SMB Case Study: Best of Both Worlds

The American dream is alive and well in the furniture marketplace where El Dorado Furniture continues to grow and succeed 39 years after the Capo family arrived in the U.S.

Seven Capo brothers came from Cuba and opened their first furniture store in 1967. Today the company is experiencing healthy annual growth and is opening two new stores in its South Florida region within the next year.

Competition has heated up in the furniture segment where, says CIO Jesus Capo, "Almost everyone is trying to get into our business." By everyone, Capo is referring to companies like retail giant Wal-Mart, big-box retailer Costco and home improvement mega-retailer Home Depot.

To compete successfully, El Dorado focuses on the best of both worlds: emulating the big companies' best practices while providing intimate, family-style service. Along that line El Dorado utilizes up-to-date technology systems to create efficiencies while providing services the larger competitors are not able to offer, such as next-day delivery.


Setting the WMS Example

"We knew that if we could be more efficient we could be more competitive," says Capo, "so we went out and started looking at the best warehouse management systems available." El Dorado chose to avoid going the custom route, as at least one peer had done, since at the time the available systems were not configured to address the unique needs of the furniture business. "We went to a company that already had a product and asked them to modify it for the furniture industry," Capo notes.

Getting the necessary modifications accomplished was a challenge, says Capo, who notes that many WMS companies said they wouldn't, or couldn't, make the necessary adjustments because the furniture industry was too different. El Dorado went with RedPrairie and the necessary modifications were accomplished in approximately one year. But, according to Capo, the system was worth the wait. "Our efficiency went through the roof!"

Today El Dorado hosts visits from other furniture retailers looking to upgrade to a new warehouse management systems. "We have seen retailers with $50 million in sales up to $1 billion," Capo notes. "We get visits about once a month."


Customer Interaction

Building on its strengths, its family-oriented friendly environment, El Dorado recently completed an ERP upgrade from GERS (Escalate Retail) and switched to thin client POS hardware with the new terminals located throughout the showroom floor. Now sales associates are within view of the customers, which is a better customer service scenario. In addition, the thin client terminals offer design and decorating services and a means for sales associates to record customer information.

"Our sales associates now enter information into the database as soon as a customer leaves the store and that information goes out to the buyers and senior management that same day," says Capo. "Ninety percent of our buying decisions are now made using that information."

Maintaining close contact with customers is essential to the El Dorado culture, says Capo. "We try to make sure every customer that walks in the door is greeted by a sales- person," he says.


Creating Efficiency

As part of its focus on improved customer service and efficiency, El Dorado has implemented GPS tracking with its delivery drivers. The retailer is using Blackberrys with Nextel services and software from Routeview. "Part of our requirements for our drivers is that they must report back to the distribution center after every stop so we can update our system," explains Capo. "This used to require phone calls and staff to receive those calls. Using the GPS system, we know where the drivers are, can give the customer a more precise delivery window and we receive all status updates electronically."

Another way El Dorado is improving business efficiency is through a new time and attendance system that uses fingerprint identification. "With new software from Kronos, every store can act as its own human resources department because the system permits them to individually track their vacations, overtime hours and schedules," Capo explains. "These were services that used to require calls to the human resources department. Now we are able to better control costs and the employees get a much faster response to questions."

El Dorado may have been one of the only retailers in South Florida to have efficiencies in place that allowed them to be up and running two days after the Katrina and Wilma hurricanes hit in 2005. "We were the only furniture retailer with our own generator to power our DC," says Capo. "Our trucks were the only ones doing deliveries two days after the hurricanes while most other retailers could not begin until two weeks after."