September 3, 2002, 12:00 AM

Savings sales and cutting costs with a web-based inventory system

Finish Line is saving sales and creating inventory efficiencies with a web-based inventory-reporting system from Found.

A web-based inventory system that tells Finish Line Inc. stores where out-of-stock items can be found anywhere in the chain may seem to be a great customer service tool-allowing customers to get exactly what they want even if the store they are in is out of the item. And it has saved numerous sales since athletic shoe and apparel retailer Finish Line rolled it out to 454 stores earlier this summer.

But saving sales is only one of the benefits that Finish Line has experienced, says Roger Underwood, senior vice president of information systems. Another benefit comes in better management of inventory and fewer markdowns to move end-of-life merchandise. Chains typically consolidate end-of-life merchandise into one or a few sales stores. That requires personnel to round up the items, pack them and ship them to the consolidation store. Not only is there a cost to consolidating, but chains sell at discount to move the items. This system can ease those problems, Underwood says. “We expect to reduce the amount of consolidation we’ll have to do because we will be filling orders from stores that have the merchandise,” he says.

Finish Line has implemented software from Found Inc. that allows the chain to know in near real time the inventory in all stores and distribution centers. Finish Line feeds chainwide inventory updates to the Found Integrated Clicks and Mortar database every morning. The database then polls POS terminals in Finish Line stores every five minutes to learn store sales so it can adjust inventory. The information moves between via the web.

When a customer wants a shoe that is not in stock, a sales associate can log into the database from the POS terminal over Finish Line’s wide area network to locate the shoe in the chain. The associate places the order, the customer pays for the shoe, and the shoe is delivered to the customer’s home or office. “The program has done better than we expected,” Underwood says.

Finish Line pays the costs of shipping to customers, reasoning that if the customer had to pick up the shoe in the store, the chain would incur shipping costs to deliver it to the store. In addition Finish Line gets a completed sale where in the past, a customer may not have followed up.

The Found database is also linked to Finish Line’s e-commerce web site. If an online customer wants a product that the distribution center is out of, the database can find it in a store.

A further benefit that Finish Line earns from the system is that by examining items that certain stores were out of but for which there was customer demand, buyers can make more informed decisions about what to buy and which stores need more of certain products.

Underwood stresses, though, that the Found system is not a replacement for sales skills. “If the size is not in stock, we still hope the associates will come out of the backroom with a couple of alternate suggestions in the right size,” he says.

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