Chapter 3 Information Systems, Organizations, and Strategy

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I N T E R A C T I V E S E S S I O N : T E C H N O LO GY
7-ELEVEN STORES ASK THE CUSTOMER BY ASKING THE DATA
There is probably a 7-Eleven store in your neighborhood, and it’s a convenient place for picking up a can of Coke or a quick ham-and-cheese sandwich. It’s the largest convenience retailer in the world and the number one convenience store chain in the United States, with 5,300 stores. This company started out about 75 years ago as an ice-dock operator. When refrigerators started replacing iceboxes, the manager of each store asked customers one-by-one what items they’d like to stock in their new appliances. By asking customers directly and stocking only the items customers most wanted, the company grew and prospered. Over time, the company moved away from its roots, losing touch with customers along the way. It had no means of knowing what sold in each store and allowed vendors to decide what to stock on its shelves. Although large vendors, such as Coca-Cola and Frito-Lay, had powerful information systems for analyzing what they sold in individual stores, other vendors didn’t have such systems. Moreover, the vendors’ systems were designed to maximize opportunities for their businesses, not for 7-Eleven. 7-Eleven stores are not all alike. What their customers want depends a great deal on the neighborhood and region of the country where they are located. What sells well in Boston may not work in Texas. Without detailed knowledge of its customer and sales patterns, 7-Eleven was unable to determine which items were selling well, or which items were most profitable to sell in the first place. This made a difference to the company’s bottom line because of missed sales opportunities, lower profits, and excess store inventory, some of which consisted of perishable goods that had a very short shelf