GUESS TO LAUNCH NEW WEB PORTAL
Byline: Jeanette Hye
NEW YORK — Guess Inc. said Wednesday it will launch a new business-to-business e-commerce portal next year that’s designed to streamline its internal operations while also creating an online trading community for the apparel industry.
The portal, a password-protected Web site located at www.apparelbuy.com, will create a forum for electronic purchasing and trading between Guess and its suppliers. By the end of next year, it will also function as an online marketplace in which any apparel manufacturer can participate and buy goods from Guess suppliers as well as other non-Guess suppliers.
“Business-to-business e-commerce is not a dream,” said Paul Marciano, co-chairman and co-chief executive officer of Guess. “The potential is even greater than that of business-to-consumer e-commerce and it’s going to save our company millions of dollars.”
The initiative is initially intended to allow Guess to streamline its own procurement operations by creating an online environment where its employees, licensees and suppliers can purchase goods needed to run the company. Those products can range from office supplies and computer systems to fabric and trim. Employees will be able to log on and purchase what they need.
Those purchase orders will then be electronically routed to supervisors for approval, and the entire transaction will be completed online. Guess employees will no longer need to fill out paper requisition forms, have them physically signed and then fax them to suppliers to be manually entered into their systems.
Licensees and suppliers who purchase through the system from Guess’s suppliers will be able to buy at a discounted price negotiated by Guess.
The electronic procurement system, from PeopleSoft, Pleasanton, Calif., will result in significant savings in cost and time, according to Guess officials.
“The more we use the technology, the less we have to focus on the day-to-day tasks required to run the business,” said Bryan Timm, Guess’s chief information officer. “We can focus on analyzing the business and taking it forward. A more efficient supply chain will allow us to take several weeks out of the design process and react to fashion demands more quickly.”
Marciano said e-procurement will not only cut down on the time, labor and storage involved in traditional procurement methods, it will also help eliminate human error, which he said accounts for up to 30 percent of the problems between suppliers and vendors.
During the second phase of the portal rollout, Guess will allow its retail customers to access the portal and purchase the goods and services they need, also at a discount negotiated by Guess.
“We want to extend our customer service to the people we do business with in any way that we can,” said Craig DeMerit, director of technology at Guess.
Ultimately, Guess hopes that allowing its retailers to buy its products on the site will create an environment where store managers can place orders to directly fill their inventory needs. Those orders will then be electronically approved by buyers on the corporate level before being sent to Guess.
Guess said the service will be particularly useful to smaller specialty retailers who can not afford to invest in traditional methods of electronic ordering, such as EDI, which is the method Guess uses to communicate with its larger retail customers. While alternatives to EDI are being developed, Timm said, Guess did not want to wait until they are eventually in place to create a forum for electronic trading with its retail partners and suppliers.
The company’s suppliers will further benefit from the technology when Guess, in the third quarter of 2000, allows other apparel manufacturers to participate in the forum.
Suppliers of products such as fabrics and trim will be able to post electronic catalogs of their products online. Apparel manufacturers will then be able to view those products and make purchases.
The site is hosted by Commerce One, Walnut Creek, Calif., which handles all transactions. The service will be free to everyone, but a transaction fee for each purchase will be charged by Commerce One.
Marciano added that Guess would like to model its business philosophy after companies like Sun Microsystems and Cisco Systems, which tend to share new technologies with the rest of their industry.
“It gets the entire industry heading in the right direction and it’s an incredible concept,” Marciano said. “People in this industry are not embracing technology because it appears to be too complex. But it’s not.”
Guess opened its e-commerce-equipped online store last March and has maintained an informational Web site for consumers since 1996.