Guess? to Invest Big in New Tech Infrastructure and Data Analytics
Apparel retailer Guess? plans to invest in tech and data analytics capabilities across the company to improve its omnichannel capabilities, inventory management, supply chain distribution, personalized marketing and more this year.
The retailer expects to spend $55-$65 million in CapEx for the year on investments in its technology infrastructure to support long-term growth, as well as to support store openings and key story remodels. While focused on tech infrastructure, this investment is down from $108 million in the prior year.
“I continue to believe that we have a tremendous opportunity to leverage and support our global business more effectively, by reorganizing accountabilities and strengthening our infrastructure, including the use of technology and data analytics in areas such as inventory management, logistics and distribution, sourcing and product development, storage site selection and product pricing,” said CEO Carlos Alberini, noting that the retailer is already evaluating options to invest in process improvement tools in all of this areas.
Guess? is also reassessing its current systems and tools to deliver a seamless omnichannel shopping experience and plans to implement new technology to perfect its capabilities globally, according to Alberini.
“While our e-commerce business in all regions is growing at a faster rate than the other channels, our penetration is still below industry standards,” noted Alberini. “Last year, we did roughly 12% of our direct-to-consumer business online. Best-in-class companies are operating at between 30% and 40% penetration. With the right technology and a perfected omnichannel experience, we don't see issues to significantly improve from where we are.”
Alberini said he sees significant potential for margin expansion through cost reductions and operating efficiencies in the business, including the use of data analytics for inventory management, supply chain distribution and marketing.
“When we talk about data analytics,” Alberini explained, “I talk about, you know, just making sure that we use customer data in the right way to perfect personalized marketing, which is something that we will be working on and we are already doing some testing.”
He noted Guess? still has a lot of work to do on allocation and fulfillment and the retailer is talking to a company it has “used in the past” to optimize how and where Guess? places inventory and how it fulfills.
“We have opportunities in logistics and distribution, frankly this is huge, both in North America and in Europe to use data to do a better job in the way we service the business.
“Right now artificial intelligence and machine learning, it’s like a big thing to be able to do a better job and become more efficient. And we are trying to really partner up with people that have done this very successfully to, you know, just bring those benefits into the company.”
While Guess? currently has planning on allocation tools, Alberini explained new applications will sit on top of the company’s IT infrastructure, making the implementation time significantly shorter.
“So it's not something that we are talking about going and implementing SAP here, it’s more about bringing these applications that sit on top of what we already have,” he noted.
“I think we're not going to see much of this this year, but definitely next year for sure.”