PACIFIC TRAIL’S BETTER B2B COMMUNICATION
Byline: Brad Barth
SEATTLE — Accustomed to taking orders, not dishing them out, apparel manufacturer and wholesaler Pacific Trail identified one business division — performance outerwear — that could influence how retailers communicate.
According to Peter Smith, chief operating officer at parent company London Fog Industries here, the company will soon launch a private business-to-business trading Web site for this division, which sells mostly skiwear. Operations of the site will be outsourced to an application service provider.
Relaying order and product information over this Web site, using an electronic data interchange connection, will reduce the need for retail clients to contact the company’s call center agents and sales representatives, Smith explained. This will free up sales reps to interact more with customers and reduce the need to hire additional call center agents as the company grows. “We’ll be able to leverage existing staff to do higher value activities,” said Smith.
Comprised of five separate apparel divisions, Pacific Trail selected its performance outerwear line for the B2B Web site because, said Smith, the majority of the 1,500 retailers that buy merchandise from this division are small to medium-sized companies that can be persuaded to adopt the new order system. Smith expects about 50 percent of retailers to join the network immediately, with another 30 percent complying over time.
Some of Pacific Trail’s other divisions deal primarily with major department stores. Typically, these retail giants set order management policy and expect vendors to comply with their standards. “You have companies like Federated and May and Saks trying to decide what venue they’re going to use for B2B, whether that be more public exchanges or private environments,” said Smith. “In those segments of our business, they’re so big and powerful, they’re going to dictate to us how they want to see product.”
Smith said that if Pacific Trail created a B2B Web site for its rainwear division, hypothetically, “We could be totally usurped by the department stores. I could spend a couple of hundred thousand dollars on this effort and end up being blindsided by a major customer like Federated. And frankly, because they’re big and we’re much smaller, we’d have to follow.”
After mulling its options, Pacific Trail concluded last year that outsourcing its own company B2B Web site would be more prudent than joining one of the many apparel exchanges now competing for business. While the benefits of entering a B2B exchange network would be similar to those generated by a private Web site, Pacific Trail eschewed the former option because, said Smith, the company is concerned that certain apparel exchanges are in danger of folding.
“Some of these exchanges are like the early days of Internet e-commerce — some are going to make it, some are not. We don’t know who the winners and losers are going to be,” said Smith. By constructing its own Web site, “We don’t have to gamble the company’s well-earned money on one or the other. We can give it some time to see how big boys sort it out.”
“There’s a real war going on between B2B exchanges trying to lure in companies,” Smith said. “We decided to go on our own because exchanges are pretty volatile right now.”
Moreover, having its own B2B site will give Pacific Trail more control over how orders are communicated. “With the exchanges, you’ve got to expect that it will be 90 percent their way and 10 percent your way,” said Smith.
Lacking the information technology manpower to build and maintain its own site, Pacific Trail will pass those responsibilities on to Bellevue, Wash.-based CobWeb. While working with an application service provider means that parts of the B2B site will be comprised of stock features and content, Smith nevertheless estimates that about half the site will be specific to Pacific Trail, addressing the company’s individual specifications.
But while Pacific Trail has final say over the look and feel of its site, that does not mean its retail partners aren’t expecting some of their standards to be met as well. According to Smith, all buyers are looking for timely order data and ample product information. “The world’s not getting more relaxed about their demands for information,” said Smith.
Therefore, the company will use its B2B site to market its product line in a manner not unlike how retailers present merchandise to customers. While some wholesale companies can still get away with showing retailers line drawings and artist’s renditions, Pacific Trail’s site will include meaningful item descriptions and digital images of each product. “Buyers have upped the ante and expect us to put together an operation and presentation equal to the best catalog operators in the world,” Smith explained.
The site is also expected to streamline communication between parties and make the order management process less paper-intensive. Currently, when a retailer places an order, it will not receive a confirmation from Pacific Trail until one or two months later.
However, said Smith, “The customer service aspects of the B2B site should replace the need to mail out confirmations by giving people real-time information.” Because the site front end will be integrated with Pacific Trail’s legacy order management system, “Any time the retailer wants to check on the health or well-being of an order and have some vision into our supply chain+it can look at the same real-time data as our manufacturing branch.”
The site should be live by March, in time to collect orders that will ship over the summer and hit store shelves by fall, when skiwear is in demand.