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Merchandising in Focus at Retail Systems

Merchandising and allocation systems were top of mind for many retailers and exhibitors attending Retail Systems in Chicago last week.

CHICAGO — Merchandising and allocation systems were top of mind for many retailers and exhibitors attending Retail Systems in Chicago last week.

Pacific Sunwear of California is gearing up to find — and implement, in 2006 — an advanced suite of planning software, said Ron Ehlers, vice president, information services. The tool could prove particularly valuable as Pacific Sunwear tests new product categories such as bedding, lamps, luggage and other accessories for its young customers.

Barneys New York is rolling out a new merchandising program and distribution system to accommodate anticipated growth, now that the company has been bought by Jones Apparel Group. The luxury retailer’s plans were detailed by Jones president and chief executive officer Peter Boneparth in the keynote speech that opened the show.

Boneparth also gave attendees an overview of the $4.65 billion Jones business, which is focused on the customer and giving her what she wants, he said. To keep pace, some of Jones’ key technology initiatives include:

  • Electronic data interchange with retailers (via the QRS Tradeweave online catalogue).
  • Systems that allow the company to test items and quickly react to results.
  • Product life cycle management software from UGS Corp.
The company has finished phase one of its three-part rollout of the PLM software, according to QPS. Boneparth also described areas of growth for the company, which include expansion into China; growing what he called the mass market end of the Anne Klein business, AK Anne Klein; buying boutique brands such as Bridget Shuster shoes, and opening new retail formats, such as the recently introduced Trezon plus-size stores.

Among exhibitors, one of the new companies at the conference, Apex Decisions of Savage, Minn., showed off its forthcoming allocation service, which automatically redistributes sizes, colors and styles of merchandise between individual stores based on the first two weeks of sales.

In his keynote the next day, Best Buy executive vice president of operations Bob Willett detailed the $27.4 billion chain’s plan to simplify technology behind the scenes.

The consumer electronics retailer uses five software packages to automate the process of scheduling labor. Also in use are seven order management systems, three tax applications and four separate warehouse management systems.

“This is commonly referred to as a ‘hair ball,'” Willett said. A great number of technologies that do not interconnect well can choke processes and stall decision-making.

“Today, you have no time to make very complex decisions and that [means] you need a different operating model,” he said.

Best Buy’s new model, which puts its weighty technology infrastructure on a diet, is projected to reduce information technology cost to 1.5 percent of sales from the 2.1 percent of sales it represents today, Willett said.

When the transformation is complete in two years, Best Buy expects the 800 technologies that create a hair ball of complexity will be scaled back to just 240 technologies.

“The whole message here is simplicity,” Willett said of the new infrastructure plan.