Retail Software Solutions

At the recent European Retail Forum, hosted by Cegid on the 10th June at the Tower of London, many retailers and supply chain partners spoke about the challenges of the current economic climate, after various high-profile victims on the UK high street, including Woolworths, Zavvi and MFI.
“The retail trading environment is difficult at the best of times,” they all said. But most agreed that adopting sound processes and following some general guidelines would provide more hope for many.

Rebecca Cotterell, managing director of the retail consultancy RC2 (the keynote speaker), gave hope and advice to many on surviving the retail storm. With her previous executive roles with retailers including Jaeger, Sears UK, Debenhams and Adams Childrenswear, she said that those retailers struggling are quite simply those that can’t get the right product mix in place to keep customers coming back for more. But she also pointed out that most victims on the high street all suffered from costs spiralling out of control, sometimes with over a year’s worth of unwanted stock filling up the warehouse, or shelves.

One of Cotterell’s recipes for success was good range planning and inventory management. Given that the conference was being organised by European retail software vendor Cegid, retail technology was to be a concurrent theme throughout the day. Technology alone, though, was rarely enough for sustained success, she said.

“You need good processes and good people to be able to get the most from any investment in IT,” said Cotterell.

Other presentations, from Cegid’s retail customers including Habitat (homewares), Quiksilver (surfwear) and Cannelle (lingerie), touched upon the challenges of managing international retail businesses, fast-expanding overseas. Many spoke about the problems of inheriting out-of-date IT systems, unable to cope with the sophisticated needs of retailing today. Most retailers there had originally turned to Cegid, because of the need for off-the-shelf retail-ready software systems that could cope with multi-lingual or multi-currency business needs.

An increasing number of retailers are demanding more and more from their IT systems, as well as still wanting them to be generally easy-to-use and visually appealing. On-the-job training in how store staff can use a system needs to be quick and simple, especially given the high turnover of staff in retail. Isabelle Mille, retail operations manager at Quiksilver, said that with 1,200 staff and 430 stores now spread across Europe, it was looking at developing training modules via the internet in future.

“Training via the web is easier and cheaper than physical face-to-face contact,” she said.

There’s also a growing number of retailers looking for support and software solutions available via the internet. According to Paula Paravecchio, managing director of distribution and services, Microsoft EMEA, more industry IT services will move to the web, or ‘cloud,’ in future. Independent research from IDC predicts that ‘cloud computing’ will grow almost threefold by 2012. For instance, Cegid already supplies point-of-sale retail applications to fashion retailers like Lacoste and Timberland via the ‘cloud.’

The internet also provides retailers with a fast-growing sales channel. Habitat said it receives around 20,000 hits a day from customers and is hoping to introduce an online offering for this coming Christmas. After having implemented Cegid’s point-of-sale software in its 75 stores across Europe, Alyna Farrer, retail business manager at Habitat, said that the retailer is now having to focus on improving stock availability, especially given the tough sales environment in retail today. Cost savings and improving service seem to be the biggest drivers.

“We need to upgrade our systems to take advantage of new functionalities, such as capturing contact information on customers for more targeted offers and any cross-selling opportunities,” she said. “We also need to be able to trigger the replenishment of stock more directly from our point-of-sale system.”

Cannelle, the French lingerie chain, appears to be leading the field in fashion retailing by using forward-looking supply chain planning technology to help it more accurately plan ahead the quantities and types of merchandise required each season (an IT approach more common to grocery retailing).

The fashion brand is tackling the retail supply chain head-on, by trying to stock the right amount of the right products at the right time, by using an Open-To-Buy (OTB) tool in the new Cegid software. OTB is more of a ‘pull’ approach (rather than a traditional ‘push’ system), which essentially calculates the difference between how much inventory is needed and how much is actually available. This includes inventory on hand, in transit and any outstanding orders.

In order to plan ahead for the introduction of new products, OTB allows the retailer to react to fast-selling items and quickly restock shelves. It also avoids having too much inventory (or the wrong type), which can reduce profits by forcing the retailer to markdown surplus stock.

By working in partnership with Cegid on developing the Colombus.Next software, Sandrine Smith, Cannelle’s supply chain director, acknowledged that processes have become more standardised in the company, so working methods have greatly improved.

“We expect an increase in sales from more efficient replenishment, as well as improved speed of reaction, by using Cegid’s technology,” said Smith. “Better planning and ordering stock that’s more in-line with what the customer wants, will ensure keeping shelves fully stocked with new lines, without too much exposure to lost revenues from unplanned markdowns.”

Smith, however, acknowledged that forecast accuracy was always going to be a challenge.

“We inherited and imported data from a mixture of previous outdated IT systems,” she said.

Much like her fellow presenters from Habitat, RC2 and Quiksilver, most upheld the ‘rubbish in, rubbish out’ mantra, which suggests that for many retailers who are upgrading or replacing their IT systems, data accuracy is another prerequisite to success.

With tough times, some retailers are certainly being forced to resort to tough measures. And the winners, managing successful international retail businesses, all seem to be focusing on reducing costs in the supply chain and becoming more efficient – generally through a mix of people, process and systems.

For further information on the European Retail Forum, please contact Lyndsey Sparnon lsparnon@cegid.com