Lucky Brand gets ‘scrappy’
Invention is the mother of necessity when it comes to Lucky Brand embracing the cloud.
The apparel retailer’s cloud strategy was not as methodical as other retailers. Indeed, it wasn’t even a choice. Rather, it became a critical option when Lucky Brand’s parent, Fifth & Pacific Companies, sold the retailer in order to focus on its core Kate Spade brand.
When owned by Fifth & Pacific, Lucky Brand operated under the Kate Spade umbrella, where it leveraged shared services for IT, finance and accounting, human resources and supply chain, and augmented its operations with legacy systems. After the sale, it had a transition services agreement that allotted it 24 months to be independent — and to operate its own systems.
With no formal IT team or transition plan in place, Lucky Brand quickly developed an IT strategy based on cloud-based systems and never looked back.
“We had a blank slate and decided to leverage cloud capabilities wherever possible,” said Luis Malave, VP of applications for Lucky Brand, at the Oracle Industry Connect conference. “We were scrappy in our approach, and had to get up to speed if we wanted to compete.”
Lucky Brand hired a CIO and put together a team that launched a cloud-based supply chain operation in late 2014, followed by corporate and retail applications in 2015. Since then, the brand has adopted a cloud-based enterprise resource planning system, financials, e-commerce and loyalty program.
Along with a rapid three-month return on investment on its initial applications, “the process taught us we can mange more with less people,” Malave said.
“People speculate that retail is dead, but it’s not,” he said. “Instead, it is evolving and changing, and this is forcing all companies to shift and learn to do things differently if they want to compete. We needed to change, and cloud solutions are helping us step up our functionality and level the playing field.”
Kroger promotes healthier eats with nutrition-based tech
The Kroger Co. is introducing interactive platforms, including an updated app, to guide customers as they make healthier purchase decisions.
Colleen Lindholz, president of the Cincinnati-based chain’s pharmacy division and The Little Clinic, said the initiative is part of an app update that will help tie a better-health-through-food program into the interactive platforms consumers are already using to navigate their shopping experiences.
“This is all in an effort to support the vision and mission that Kroger has, which is to help people live healthier lives,” Lindholz told Drug Store News at the recent National Association of Chain Drug Stores Annual Meeting. “We’re trying to meet the customer where they are and where they want to be, whether that be in the store or digitally online.”
In stores, Kroger is piloting a program that will staff each supermarket with a nutrition technician through the agency Besomebody Paths. These “techs” will be engaging, customer-focused employees who will work to raise awareness around healthy food choices and the pair of licensed healthcare professionals — the dietitian and the pharmacist — who can help tie those healthier food choices into a comprehensive disease state management program. A total of 18 dietitians will be active across Kroger’s footprint, Lindholz said, one for each of its operating divisions.
Kroger also is building healthy food guidance into its OptUp shopping app, which launched on April 30. “OptUp takes the items you buy at Kroger on your Kroger Plus card and gives you a total [shopping cart] score that shows you how healthy your basket is,” Lindholz said. Each food item and its respective health value is loaded into the app, along with suggestions for healthier choices on similar products for their next shopping trip.
Kroger is employing an algorithm validated by the University of Cincinnati to score each item on a nutrition scale of 1-to-100. The corresponding suggestions are designed to take shoppers along their health journey at a more gradual pace. “We’re trying to help our customers make better food choices, but not go from A to Z overnight,” Lindholz said. “If I’m eating [cookies] for the last five years and that’s my snack, you’re not going to take me to broccoli or even grapes if [cookies] are what I love. What’s great about this app is it suggests items that are higher in nutrients, [but] not that much higher.”
All of this will lay the groundwork for Kroger’s future plans for its dietitians, pharmacists and the food side of its business under the “Wellness Your Way” platform. “Just like our Simple Truth brand has become a $2 billion brand, we want to tie wellness overall into one platform so it becomes seamless for our customers,” Lindholz said. “We’re working on a long-term predictive analytics tool and the power behind some of the big payers.”
Kroger did a soft launch of the platform in February and plans to introduce that platform in a meaningful way in 2019.
Gap looks to the cloud
Gap Inc. is moving to the cloud — and it’s beginning its journey with Intermix.
Gap acquired the upscale specialty brand in 2013. And unlike Gap’s other brands that all used similar software to support business operations, Intermix was laden with a “hodgepodge collection of best-of-breed and homegrown systems,” said Paul Lamoureux, Gap’s senior director of IT, at the recent Oracle Industry Connect conference in New York City.
Along with systems very disparate from those in Gap’s data centers, Intermix’s merchandising and inventory management systems relied on cumbersome, error-prone reporting processes. These inflexible systems also made it difficult to scale the brand for future operations.
“We’ve had the platforms and the money to upgrade them, but we struggled with how we were going to build this for the future, continue to release new versions and keep them current,” said Connie Santilli, VP of enterprise systems and strategy of Gap.
Intermix’s increased convergence of stores and digital was also taking a toll on its aging systems, especially as increasingly digital shoppers moved between channels.
“We need digital touchpoints everywhere since people want to shop anywhere, anytime and on any device,” Santilli said. “We have to [focus on] converged commerce and the solutions that bring online and stores together.”
These challenges dovetailed within Gap’s vision of modernizing the brand’s systems — a catalyst that would help transition Intermix onto the same processes used across the Gap family. As a solution, the company began moving Intermix onto Oracle’s retail merchandising system.
In addition to simplifying operations, the system delivers a consistent merchandising platform. The technology synchronizes end-to-end merchandising operations from buying to inventory valuation, driving a single version of the truth. Daily tasks, such as purchase order approval and sales auditing, also become more efficient since they are supported by exception-based dashboard notifications and alerts.
The retailer spent six months cleaning and standardizing data, and converting the information into the new system, said Rick Whicker, senior director of enterprise systems and strategy.
“By standardizing the data, we kept information fresh and transitioned Intermix onto a standard code base that we use internally,” Whicker added. “Our brands don’t have to use data and software functionality the same way, but all code needs to be the same.”
Intermix went live on the cloud-based system in September. The project marked the first step in Gap’s long-term journey to adopt cloud technology across its global operations. The retailer is currently planning to bring its Banana Republic brand onto the cloud-based platform, followed by Old Navy.
“The key was to get our feet wet with Intermix, and use the experience to ensure that we could get our bigger brands to scale,” Whicker said.
Cloud also is shaping up to be “a major strategy for us,” Lamoureux added. “Cloud will optimize our costs, including those associated with software maintenance. Not being tied to on-premise solutions will lower our total cost of ownership and deliver a stronger ROI.”
The company expects to move a majority of its workload into the cloud over the next three years.