The Sentiment Store

In 1995, Davison's first year as CEO, he set up Paramount's initial company-run discount store as a laboratory for testing new designs and strategies.

By 2001, CardSmart was a business in its own right, with Petter Etholm, a former chief operating officer of the NutriSystem diet franchise, as its president. Last year, Paramount also hired as chief information officer Bruce Conforto, a former CIO of Bradlees Stores (a defunct New England retailer), to improve the technical infrastructure supporting CardSmart and other retailers. By the end of this year, Paramount expects to have about 220 CardSmart stores, with all but eight owned by franchisees.

Through the doors of the Johnston CardSmart, shoppers find a wide variety of freshly produced cards. In August, the Paramount card line located in the prime spot at the front of the store was Frisky Business, which features goofy animal pictures on "to the pet" and "from the pet" cards. A basset hound wearing Groucho glasses wishes a "Happy Birthday ... from someone who's crazy about you!" Other cards fill the full range of sentiments from mushy to romantic, goofy to sarcastic.

With more than 4,000 designs in circulation, keeping the right cards in stock is still a challenge. When the racks get picked over, shoppers are likely to walk away frustrated.

To keep that from happening, Paramount has driven up the availability of cards ordered from the warehouse. The availability rate had been in the low 90s a few years ago, and anything below 95% creates big gaps on the retail racks, Davison says. Through a program of continuous improvement, including both technological and management changes, Paramount has pushed the availability rate to over 99% and held it there for the past four years.

For its own CardSmart stores, Paramount uses a point-of-sale system called The Assistant Manager (TAM) from Lode Data Systems. After trying and discarding a couple of better-known retail systems, Paramount found TAM a better match for its franchise model because it is affordable for franchisees and allows those who run multiple stores to do their own consolidated sales analysis, according to Conforto. Paramount also found that the system's software architecture, based on Microsoft standards, made it relatively easy to customize to support Paramount's replenishment requirements.

Most of Paramount's replenishment, inventory and manufacturing software has been custom-developed by Choquette's team of developers, either working with Microsoft tools like Visual Basic and FoxPro or writing programs for the IBM iSeries (also known as AS/400) platform. By taking advantage of the iSeries version of IBM's WebSphere application server, the team now creates Web pages for running their order entry systems. That allows Paramount's Toronto operation to tap into the same order and inventory database used at the Pawtucket headquarters, over the Internet. The goal is to allow retailers to enter orders and track deliveries themselves on a Web browser, Choquette says.