Retailers achieve a consistent view of the customer
Multi-channel shoppers are currently a major focus in retailing, however there are numerous opportunities that are only beginning to be explored. According to Forrester Research's "Multichannel Retailing Best Practices Report," 65 percent of consumers have researched a product online and purchased the product offline and 47 percent of cross-channel shoppers purchased additional products while shopping in the offline store.
"Retailers must create a consistent cross-channel experience to stay competitive," says Carrie Johnson, principal analyst for Forrester. "Investments in integration and the ability to layer on portal and BI tools for visibility will enable retailers to kick-start other next-generation applications like merchandise and supply chain optimization."
Because of high demand for its products, Bliss has grown from a single spa in Soho, New York, to a rapidly expanding series of spas, a heavily-trafficked Web site, monthly catalog drops and expansion to the shelves of small boutiques and upscale department stores around the world through its Blisstribution' channel. The retailer also is opening retail-only locations in Beverly Hills and later in Atlanta.
Bliss was bought by Starwood Hotels last April and is poised for substantial growth, with a plan to open spas in W Hotel locations, first across the U.S. and then internationally. As the enterprise grows, a new mindset is evolving and the retailer is realizing the importance of integrating technology and channels. Until recently, marketing and technology were segregated.
"There was no integration at all from spa to store to catalog," says Casey Craig, IT director for Blissworld, Bliss' parent company. "Any analysis was done on the customer shopping in a single channel."
The retailer required improved communication and integration to capitalize on the Bliss customer. In order to open the lines of communication across channels and support its fast-growing business, the retailer selected CommercialWare's enterprise solution to ensure that customer satisfaction is maintained, even as its expansion adds complexity and data to the company's operational systems.
"Our customers do not only shop in one channel," says Craig. "We have to provide the product to them in whatever channel they want to purchase it."
Bliss is deploying CommercialWare's CWDirect, CWIntegrate, CWAnalytics, CWStore and CWData software. The combined suite of solutions allows Bliss to manage the entire retail transaction lifecycle from order capture, to inventory management, fulfillment and customer service ensuring that customers experience optimal service while traversing all of its sales channels.
The data and analytics solutions convert transaction data into strategic business intelligence, providing Bliss' managers with visibility into the trends and information needed to make effective strategic business decisions. In addition, the solution will scale to support continuing growth.
"It's critical that we maintain the satisfaction of our customers as we rapidly expand Bliss' product development, spa and sales divisions," says Craig. "Our supporting technology must operate in real-time and share customer information across all channels so that we have immediate access to an accurate picture of our customers, their orders and inventory availability and can react to this information accordingly."
Managing Multi-Channel SKUs
Another fast-growing specialty retailer, Lamps Plus, serves more than five million customers per year in nearly 50 lighting superstores, a recently re-designed Web site and a recently launched catalog. Among its channels, the retailer manages 7,000 stocking skus and 65,000 non-stocking or direct-to-consumer skus.
"The main growth area for us is the Internet," says Bill Gratke, director of planning and supply chain management for Lamps Plus. "It allows us to drive sales events and helps us promote the services we offer. The channel also allows us to reach out to all 50 states, which brings a new level of complexity to our operation."
Lamps Plus' Internet channel has grown from $5,000 in sales in 2000 to $13 million in sales in 2003. In 2003, the retailer also launched Builders and Designers online and began working with Amazon to sell its products. In 2004, it achieved a 100 percent increase in sales and added kiosks to stores.
"Associates use the device as a sales tool, which helps them understand what they're selling, how much they've sold and whether they're meeting goals," says Gratke. Associates also use the kiosks for On Hand, an enterprise-wide system that allows associates to check other stores when an item in out of stock. If all stores are out of the item, the employee can look at the central warehouse and have the product shipped directly to the customer.
"Our main goal is to grow each of the channels without cannibalizing from one channel to another," says Gratke. "Successfully growing all three channels will ultimately increase sales for the company."
Lamps Plus also had to improve order fulfillment efficiency in order to keep up with growth. The retailer was completely manual on all processes and launched domestic EDI in 2003, Internet shipping functions in 2004 and automated the pick, pack process. In the first quarter of 2004, Lamps Plus launched a warehouse shipping management solution for Internet shipments and redesigned its multi-channel shipping area.
In order to execute cost-effective shipping models, Lamps Plus moved from UPS Worldship to UPS Internet-based shipping. Using GERS' order management and fulfillment solution, the retailer can allow for multiple shipping options including USPS for oversized items.
By replacing manual processes with EDI, Lamps Plus has increased visibility to Internet orders, enabling it to update customers on order status and to bill customers upon direct ship from the vendor. Top line and bottom line gains so far include reduction in cartons by 30 percent and shipping in 24 to 48 hours. Lamps Plus has been able to add new vendors, expanding merchandise assortments. The retailer achieved ROI in 90 days from implementation and sales are continuing to rise exponentially.
Looking to the future, the retailer plans on replacing its POS system in the second quarter 2005 in an effort to improve CRM and returns processing. The company plans to integrate returns management into all three channels with GERS/Escalate. In five years the company hopes to have moved from a fully manual operation to a fully automated operation with one central data warehouse. "In order to really reach our customer," says Gratke, "we must centralize our data."
Supply Chain Automation
Longo Brothers Fruit Markets, a supermarket retailer operating 14 locations in the greater Toronto market, also turned to multi-channel management technology to support growth. Longo's was founded nearly 50 years ago as a single fruit and produce market. In addition to its traditional grocery stores, the retailer
also operates an online channel, enhanced by its recent acquisition of the online grocer, grocerygateway.com. Longo's has designated six of its stores
to fulfill orders from the Web site.
The grocer needed to migrate to a more robust, stable system to support the company moving forward. Longo's looked for a technology solution
based on hardware compatibility, implementation methodologies and cultural fit."As a retailer with a distribution center, we required software that addressed our specific needs," says John Charleson, director of IT for Longo Brothers Fruit Markets.
Initially focusing on inventory accuracy, Longo's is committed to streamlining the supply chain process through automation. Accurate perpetual inventory is the priority. As part of maximizing the supply chain process, Longo's is deploying Tomax Retail Resource Planning to provide the entire organization with visibility of planned inventory by site, a full year into the future. In addition to inventory, the initial phase will include pricing and promotions management, label printing, DSD receiving and full deployment of Tomax RF applications.
"We chose the solution because of its flexible architecture and deep integration of functions across the enterprise," says Charleson. "We're committed to developing a simplified IT strategy based on single-instance, real-time access to information."
Although still in the process of rolling out the technology, criteria for the new system's success will be consistent fill rates along with improved product management based on data. "Supply chain visibility will drive grocer inventory levels and will improve data integrity," says Charleson. "We have very distributed data right now."
Moving towards centralized data will help Longo's improve the gathering and management of customer information, enabling the retailer to eliminate its online grocery database altogether.