For many consumers, preparing for the holidays is a mixture of joy and stress. While the promise of family, gifts and a bountiful meal hangs in the distance, a lot of toil and trouble is needed to reach that end goal. It's no different for retailers. Sales during the holiday season can represent 20% to 40% of a retailer's total annual sales, according to NRF estimates, and a successful holiday can turn around a bad year or make a good year even better. But reaching those sales totals requires a lot of effort in connecting with customers across all channels in order to get them the products they want, when they want them, as conveniently as possible, despite the chaos of the holiday rush.
This special section of Chain Store Age highlights a number of ways retailers are using IT to help make their holiday wishes come true. We examine how off-price department store Stein Mart is overhauling its merchandising and e-commerce systems in ways that better ensure holiday success, review some solutions that can help retailers meet the holiday needs of customers through social media networks, and offer tips for mobile marketing. And with assistance from Forrester analyst Denee Carrington, we investigate how digital gift cards can make holiday shopping easier for customers and more profitable for retailers.
When it launched a wide-ranging IT transformation initiative called Stein Mart Advanced Retail Technology, or SMART, four years ago, 262-store off-price department store retailer Stein Mart was thinking far more broadly than trying to better meet holiday demand. But the retailer has reaped significant holiday-related benefits as a result of the program, which has upgraded merchandising, returns management and POS systems and also laid the foundation for its new e-commerce offering.
"Our legacy merchandising system was very old," said Andrew Black, CIO of Stein Mart. "It was becoming unreliable and posed a risk to the business. And there were a lot of capabilities it didn't have, such as the ability to fully communicate with our supply chain network."
So Stein Mart issued what Black termed an "elaborate" RFP that included factors such as functionality, strategic vendor support and continued investment in the platform. The company ultimately selected the Oracle merchandising platform as the core of the SMART program, which also led to upgrading the retailer's POS solution from Oracle POS version 6 to version 13 and a complete upgrade of all store POS registers, servers, switches, routers, scanners, copiers and printers with hardware from IBM, Xerox, Cisco and HP, as well as the rollout of a managed multiprotocol label switching (MPLS) network from L3.
"We replaced everything except the vending machines and drinking fountains," joked Black.
As part of SMART, Stein Mart also rolled out an Oracle Central Office Database and POS version 13-compliant RMS returns management solution. These changes have all helped Stein Mart do a better job in effectively managing a wide variety of holiday-related issues.
For example, the system upgrades have led to better system availability, especially critical as workloads get heavier during the holiday season. And combined, the centralized database and enhanced returns management capabilities allowed Stein Mart to implement an improved set of business rules to help detect fraudulent returns without frustrating legitimate customers returning gifts.
"Everyone thinks the holiday season ends Dec. 25," said Black. "It actually runs into early January. We profile customer behavior to differentiate between fraudulent and legitimate returns."
The newest piece of Stein Mart's IT transformation puzzle is an integrated e-commerce site the retailer just launched at the end of August, timed to be fully operational for the 2013 holiday season.
"We're the first off-price retailer with an e-commerce presence," commented Black. "We offer a significant online assortment with the majority of our store's merchandise categories represented."
Using a turnkey e-commerce fulfillment system and technology stack from eBay Enterprise (formerly GSI Commerce), Stein Mart will initially offer an integrated site for PC users that allows goods to be shipped to their home and returned to a local store. Black said the retailer is considering expanding its e-commerce functionality in the future to allow activities like shipping items purchased online to the store and mobile shopping. He also said Stein Mart, which currently has a robust Facebook promotional/customer engagement presence, may move toward social commerce in the future as well.
Whatever Stein Mart decides to do in terms of IT transformation, or anything else, the retailer always focuses on serving a customer base it prides itself on staying in close touch with.
"We communicate with our customers," Black stated. "We know our customers pretty well."