Customer service is decidedly back in vogue. With an economic recovery from the downtrodden last few years under way, many executives at retail companies are building customer-facing applications and improving supply-chain underpinnings with the hope they can deliver better service that lures customers back to the stores. Yet, they're doing it with a close eye to the potential returns.

At Saks Inc., known for catering to the fashion conscious through its Saks Fifth Avenue department stores and specialty chain Club Libby Lu, a new POS system is pointedly called point of service--not point of sale. The three-year project, completed in late August at nearly 400 Saks stores, enables a customer to begin a sale in one department, stop and decide to go back for more merchandise, and finish the sale at another register in the store. A clerk who stops midsale saves the information in the register to an on-site server, where sales data is centralized and held in the store. When the transaction is complete, the data is transmitted to a mainframe.

Retailers plan for a more than 27% increase in IT-related capital spending this year, led by a 57% jump in in-store technology investments, according to a study by AMR Research that included 27 companies with an average of $6.8 billion in annual sales. The spending isn't only for replacing mainstream point-of-sale systems, but also for new wireless infrastructures, interactive customer-marketing technology, and sales tools. "Retailers are using IT customer-facing applications to differentiate their business and raise customer-service levels," AMR analyst Robert Garf says.

Saks' system runs on software from Cornell-Mayo Associates called Opus Millennium Store System. New features include the ability for a sales clerk at the register to look up and place orders at other Saks locations. Cornell-Mayo also wants to sell retailers a portable checkout system that includes wireless credit-card authorization. "When the store is busy, you can have someone pull charge customers off to the side to check them out faster," says Barb DeYoung, VP of systems assurance and security at Saks.

Saks' POS system also supports customer-relationship-management initiatives to target customers for special gifts and reward loyalty, and it cuts up to eight seconds off the time it takes to complete a simple cash, check, or charge transaction.

Burlington Coat Factory Warehouse Corp. plans to start installing kiosks for gift registries, beginning with a baby registry. If those work, the long-term strategy is to install kiosks that let customers serve themselves: buying or checking the balance on gift cards, surfing the Web for information, or creating special orders that combine store purchases with catalog merchandise for home delivery, since the merchandise offered on the Web, through catalogs, and in stores often differs. The baby-registry kiosks are being tested in a Braintree, Mass., store.

	Burlington Coat Factory is trying gift-registry kiosks and plans to move to Linux, VP Brad Friedman says.

"In today's environment, it's no longer good enough to have the lowest prices in town," says Brad Friedman, VP of IT at Burlington Coat Factory. Friedman also is migrating stores from Unix operating systems, with the intention of becoming a full Linux shop within a year.

The kiosks and a newly revamped point-of-sale application that includes debit terminals will run on Linux, transmitting data through a frame relay connection that ties back to nearly 50 Oracle databases at corporate headquarters in Burlington, N.J. To cut costs, Burlington runs its internal voice communications over the data network, saving more than $1 million a year on long-distance costs.

Enhancing the shopping experience isn't solely for clothing merchants. Gristedes Foods Inc., a Red Apple Group company, launched XpressGrocer.com, an online order-and-delivery service for customers in Manhattan, at the end of last year to augment its 52 supermarkets, which include eight pharmacies. It has about 8,000 customers in the city, and earlier this month the company went live with nationwide deliveries through Amazon.com Inc., says Donald Winant, CIO at Red Apple Group.

Gristedes offers 40,000 products, including gourmet, kosher, organic, and other hard-to-find items typically available only in the New York metropolitan area. Product pictures with detailed nutritional information are available. Customers order via E-mail, and the orders are queued into a central order database, checked against inventory levels, and transmitted to wireless scanning devices for picking up on the floor. Once picked, the items are conveyed to the packing stations where they're rescanned and placed into shipping boxes, a process that generates tracking numbers and E-mail notifications to customers. Nonperishable items typically will ship regular ground, while ice cream, seafood, and meats will be delivered overnight, packed in a cooler with dry ice or frozen gel packs.