A new data analysis system is updating the restaurant and retail business in British Columbia

It's long been said that the key to success for retailers and restauranteurs is location, location, location. But in British Columbia, a new technology is usurping that truismÕs hold with a snappy four-letter word: ZATA.
Named after the end-of-day zed tape that spits out a business's daily sales data, ZATA is an application that gives small and independent businesses the ability to benchmark their results against competitors in their geographic area. It's designed to provide nearly up-to-the-minute metrics to a sector that has, for the most part, relied on intuition and word of mouth as its primary means of trend-tracking.
"ZATA is an answer to the question How am I doing?" said Brad Brooks, director of ZATA at Vivonet, a Vancouver-based software firm specializing in point-of-sale systems. "If a business sees an increase of five per cent in revenues, how do they know if that's good or bad?"
Vivonet stumbled onto the ZATA idea while working with the BC Restaurant and Foodservices Association (BCRFA) last year. "We were looking at the biggest issue facing restaurants, and that was their ability to get stats on their sector," Brooks said.
While Stats Canada provides business and economic data reports, these can be dated by the time they reach small business owners and aren't specific enough to identify trends affecting individual neighbourhoods. "When you're slow, you wonder why," said Leonard Nakonechny, general manager of C Restaurant in Vancouver. "In the past I would just phone people in the industry to see if they were experiencing the same thing. It wasn't tangible."

Business measures

Enter ZATA. Essentially a series of numbered scores based on averaged data from participating businesses, ZATA provides an at-a-glance indication of performance on a scale of one to 10. "If you can benchmark your business, you can offer better service, better food and a better environment," said Ian Tostenson, president and CEO of the BCRFA. "Businesses need to have a context to their own profitability. You make an investment, but you seldom have time to see what's going on around you."
Restaurants using ZATA submit five major statistics on a weekly basis: sales per square foot, change in sales growth, change in average transaction, labour costs as a percentage of sales, and product costs as a percentage of sales. The data is encrypted and confidential, and used only by Vivonet to normalize the numbers and compute averages. "We break it down into small geographic areas," Brooks said, "with a minimum of 10 participants within a one-kilometre radius."
Users are then given three numbers in return: a sales ZATA, which includes three sales measures; a cost ZATA, which includes two cost measures; and an overall ZATA, which consists of a single number on a scale of one to 10, where five is the average.
When Nakonechny implemented ZATA in June, he was surprised by the results he got for his waterfront seafood restaurant, C. "When we first started on ZATA, our numbers were low, and we're one of the top restaurants in Canada," he said. "I started looking around at our competitors and noticed some key differences. For example, we have never advertised; media attention has always been our approach. And we don't have a marketing calendar. So it made us start to ask a lot of questions."
ZATA not only provides metrics but also offers anecdotal feedback and suggestions based on the results. This feature helped Nakonechny determine two other areas in which he could potentially improve his restaurant's performance. "Turns out we weren't using floor space well enough," he said. "It also mentioned our reservation book, so we're re-examining our reservation management system."

Retail vision

Currently 350 restaurants have signed up to use ZATA in B.C., and retailers will have the opportunity to implement the software when a retail version launches in September. Two hundred retail locations have already signed up. "The one question we hear most often is 'How are things going out there?'" said Mark Startup, president and CEO of Retail BC. "Information of this nature is not revolutionary, but it is hard to get at on a real-time basis."
The retail version of the software contains more categories of comparison, reflecting the complexity of the sector. "There are 35,000 stores in B.C. and each is unique in some way," said Startup, adding that the retail ZATA focuses on key performance indicators such as sales percentage increases, average sales ticket and sales per square foot. "Retailers are motivated to measure product by stock keeping unit (SKU), but there are key performance indicators at the macro level that will allow them to concentrate on both the revenue and cost sides of the equation."
For Misti Mussato, owner of The Toy Jungle, a specialty toy store in West Vancouver's Park Royal Shopping Centre, access to monthly statistics means the ability to react to trends and changes in the industry. "From a small-business perspective, this is the most critical thing for us," she said. "The only info I have had is what I read in the paper about the economy, and that doesn't give me a good way to benchmark."
Using technology to solve business problems is nothing new to Mussato, who has implemented point-of-sale software, a gift card program and a point rewards program, and last year won Canadian Retailer of the Year for her innovative approaches to customer service, store design and community involvement. "Retailers are finding that technology is becoming more and more important, but a lot of small retailers still operate without technology," she said. "We are going to see a shift toward using technology to compete more effectively. Big companies do this all the time, and now we are bringing that power to the independents."
Both the BCRFA and Retail BC are offering ZATA to their members at no extra charge. "This information would probably cost $1,200 a year," said Tostenson, "and they get it as part of their membership benefit."
The BCRFA, for its part, is hoping that eventually half of the 10,000 restaurants in the province will sign on. "We feel so passionately that this information is needed for the betterment of the industry," said Tostenson, who originally hails from the beverage sector. "The wine industry has detailed stats so you know what's selling when," he continued. "It's so much easier to make strategic decisions when you can see the trends."
ZATA's capabilities will also allow the industry associations to mine data for big-picture metrics that affect the whole sector- for example, issues around labour shortages, said Tostenson, adding that the BCRFA intends to release aggregate data in order to be more effective with government lobbying efforts. "We have always tended to be intuitive about what's happening in the industry. Now we can give a state of the nation and know exactly where the growth segments are."
Tostenson said he has already seen the potential to use ZATA results to effect positive change. "A guy got a ZATA score that went down because he didnÕt have a patio and the weather got nice," he said. "We can take action on that result by transferring the knowledge to the City of Vancouver to create new policies that allow businesses to be more effective. Against the backdrop of 2010, there is a desire in the industry to prepare to be its best," he said. "It's all about innovation."
For Mussato, who recently opened a second location, ZATA couldnÕt have come at a better time. "I'm looking for the best info I can get so I can react quickly to changes," she said. "If I see my ZATA score decreasing, I can find out why I'm down. Retailers often don't find that out until it's too late."
She is encouraging small business owners to get involved in the program. "The larger it gets, the more beneficial the information is to everyone,"she said. "It's all about bettering ourselves as B.C. retailers."
    Vivonet's Brooks could not agree more. "We have the potential to change the way people look at their business," he said. "Now business owners can look beyond their four walls at how they are performing in the community and how customers are reacting to small changes."

Web ZATA
BCRFA www.bcrfa.com
C Restaurant www.crestaurant.com
Retail BC www.retailbc.com
The Toy Jungle www.thetoyjungle.ca
ZATA http://myzata.com