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Bridging Strategies for Wholesalers and Retailers

BY Marc Millstein

For vertically integrated retailers, the opportunities today for leveraging more advanced tools to communicate throughout the enterprise—from the manufacturing to the retailing sides of the business—have and are still undergoing enormous change and vast improvements in key areas.

“You need to keep an open mind, have a clear whiteboard and no sacred paths in mind” when you are looking to invest in your next generation of systems, said Len Jacaruso, now executive consultant, Apparel Wholesale & Retail IS Management, and former VP, IT at Liz Claiborne. “Today is an extremely robust software field. You need to set an investment strategy that goes beyond the basics,” and ensures that you are not back in the same place in three years as you are today, Jacaruso said at TOPSS in Las Vegas in October. TOPSS, the Technology & Operations Store Summit, is produced by Chain Store Age and Retail Technology Quarterly.

The areas of advancement involve numerous key functions that heretofore have barely been addressed in an adequate manner by software companies. That is changing. One such prime area is product-development management, perhaps among the most crucial functions for fashion-oriented retailers.

“Tasks, design, colors—until just a couple of years ago, none of these functions were technology-rich. But now that has changed. There has been a tremendous amount of investment, and now CAD and CAM systems are being integrated into ERM and PDM solutions. They may still be only ‘loosely’ tied together—but it is getting there,” Jacaruso said.

Another area Jacaruso pointed to as high on the priority list and deserving attention by both retailers and software vendors was the availability of better software to provide three-dimensional (3D) renderings of fabric prints, something crucial to the way business is conducted today. “No one is going to make the buy based on that [3D], but it is now expected to be available as part of the pre-purchase process,” he said.

Jacaruso pointed to vendor portals and the opportunity—indeed need—for greater manufacturing-retailing automated collaboration as keys to winning in retailing. “Software is not yet shared nearly enough—it needs to be. Also, people do not do a good job in keeping track of who is doing what, what stage or where a product is in the manufacturing process, and other key points. It has to become more sophisticated,” he noted.

Other crucial areas Jacaruso cited as needing more attention included sourcing and being able to better understand and make much more precise choices regarding fabric and production quality, greater flexibility regarding shipping options right up to last moment, and improved opportunities to shift course in terms of SKUs, sizes and colors produced right up until the moment the article is actually made.

Jacaruso noted that while progress has been made in some areas more than others, much of what he was calling for was still a matter of ongoing development and refinement by software companies.

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CompUSA may get a new look

BY CSA STAFF

ADDISON, Tx. After opening a new format store last month, CompUSA may be changing the format of its other stores, depending on customer demand and product interest.

According to reports, the elements found in the prototype store, located in Texas, will be incorporated into other CompUSA locations across the United States.

The nearly 7,700 square-ft. relocation site includes an Apple shop featuring Mac computers, iPods and Apple accessories, and a full-length LCD TV wall.

Additional expansions include extended gaming, which includes an entire wall devoted to the Nintendo Wii, PlayStation3 and Xbox 360 gaming platforms, plus a PC gaming setup to test equipment and play new titles.

While businesses can get their share of support with a specialized services section, all consumers can visit the store’s redesigned IT support area.

“This new store aligns CompUSA’s vision to better serve its three core customers, the technology enthusiast, educated professional and small and medium businesses,” said Gabriela Villalobos, the retailer’s sales and operations evp.

CompUSA announced in April that it would narrow its focus to three core customer groups rather than try to serve a mass audience.

The move was part of a comprehensive restructuring, initiated last February, that included an overhaul of senior management and the closure of half its store base as the privately held chain looked to improve sales and profitability.

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Walgreens withdraws from CVS provider plans

BY CSA STAFF

DEERFIELD, Ill. After many months of talks over low and below-market payment rates by CVS Caremark for four prescription plans, Walgreens has withdrawn as a pharmacy provider from the plans.

Patients affected include members of prescription benefit plans managed by CVS Caremark for ArcelorMittal, Johnson Controls, Progressive Casualty Insurance and Wisconsin Education Association Trust.

Most of the affected members live in Illinois, Indiana, Michigan, Ohio and Wisconsin.

Trent Taylor, president of Walgreens Health Services, the managed care division of Walgreens, released the following statement:

“This is not where we wanted negotiations to lead,” he said. “We’re sorry that our pharmacy patients and CVS Caremark’s clients are caught in the middle, and we’ll do all we can to ensure a smooth transition for our patients to another pharmacy. Meanwhile, we’ll continue to work on resolving this issue with CVS Caremark.

“Leaving a benefits plan is an extraordinary step for us, but it demonstrates how extraordinarily low our payments were from CVS Caremark. We can’t continue accepting reimbursement rates that are drastically below market, while offering patients needed special services such as 24-hour pharmacy access and drive-thru pharmacies.”

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