News

Better Management

BY Deena Amato-mccoy

It’s no secret: When the Great Recession hit in the fall of 2008, retailers sustained a serious blow in the form of sharply declining consumer demand. Privately held apparel retailer Bob’s Stores was no exception.


“For us, the slowdown had a significant impact on our inventory movement,” said Victor D’Amato, VP planning and analysis, Bob’s Stores, Meriden, Conn., which operates 34 stores in the Northeast.


Prior to the economic downturn, Bob’s had started to embark on an inventory reduction strategy to improve its gross margin. The recession intensified the importance of the project. 


Sales projections for 2009 and beyond were dismal. Plus, the chain was facing a host of uncontrollable factors, including the rising cost of cotton and wholesale partners that were pulling back on orders or canceling them altogether. It became clear that if the chain wanted to continue serving its shoppers, Bob’s needed to transition away from costly advanced orders to more targeted weekly and just-in-time orders — a process that also required the company to rethink the way it was stockpiling inventory.


“A high level of holding stock was costing us working capital and reducing turns,” D’Amato recalled. “To be successful in this new sales environment, we knew we needed to lower on-hand merchandise, and better manage our inventory to match consumer demand. To do so, we needed help from better solutions.”


The retailer was supporting an outdated legacy system that had limited functionality when presenting users with forecasting data. It was not uncommon for the chain to create inventory orders without knowledge of on-hand stock.


“We used Excel spreadsheets to manually calculate our available safety stock, then added our calculations into the system to improve the next order decisions,” D’Amato said.


Bob’s wanted a solution that could account for promotions, seasonality and other events that impact demand. It also had to take into account a large volume of SKUs and store planning combinations.


“The ideal system needed to analyze the product hierarchy and aggregate a sales forecast based on consumer demand and merchandise performance,” D’Amato said. “It also needed to be affordable and provide a return on investment.”


That solution was a cloud-based demand forecasting management system from JustEnough Software, Newport Beach, Calif. Bob’s launched it in 2009, with an initial goal to eliminate the burdens caused by its safety stock. 


As users launch the software-as-a-service application via desktop or laptop, the solution uses pre-established inventory policies, such as existing safety stock levels, service levels and demand, and then generates an inventory forecast around these details. 


Since adding the solution, Bob’s has slashed its holding stock by 16% and reduced its average in-store stock levels by 9%. “Even with the reduced stock, we did not sacrifice sales, turns or gross margin,” D’Amato said.


Based on the solution’s cost-effective configuration, Bob’s expects to see a return on its investment within a year. Since the solution is a secure, Web-based system accessed via a Web browser, the company didn’t need to purchase, install and run software in-house. A SaaS-based solution also eliminates the burden and expense of software maintenance or running a proprietary server infrastructure.


At presstime, the chain was completing the second phase of the technology deployment, which included completely transitioning off of its legacy system and managing its enterprise-wide forecasting and replenishment processes through JustEnough. 


Once it is supporting the entire enterprise, Bob’s plans to apply it to inventory held at the distribution center and remove safety stock from the back room of the store.


“The goal is to reduce our network inventory,” D’Amato said. “We believe carrying a limited supply of inventory will save us capital, and we will still be able to service our shoppers by having more accurate assortments, such as sizes and styles, based on their demand and purchase behavior.”


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R.Advocate says:
Apr-16-2013 05:06 am

It's good that D'amato find a new way how to manage things. Int his way it will be more effective. And it will be more easy to find buyer's. -Casa Sandoval

R.Advocate says:
Apr-16-2013 02:53 am

Its good that D'amato find a new way for a better management. It's amazing to imagine to think he find a way like that. I like D'amato thinks. -[4/14/2013 6:49:35 PM] Raquel Caytuna: Scott Sohr

R.Advocate says:
Apr-16-2013 05:06 am

It's good that D'amato find a new way how to manage things. Int his way it will be more effective. And it will be more easy to find buyer's. -Casa Sandoval

R.Advocate says:
Apr-16-2013 02:53 am

Its good that D'amato find a new way for a better management. It's amazing to imagine to think he find a way like that. I like D'amato thinks. -[4/14/2013 6:49:35 PM] Raquel Caytuna: Scott Sohr

Y.Hendriyanto says:
Jan-28-2013 02:12 am

Bank Mandiri Bank Terbaik di Indonesia have to manage your finances well.

Y.Hendriyanto says:
Jan-28-2013 02:12 am

Bank Mandiri Bank Terbaik di Indonesia have to manage your finances well.

K.Perro says:
Jan-22-2013 03:13 pm

I would like to read more about this because I am really interested in the subject. Thanks! Waiting for updates!

K.Perro says:
Jan-22-2013 03:08 pm

I like how D'Amato thinks. I hope that things will go as you expect. Good luck! Best wishes from Lavrion!

K.Perro says:
Jan-22-2013 03:13 pm

I would like to read more about this because I am really interested in the subject. Thanks! Waiting for updates!

K.Perro says:
Jan-22-2013 03:08 pm

I like how D'Amato thinks. I hope that things will go as you expect. Good luck! Best wishes from Lavrion!

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Loyalty Updated


BY Deena Amato-mccoy

Tired of relying on deep, blanket mass-marketing promotions to attract shoppers, specialty retailer Crabtree & Evelyn is delving into its customer database and using a new customer relationship management strategy to deliver service based on its shoppers’ needs. 


“The recession forced all consumers, even those with money, to seek out deals, and it is no surprise that the retail world became more promotionally driven,” said Tom Woodside, VP marketing and e-commerce, Crabtree & Evelyn, Woodstock, Conn. “We gave away discounts for the last few years. But now it is time to deliver more targeted promotions so we are not giving away margin.”


Previously, the skin-care and home accessories chain had a rudimentary loyalty program that produced a vast amount of data. But lacking methodology, the program didn’t help the company when it came to who and where to target its efforts. The program, called Platinum, rewarded shoppers the first week of the month, regardless of when or how often they visited the store. 


Crabtree & Evelyn’s new loyalty initiative is a tiered approach designed to recognize its best customers and deliver value, according to Woodside. 


“We combine promotions and discounts, but with more of an element of surprise, with more indulgence-based, in-store experiences, such as five-minute massages,” he said.


The key to the program’s success was to use a CRM solution that helps the chain understand shoppers’ purchase behavior, and use data to make decisions that help the chain appropriately service shoppers. Crabtree & Evelyn added a CRM solution from Burlington, Mass.-based 89 Degrees. 


The chain consolidated its marketing databases to get a total view of its customers, a move that gave the chain insight into which channels consumers are shopping in, and the offers to which they respond. Using this information, the chain can segment customer clusters and deliver the proper experiences. >


The CRM solution was rolled out in the fall, and the chain quickly used it to understand shopping patterns and deliver holiday campaigns in November and December. 


“We generated three times the capital we invested in the solution, as well as increased incremental volume,” Woodside said. 


The retailer began transitioning its email database to the solution in January, and by spring the solution supported another campaign. It is currently integrating the solution to the new loyalty program. 


“We are adding a new point-of-sale system that will allow us to trigger promotions based on customer behavior,” Woodside explained. “The new technology will be available by the fourth quarter, and by providing their loyalty card or telephone number, the shopper will instantly be recognized.”

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Product Mix Gives Edge to Learning Express

BY CSA STAFF

When Sharon DiMinico started Learning Express in 1987, she never envisioned it would grow into the largest franchisor of specialty toy stores in the United States. But her emphasis on providing toys that encouraged creativity and learning, coupled with an expert sales staff and a hands-on atmosphere where kids could test out the products and their skills, proved a winning strategy. 
From one store to its current 150 locations, Learning Express has stayed true to DiMinico’s original concept. The company has thrived by differentiating itself from the big-box national chains that dominate the category and compete mainly on price. It has carved out its own niche, setting itself apart with unique toys not found at larger retailers and with services such as a birthday gift registry for kids, free gift-wrapping, free personalization and family events. Strong community roots, fostered by fundraising and other charitable programs, enhance its appeal with local shoppers. 
DiMinico remains at the helm of Learning Express. She spoke with Chain Store Age about the company and its plans for the future. 



What was your retail experience prior to founding Learning Express?

Prior to Learning Express, I owned a ceramic tile, marble and granite installation business that was located in an upscale shopping center. It was a 5,000-sq.-ft. showroom, and it also featured a kitchen shop and bath shop.

How did you come up with the Learning Express concept?

I had two young children and became frustrated with the lack of quality toys and games available in my neighborhood. I thought there was a need in the market that had not been met, so I set out to create the kind of store I wished for as a mother.

When and where did the first store open?

In 1987, I chaired the board of directors at the Groton Community School in Massachusetts. I opened the first Learning Express store to raise revenue for the school without raising tuition. But the first company store openedin Needham, Mass., in 1988. The first franchised Learning Express store opened in 1990 in Andover, Mass.

How is Learning Express different from other toy stores? What is the customer experience like? 

We greet our customers by name at Learning Express and pride ourselves on our product knowledge, which enables us to help customers choose the perfect toy by age, interest or occasion.

Our stores are clean, bright and organized by age for young children and then by interests: Arts & Crafts, Science, Construction, etc. The typical store is buzzing with activity — product demos, play dates and special events — and offers helpful customer services like free gift wrapping, free personalization and our Birthday Box program.

Why did you decide to franchise?
I believe successful retailers are the ones that respond to their local market. Franchising was the perfect way to blend a proven business model with the insight that individual owners can offer.

Are there any corporate-owned stores?
We currently do not have any corporately owned stores, but we have plans to open a flagship location in the near future. It will serve as the training site for all our new owners, and will allow us to test drive new products and marketing programs.

Is there a typical Learning Express franchisee? 

Absolutely not! Our franchisees come to us from all walks of life — everyone from twin sisters in their thirties, one of whom was a commercial pilot, to retired grandfathers. But they all share one very important motivating characteristic: the entrepreneurial spirit.

What about real estate — what type of locations work best for Learning Express? 

Most of our locations are destination stores in freestanding buildings in town centers, or inline at upscale, grocery-anchored shopping centers. This type of real estate works well with the friendly, personal shopping environment we offer.

How does Learning Express position itself and compete against the national discount chains that compete very aggressively on toys, particularly during the holidays?

We have exclusive products that we develop every year with some of our top vendors, and these products are available only at Learning Express. These products, along with our competitive promotions, never fail to drive traffic. Beyond that, it’s our expert advice and our services that set us apart from the big-box stores. Also, there is a growing awareness about the importance and the advantages of shopping locally.

Learning Express opened up pop-up shops during the past two holiday seasons. How did they do, and is that something that will continue? 

In the past two years, our “pop-up” stores have been a hot commodity for landlords seeking to represent the toy category in the fourth quarter, as many retail spaces — particularly in malls — remained partly empty due to the economic downturn.

All of the Learning Express holiday stores are owned and operated by existing franchisees who are approached by a local landlord. These temporary stores are incredibly lucrative, and we are certainly interested in continuing the program, but it is entirely dependent on the economic conditions.

How many stores do you expect to open in 2011?

We opened 14 new locations in 2010, bringing our total store count to 150 — an important milestone in the history of the franchise. We plan to open an additional 15 to 20 stores in the coming year.

In 2010, how did Learning Express stand in average sales per square foot?

They range from $285 to $971 per square foot.

Learning Express prides itself on offering a memorable shopping experience. What other retailers do you think do a good job in this regard?

Nordstrom and The Container Store.

As CEO, what’s your favorite part of the job?

It’s still all about the product for me. I am very active in selecting which products we advertise and which products we order for our new stores.

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