David Jones Limited had revenues last year of approximately $A1.45 billion. It has 9000 staff in 26 department stores across Australia, mostly serving the top end of the market. But quality merchandise is not enough - in the competitive world of retailing, with wafer-thin profit margins, an effective information system can make the difference between success and failure.

"Our IT philosophy at David Jones is to use the systems to support the business," says Mr Wain. "In our part of the retail market, customer service is everything. And you can't look after your customers if you don't keep a close eye on what they're buying, and when.

"Then we have to balance that against our inventory. You simply can't keep a lot of stock nowadays. The larger the inventory, the slower the turnover. That eats into profits. So the name of the game is monitoring what we sell so that we can balance customer demand against realistic stock levels. It's a fine line, but in retail it's those who can walk that line the best who win."

An Australian Dynasty
David Jones has been a household name in Australian retailing since 1838, when a Welsh immigrant of that name opened his first retail establishment in the heart of Sydney Town in the flourishing colony of New South Wales. Jones began an Australian dynasty of doctors, businessmen and civil servants, but the family is still best known for the famous string of department stores. For over 150 years, David Jones has been the best-known name in Australian retailing, with its famous slogan "There's no other store like David Jones."

The young Welshman's first store was in "large and commodious premises" at the corner of George and Barrack streets. He promised to sell "not only the best and most exclusive goods", but to carrying "a stock that embraces the everyday wants of mankind at large."

That tradition has been maintained ever since. David Jones is now a public company, its stores renowned for the quality of their window and floor displays and their range of merchandise. David Jones's semiannual sales, between Christmas and New Year and after stocktaking in July, are an Australian institution.

But in today's world history and tradition are not enough. They need to be tempered with a sound dose of solid business acumen. To that end, David Jones's IT systems have been totally revamped in recent years, in a $A43 million upgrade program. The old merchandising system, JOLTS (Jones On-Line Transaction System) was replaced with a new system called JOLTS-2, developed in conjunction with PriceWaterhouse (now PricewaterhouseCoopers).

The company experimented with packaged retail software, but it wasn't up to the job. "We felt we needed a tailored solution," explains Mr Wain. "We felt that if we were serious about using IT for competitive advantage, we needed a system that exactly fit our unique needs."

But the new merchandising system is only half the equation. JOLTS-2 looks after the operational side of the business, but to really extract the maximum benefit from the system, more analytical capability was needed. Enter MAS (Merchandising Analysis System), David Jones's custom-made data warehouse.

Mr Wain says that a data warehouse is an absolute necessity in the retail environment. "We need to be able to analyze buying trends immediately, and down to the smallest detail. We have 60 buyers in our organization, people whose job it is to monitor how we are selling goods, and to ensure that our shelves are stocked with what our customers want.

"We need to be able to tell what color and what size socks are selling fastest in which store, and we need to be able to do trend analysis on the fly. It's no good knowing after the fact that we sold half a million dollars worth of assorted socks last quarter. We need to be able to budget and forecast and analyze by the smallest inventory item, by every sock color and size and style, in every store every week. That is the absolute key to minimizing inventory and reducing storage costs, while still keeping the customers satisfied."

David Jones now has what it believes to be an effective data warehousing systems in Australia. The MAS data warehouse uses software from Oracle, and Compaq (formerly Digital) Alpha 8400 processors, and disk drives from Hitachi Data Systems (HDS).

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