From Pricing to mPOS, True Religion, Under Armour and Love Culture Reveal Retail Insights

6/19/2014
It’s hard to conceive in this day and age of whiz-bang technology and highly publicized next-gen retail aspirations that a full 78 percent of retailers lack the systems and infrastructure to support multichannel orders, according to CapGemini research shared at Epicor Software’s Insights conference in Las Vegas. 

What’s more, most merchants (79 percent) say they’ll have mobile POS deployed by 2016 but a paltry 6 percent are up and running with it now. There’s good reason to be optimistic about that 79 percent, though, with mobile commerce posting 31 percent growth year over year. And frankly, the almighty customer isn’t going to be terribly interested in queueing up to pay for one quick item. Expectations, as always, are the biggest change drivers.

Some retailers are making significant strides right now with their technology implementations, meeting customer needs with mobility, improving operations behind the scenes, and leveraging the cloud’s many benefits. True Religion, Love Culture and Under Armour give an inside look at their wins — and lessons learned along the way.

True Religion aims high with cloud computing, journeys to omnichannel
It’s no secret that many brands and retailers that are starting out and expanding rapidly opt for cloud-based solutions, and premium, American-manufactured denim, $500-million brand True Religion is no exception. Based in the greater Los Angeles area, True Religion skipped out on owning many of its hardware IT assets (eg, no data center), appreciating that Epicor’s cloud platform comes with security and PCI compliance baked right in.

Eric Rufatt, True Religion’s director of retail systems and IT, says one perennial corporate challenges is maintaining uptime while reducing staff and Epicor’s cloud platform is an essential part of keeping capital costs low. Because the cloud is easily scalable, the brand doesn’t need new funding to launch new stores, so there are “no surprises with costs,” he says.

Beyond bypassing owned hardware and trimming CapEx, “pooling brainpower” is one of the many upsides of going with a cloud platform, according to Rufatt. “There’s no fingerpointing when problems arise,” he says, because one person at Epicor manages all troubleshooting issues from A to Z. The vendor also shoulders the burden of keeping up with malware updates and other nitty-gritty details.

As with many retailers, True Religion was pulled into the omnichannel journey but consumers who pushed the company in that direction. Revenue coming through smartphones climbed 112 percent and table commerce jumped 86 percent in 2012, with both contributing 21 percent of total revenue in 2013, according to Muthu Balu, the brand’s director of enterprise applications.

Last year True Religion implemented the first phase of its omnichannel integration plan — enabling e-commerce orders to fulfilled from multiple warehouses and stores — a project that took less than six weeks. Now Balu’s team is focused on phase two, rolling out Epicor Retail 6.4 and Enterprise Selling 2.9 and identifying areas where there’s the greatest opportunity to benefit the business.

To ensure the deployment stays on track, True Religion defined a timeline of milestones to be accomplished at three, six and nine months; involved all business partners and stakeholders, from retail operations and e-commerce to DC operations and merchandising; and laid out origination and fulfillment scenarios. Balu is still trying to resolve some of the issues popping up along the way. “If you ship from store, how do you manage replenishment of that product?” he says.

Defining the business process is an essential step of a successful omnichannel strategy, according to Balu. For example, True Religion has to decide from which stores it will fulfill online orders, either full line, outlets, or both. Does it make sense to fulfill from the flagship, which should always be fully stocked as it serves as the most visible representation of the brand? What’s more, the brand is thinking carefully about product selection and which styles and product categories should be eligible for ship-from-store in order maintain adequate levels of safety stock.

When it comes to fulfillment logistics, retailers must establish SLAs to be sure that current partners know what the expectations are, Balu notes, such as operational hours and meeting requirements for shipping deadlines. Once that is in place, identify any accompanying support requirements, such as options for customer service and laying out the path for issue escalation — because few things are as maddening to shoppers as being bounced endlessly back and forth from CSR to underinformed CSR. 

Love Culture and the art of pricing
Teen-targeting fast fashion retailer Love Culture signed on with the Epicor Retail SaaS solution in 2012 and has had great success in tightening up operations. For one, the L.A.-area brand discovered it was buying the same exact product from multiple vendors — resulting in varying costs for identical products. Now the buying team applies a formula across the board and has been able to increase IMUs because some products previously were underpriced. “We found items where we didn’t need to go so low, so our initial markup went up,” says Katrina Basic, CFO.

Love Culture also runs a lot of BOGO deals which “kill the margin” but resonate extraordinarily well with customers — better even than offering 50 percent off, which sometimes would work out better dollar-wise for the shopper, Basic notes. Like other retailers, the brand is concerned about what its competitors are up to, seeing as the Love Culture customer shops everywhere. “Everyone is looking for unique product,” she says. Finding that product involves filling the gap left by items such as leggings, which were a huge seller in 2013 but now are on the decline.

Expansion opportunities await in areas such as Saudi Arabia, which are “very hungry” for international brands. The competition is significantly lower in the Middle East than in hot markets such as Europe, notes Basic.

Under Armour mobilizes the store
Performance apparel giant Under Armour piloted Epicor’s Mobile Store version 6.2 in 2012, initially rolling out 50 mobile devices in 25 stores (two per store) and expanding to 300 handhelds throughout all stores in 2013. Though the company is working with a mix of iPod touches, iPads and iPad minis, the latter offers the most versatile, multi-purpose form factor, according to director of retail IT and operations Brian Quill, who stresses that the implementation was “not just about line-busting.” In fact, Under Armour staff most frequently use the devices for price checks and inventory auditing, he says.

To some degree, Under Armour leaves it up to each store to determine how the Mobile Store best fits its needs. While 98 percent of stores leveraged mPOS to manage customer demand on Black Friday — and one store even pulled in 45 percent of all of that day’s transactions via mobile — some stores only turn to their iPad minis during times such as spring break.

The company also noticed that associates equipped with iPads and iPods rang up more units per transaction and higher dollar amounts. “The theory,” says Quill, “is that the associates that used the mobile devices were better associates in general, which is why they sold more.”

In addition to using untethered mobile POS devices, Under Armour also is piloting POS on a Toshiba Flight Windows 8.1 tablet, which offers “serious horsepower,” frees up POS space (four to eight Flights can fit in the space occupied by three to six cash registers) and leaves more room for additional product displays, Quill notes.

Though everyone loves using the iPods and iPads, Quill expressed reservations about going all in with Apple. “They’re giving Under Armour more access to enterprise-style support but is Apple really becoming more enterprise-friendly?” he says. For example, in the current state of affairs each store is required to have a separate iTunes account, creating a bit of a management headache for IT. 

Windows 8.1 lets associates view real-time store sales on the first screen of the mobile store software instead of digging through multiple screens. This ease of use makes the Toshiba Flight-based “store in a box” an attractive onsite-offsite selling tool for tradeshows, marketing events and campus sales, adds Quill.

Mobile POS certainly is on track to be table stakes for the future of retailing but there’s still work to be done in setting consumer expectations. Respondents to a Marks & Spencer customer survey said they tended to avoid store associates who were holding iPods because they assumed they were the employees’ personal devices. That’s one of the many reasons why the iPad mini hits a sweet spot: it “looks like a corporate device,” Quill says.
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