Shades Shop Pty Ltd
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Client: Shades Shop Pty Ltd
Industry: Retail - Multi Store
Key Solution: Focus on real time management of POS Multi-Store operation - Turn POS Data Into Intelligence
Key Benefit: Shades Shop's revamped store systems give executives there a crisp view of past, present, and future sales, inventory, and customer data Region: Australia |
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Background - The Environment - SHADES is an Australian luxury accessories retailer specializing in designer sunglasses. Headquartered in Adelaide, they have pursued a course of steady expansion since its founding in 1986 by Dennis Karis and today have 12 shops in 3 States, South Australia, Queensland and Victoria.
Background - The Requirements - Beleaguered by outdated software systems and store hardware and in the midst of the ailing post-Y2K economy, Shades Shop President Dennis Karis felt he couldn't let the circumstances of the day slow him down. The retail sales slump and his outdated systems were doing their best to temper his company's pace, but that only fueled his determination to keep sales and systems moving forward. But like a fast drive on a foggy road, he couldn't see a darn thing until it was too late to react. Sales figures, inventory measures, the bottom line -- it all passed by him in fuzzy blurs. Karis lacked the vision enabled by real-time systems integration and an executive reporting and analysis tool that presents information such a system produces in one Web-based, graphically presented application. "Our old store systems were old and slow, and the information they produced, although accurate, wasn't timely because we were always having polling issues," he says. |
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Because stores were connected via unstable 10-year-old, 9600-baud binary synchronous modems, even the slightest line disruption would cause the polling connection to fail, requiring a complete restart. Polling was so system resource-intensive that it had to be done during off-hours, which meant a dropped connection in the wee hours of the morning would require a restart of the entire process the following evening. Days-old information was therefore the norm. Consequently, Shades Shop sales associates never trusted the information they saw on their computer screens. When associates attempted merchandise lookups, the system might indicate that another store had an item in stock, but a call to that store would prove otherwise. Expensive and frustrating follow-up calls were therefore always warranted, because sales associates had no faith in the data presented by store systems. Karis illustrates the importance of having access to timely data in the high-fashion retail industry in real-dollar terms. "Our inventory includes such things as $1,000 sunglasses. We can't afford to hold quantities of that kind of inventory in every single store. But we can't afford to lose a sale for not having a pair in stock in a store where it's wanted, either," he explains. The importance of ensuring the availability of this very expensive item might be just the beginning of a sale, though. "The $1,000 pair is often one item in a $2,500 purchase. If our customer can't get those sunglasses, she might not buy the $1,500 in other pairs for other family members," he says. Karis is quick to point out, however, that the problems his company encountered with the old software were primarily a result of the manager's hesitance to upgrade, not due to issues with the software itself. "The old DOS systems weren't even being supported anymore. For instance, it was very difficult to get support on a 10-year-old software system," he says. "We reached the end of the road on our store systems in 2000, but we stayed there for another three years because of the difficulty in selecting a new system at the right price." While its problems could mostly be attributed to its reluctance to upgrade systems, Karis says Shades Shop chose not to rebuild its store systems with the majority of software vendors contacted because of the high price of software systems generally geared for a much bigger retail operation. With seven stores, ten registers, and five back office PC, Karis says the excessive power -- and cost -- of a software system designed to run 100+ store chains was cumbersome for a small enterprise. "Most vendor's market price and maintenance plans were quite expensive, and we were a very small client to them. We are a known company, and a good client, but a small client." Karis feels the service he would have received from the vendors would have suffered as a result. "Over the years, we had heard of some poor service experiences that remained fresh in our minds, especially as the system aged. When it came time to upgrade, those experiences prompted us to look elsewhere."
Solution - But looking elsewhere was easier said than done. In high-fashion retail, the combination of seasonal collections, low inventory, high merchandise price points, and an ultra-targeted customer base demands special attributes in store systems. The retailer found its match in Famac's ( Adelaide) ArtsMagna series of store systems software. "ArtsMagna features flexible POS, inventory, and management systems that accommodate a constantly changing, seasonal merchandise mix," says Karis. Specifically, he says its Windows and Internet-based, touch screen POS interface, which runs on standard hardware and touch screen monitor, makes it easy for sales staff to pick up, learn, and accept. "Acceptance is key. If sales operators are not going to accept a system, they are going to resist it," says Karis. "If they resist it, they won't ring sales, and if they won't ring sales, go ahead and shut your doors." While the implementation of ArtsMagna installation was slated for 4 weeks, store-to-store networking issues pushed the actual go-live date back by a few more weeks. As many retailers in the same situation have learned, real-time data is only as valuable as the integrity of the WAN (wide area network) you have in place to deliver it. In Shades Shop's case, not all of its stores had dedicated Web connections, and the company felt that its software investment would fall short of its worth if deployed across a less-than-suitable network. After taking a step back to analyze the situation, the company invested in VPN over a WAN comprising ADSL (digital subscriber line), lines to link its 8 points of connectivity. With the new store systems software package optimized by a high-bandwidth network, Shades Shop gets updated sales, purchase history, and customer data distributed to the entire organization in real time. Karis says this allows his administrative staff to take physical inventory counts more quickly and accurately, for one thing. He also notes that real-time data sharing reduces fraud. "In situations where a retailer has multiple stores in the same city, a lack of real-time data sharing means fraudsters can use applied store credit in multiple stores before the system catches on, because data is not updated and distributed fast enough," he explains. "Because our system distributes information in real time, sales associates know that inventory and customer history data is accurate. They needn't make long-distance verification calls any longer, so we're also saving on telecommunication costs," he says. "The process of confirming the accuracy of data is more efficient because we know we can rely on the integrity of information in the system." Shades also wholesales some of its stock to some retailers in States were they do not have their own shops. Prior to the upgrade, Shades Shop was forced to maintain separate systems for its wholesale and retail divisions. This scenario didn't play into the retailer's plan to increase focus on its own Shades-branded retail stores while still servicing its wholesale partners. In Australia, Shades's sales are 90% retail and 10% wholesale. Not surprisingly, the company made consolidation of these databases a necessary component of the upgrade. "The two separate systems for the retail and wholesale divisions of the company included two inventory databases. We wanted inventory planning and buying, wholesale and retail operations, and CRM [customer relationship management] to run on one system and pull live data from one database," says Karis. Accomplishing this would help the retailer achieve two important objectives -- improving its customer-facing CRM efforts and redefining its executive reporting structure. The new found ability to access fresh information from a central database justified Shades Shop's decision to focus on CRM and reporting improvements. "CRM is about bringing in a sale, then taking care of that customer and knowing her purchase history for however long we choose. That purchase history information -- right down to color and size -- had to be available to our salespeople in the blink of an eye," Karis says. When your customers are routinely spending thousands on the items you sell, they expect your knowledge of their tastes and purchases to be nothing less than intimate and up-to-date. They also expect to get what they want, when they want it. An enterprise-wide, real-time view of data allows Shades Shop sales representatives to locate inventory like the aforementioned $1,000 pair of sunglasses in another store or warehouse and have it delivered to the customer immediately. When it came time to choose which executive reports it would run from the hundreds of standard reports offered by ArtsMagna, Shades Shop used the opportunity to figure out what its true reporting needs were. "While we all knew there would be three or four reports we would definitely want to reproduce, I specifically asked the installation team to avoid choosing the same reports we had been producing with the previous system," explains Karis. "We made the users yell and scream for what they really needed. This helped us determine what was really important. We analyzed the need for each report by answering questions like, 'Is that report important? How do we use it? What do we need in it? How often do we need it?'" After trashing unnecessary reports, improving the standard ones, and adding a few that rose to the top of the requirement list, Shades Shop found that it had eliminated some 70% of the reports it once generated but could not find value in keeping. ArtsMagna's reporting package, dubbed QuickReport, also enables ad hoc reporting, which Karis lauds. "I simply asked for an icon on my desktop that would lead me to an application that would guide the creation of my own reports. While I want and use the standard reports, if there's a special issue, I want fast and accurate point-and-click ad hoc reporting." For instance, he recently took a call from a store manager who claimed her distribution of frames color within a Brand range was way off. Karis was able to run an ad hoc report while on the phone with the manager, which gave him visibility of the perceived problem. The ensuing merchandising advice he was able to give the store manager solved the challenge. ArtsMagna's ability to drill down the reporting at
level and to filter the data by
simply has an answer to all reporting needs!
With totally revamped store systems, an ever-strengthening economy, and some slick, real-time executive reporting tools, Karis and Shades Shop have cut through the fog that clouded their vision a couple of years ago. Result - Dennis Karis, president of Shades Shop ( Adelaide), is concerned about style. But while the products his stores sell may boast flair and frills, Karis draws the line at store systems. When it comes to IT, he puts function before form. He says that's why he chose a "feature-rich, yet no-customization-necessary store systems software package" called ArtsMagna from Famac ( Adelaide). "We started searching for store systems with the attitude that we did not want our unique customized system". If Famac is maintaining several versions of ArtsMagna, every time there's an enhancement, something's likely to get missed. That's why we chose them - they have one basic version of their software." ArtsMagna's modular architecture has hundreds of features that can be turned on or off to suit the retailer's needs, reducing the need for custom development. If an ArtsMagna client wants a customization and the vendor thinks it's worthy of sharing with other retailers, it gets built into the product and becomes an available module to anyone who wants it. As a matter of fact, when Shades Shop decided during the conversion process to keep its old method of sales commission calculation, ArtsMagna created the module and added it to the existing sales commission calculation modules already offered by its portfolio. The modular approach fits the retailer's ever-changing merchandise mix, but it's not the only ArtsMagna feature Karis likes to talk about. The vendor's POS interface or USM (Universal Sales Module) as it is known in ArtsMagna is the feature Karis likes the most. The USM is an amazingly easy an intuitive way to process quickly any type of retail transaction. “In an environment like ours, with lots of temporary and casual staff, having a simple interface for the staff to run sales in efficiently, can make all the difference. The last thing we need is people cueing up at the counters for simple collection of their money. Wether handling a simple sale, a layby or a complex Insurance claim with a part payment coming from a return sale, ArtsMagna’s USM simply shines"! |