Abercrombie & Fitch understands that the key to international branding is to deliver a consistent store experience across the globe.
By adopting an open operating platform and integrated point-of-sale infrastructure, the company is able to centrally manage all business operations, including supply chain, inventory management and POS processing, across international borders. The retailer’s international stores now garner close to $1 billion in sales.
“International stores are much more profitable than U.S.-based stores due to several reasons, including that they are much less promotional and their price-point strategy is a little different in those stores,” said Jon Rudy, the retailer’s VP merchandising systems, during a presentation at Oracle’s Retail Cross Talk 2012 conference.
A&F launched its international strategy in Canada and the U.K. in 2006 and 2007, respectively, using its existing legacy systems to support the expansion. The platform lacked visibility into financial impacts, especially those related to merchandising. For example, all planners managed financials in spreadsheets, a manual process that made it impossible to determine if they were over- or under-buying.
“[The process] took a toll on merchandise allocation because we used to plan floor space based on their orders,” said Raj Lakshmaihgari, director of merchandising systems, Abercrombie & Fitch. “If there were shipping delays, we had to change floor sets. Then we began to overbuy to stay stocked. The challenge here was that all merchandise was shipped to our Columbus, Ohio-based distribution center, and it sat there until it was needed.”
Since this practice tied up capital and also made it difficult to efficiently replenish stock overseas, it quickly became clear that these systems and processes couldn’t sustain future international growth.
In 2009, the retailer selected the Oracle Retail Merchandising system, which resides in the company’s Columbus-based corporate data center. Since adding the platform, A&