Kmart to spend $270 million on new technology for its stores

Kmart Corp. today announced plans to spend $270 million to install new point-of-sale terminals and mobile computing technology in its retail stores as part of a two-year IT overhaul effort the company detailed last summer.

The rollout of Kmart's new technology infrastructure is beginning with a $200 million purchase of Internet-enabled cash registers from IBM and a $70 million installation of handheld computers and wireless LAN devices made by Symbol Technologies Inc. in Holtsville, N.Y.

The deals with IBM and Symbol Technologies are included under the $670 million IT investment Troy, Mich.-based Kmart outlined last July. Kmart, the No. 2 U.S. retailer behind Wal-Mart Stores Inc., said at the time that it would spend $460 million on new technology for its stores, plus another $210 million on improvements to its distribution and logistics network (see story).

All of the planned IT changes are being done as part of a two-year program designed to modernize Kmart's 2,100 stores, said company spokeswoman Mary Lorencz. The deals announced today are intended to help Kmart "improve our customer service with faster checkout technologies," she added.

Kmart also has been overhauling its IT management. Last September, the retailer hired Randy Allen as its fourth CIO in the last five years and gave her an expanded role as executive vice president of corporate strategic planning (see story). And late last year, Kmart brought in another executive from outside the company to be its chief technology and e-business officer, reporting to Allen (see story).

The back-end IT system at Kmart includes more than 8,000 of IBM's Netfinity servers, which run all the technology and applications for the company's stores. Under the deal announced today, Kmart is buying IBM's SurePOS 700 point-of-sale systems. The terminals are already in place in some high-volume stores and will be fully rolled out by next year, the retailer said.

Each of the cash registers will be equipped with a flatbed bioptic scanner made by NCR Corp. and a handheld barcode scanner from Symbol Technologies. In addition, Kmart said it's purchasing Symbol's PDT 6840 handheld computers for use in running price checks and in back-end applications such as receiving, inventory management and label printing.

Employees in the company's stores will also use the handheld devices to communicate with each other, Kmart said. The handhelds are being linked together via Symbol's Spectrum24 wireless LAN.

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