antiquated by today's standards and Snipper is pleased that the VSAT system provided by HNSE provides him with an easy-to-manage, efficient service.

HNSE: One Vendor, Ubiquitous Service, Simplified Administration

The TK Maxx network has been in operation since 1994. TK Maxx periodically checks all the systems every 12-18 months and has looked at the possibility of moving to leased lines or ISDN on a number of occasions.

However, as Snipper explains, "Although we've investigated other technologies, we've always decided to remain with our satellite network from HNSE. We know that as we expand our stores throughout Europe, the satellite footprint is large enough to cover all potential sites. This ensures that we can use just one service provider wherever we are and avoid the complications of multiple vendors across multiple countries. If we used terrestrial lines, we would often be dealing with at least four or five different service providers, making the administration much more complex and chances of failure greater."

Accommodating installation needs to make deployment trouble free. Adds Snipper, "Over the years we have built an excellent relationship with HNSE - they have worked hard to accommodate our needs, particularly when it comes to installation issues." For example, special conditions for planning permission sometimes arise in certain town centers that have buildings protected by an historic preservation designation listing. For one installation in Lincoln, HNSE was asked to paint the wall-mounted satellite dish blue so that it would blend in with the "Lincoln Blue" brickwork! "HNSE is always willing to work with the customer to disguise the dishes when necessary, and so the store now boasts its very own color-coordinated dish."

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The U.S.-based mainframe system polls each of the stores via satellite twice daily to collect up-to-date information about stock inventories and sales transactions.

An online credit card authorization system via the HNSE VSAT system was launched in June 2001, which has significantly reduced the time customers spend waiting at cash registers. Snipper explained, "Transaction times have been reduced from between 20 and 90 seconds down to less than 10 seconds. As 60 percent of our trade is done on debit and credit cards, this obviously has made a vast differequeuing times and therefore to our customers' in-store experience."

Scalable VSAT systems make it easy to add applications support. Following the implementation of online credit card authorization across the network, Andy is now investigating innovative solutions that would centralize some back office operations such as email, human resource functions and other corporate functions via the satellite network. These would be layered onto the current network and more bandwidth would be required.

However, with the satellite service from HNSE, this is not a problem as additional bandwidth can be arranged on demand at any time. In conclusion, Snipper is satisfied with the service provided by HNSE and says that everything that was expected of the service has been provided. HNSE provides a fully serviced network 24 hours a day, 365 days a year, and Snipper finds that the service is excellent. Additionally, the reliability of a VSAT network has freed him up to work on other projects.

"The network is just easier to run and so reliable that we just have a lot less trouble and that means I can spend time working on other projects," said Snipper.

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Over the years, HNSE and TK Maxx have worked as a team to ensure that implementation, programming, and time scales are now at their optimum level, with both companies knowing exactly who has to do what and when. Snipper's advice to anyone thinking of installing a satellite network is very positive.

"For any organization that needs intense, reliable communications that are easy to manage and less susceptible to system outages, VSATs are a very viable and cost-effective option. In fact, low-price retail is based on the same concept as HNSE VSAT networks, selling better and more cheaply while providing an excellent service to customers."

Hughes Network SystemsEurope: HNS' operating and sales organization for the European market. It is headquartered in Rome, Italy with facilities in the United Kingdom, Germany, France, and the Czech Republic. HNSE provides DIRECWAY® broadband satellite services across Europe, utilizing its satellite hub earth stations and network operations centers in Milton Keynes, UK and in Griesheim, Germany. HNSE designs, develops, installs and maintains a wide variety of enterprise network service offerings such as broadband Internet access for ISPs, two-way business television, broadcast video, micro-advertising, as well as interactive distance learning.


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