The web and the store: A match made on the POS terminal
By Paul Demery
When Bill Millikin decided to complement his Mary Engelbreit apparel store and catalog with a web site, he expected fast growth in online traffic that would bring his retail operation to a new level of performance. “We figured the web was a good fit for us,” he says.
But Millikin, president and CEO of retail services provider Millikins LLC, was in no rush to begin cashing in on web sales. The windfall of e-commerce revenue would come, he figured, but not until after he had an integrated POS system that could automate order-taking and provide additional operational benefits for both his store and his web site without adding staff. Without that integration and automation, the expected growth in orders would be too costly, he says.
No re-keying
“We had projected from the beginning that we would have a lot of web orders, but what kept us out of e-commerce the first year was having to re-key order information,” Millikin says. “We wouldn’t have been able to stay in business, because volume and success too early would’ve killed us. So we built e-commerce integration first.”
The careful strategy has paid off, Millikin says. His
MaryEnglebreit.com is producing more sales than the showcase store he operates in St. Louis. Millikin, who operates retail operations under license from brand owners, says he expects to be operating three sites on the same platform later this year, handling more than 600 orders a day combined. “It’s important for us to be able to handle those orders with minimal amount of manpower,” he says.
Key to his strategy was implementing an e-commerce platform that could leverage a web-enabled in-store POS system that integrated sales data from web site, store and catalog. That enabled him to realize several cost-saving and revenue-boosting benefits that many merchants see as crucial to successful retailing: automating order entry, gaining visibility into and control of inventory, and providing a technology base that can scale up to coincide with growth in sales. And, he adds, do it across multiple channels.
A national strategy
That kind of integration has also helped other retailers with modest brick-and-mortar presences kick off an e-commerce strategy that leverages multiple selling channels. Since deploying a web-enabled POS system similar to Millikin’s last fall, Santa Cruz Surf Shop Inc. has quadrupled sales on its two web sites, Surfboards.com and
Skateboards.com, says CTO Gabe Parr. The difference stems from the new ability that the retailer’s business managers now have in quickly deploying online merchandising strategies based on what’s selling on its web sites as well as in its two stores, and from the automated updates of cross-channel inventory records that make it possible for the retailer to streamline warehouse operations as well as customer service, Parr says.
The system works so well, he adds, that Santa Cruz Surf Shop—which operates two stores and two web sites in the surfside community of Santa Cruz, Calif.—envisions leveraging its generic web site names as the basis for opening surfboard and skateboard shops in other parts of the U.S. “These could be building blocks for opening more stores,” he says. “We can only sell surfboards along the coast, but skateboard shops can be anywhere.”
Millikin started on his road to multiple web sites in 2003 with a strong background in retail technology. He had spent several years as an information technology director for Mary Engelbreit Enterprises Inc., which develops and sells products ranging from greeting cards to dinnerware
and fabrics adorned with Mary
Engelbreit illustrations of people, houses, flowers and other subjects.
Mary Engelbreit products are sold through thousands of independent stores and boutiques as well as through the brand’s single store in St. Louis and at
MaryEnglebreit.com.
When he launched
MaryEngelbreit.com in 2003, Millikin was already operating the brand’s St. Louis showcase store with the RetailPro retail software suite from Island Pacific Inc. RetailPro runs the store’s POS operation and inventory management, but Millikin realized he needed an additional system to integrate those operations with the operations of the new web site.
Deep integration
After checking several software options, Millikin, who had worked as a technology expert at POS software companies prior to Mary Engelbreit, decided to deploy StoreFront web-based software from LaGarde Inc. The system is designed to integrate POS data from stores with the shopping cart system on the web site, then further integrate that with inventory data, making it possible for Millikin to get a central view into overall sales and inventory records.
A big advantage of going with StoreFront is the availability of its application programming interface, or software code, which lets Millikin easily modify the system with additional modules and custom features, he says. Millikin turned to a third-party systems integrator, Retail Dimensions, to integrate the StoreFront and RetailPro applications.
Using XML and other technology over an Internet connection, the integration between StoreFront and Island Pacific’s
RetailPro lets the web site and store systems automatically share information on sales, inventory levels, pricing and product
descriptions. That allows business managers, without help from code-writing IT departments, to view reports on sales and inventory data to see how sales are performing and make any necessary changes to merchandising and promotional campaigns. “When a manager runs reports in the morning, he can see reports on data from all stores as well as the web site,” says Robert LaGarde, founder and CEO of LaGarde.
“We’re seeing any retailers serious about e-commerce wanting to address these integration issues,” LaGarde adds. The system supports Millikin’s strategy of operating a turn-key e-commerce platform. While licensing the rights to the Mary Engelbreit brand, he takes ownership of the inventory and handles all fulfillment and customer service for the web site in addition to operating the St. Louis store.
The integration between the StoreFront and RetailPro applications for sales information at the Mary Engelbreit store, its call center and web site lets Millikin view and compare sales and inventory data for all channels, getting a better read on the demand in each channel and reducing the amount of safety stock he has to keep on store shelves.
Understanding demand
But Millikin is building his e-commerce business beyond the Mary Engelbreit brand and developing a specialty in licensing and operating e-commerce sites for other artists who sell assorted products through specialty retail channels. He has launched a
web store for crafts retailer
Debbie Mumm Inc. at
Shop.DebbieMumm.com and will soon launch another online retail shop for artist Karen Rossi at
KarenRossi.com.
The three sites will share the same e-commerce platform, so that one order management
system will control orders from
all sites, Millikin says. “We have three different brands, but the orders all flow into the same
order-entry system, and support our single pick, pack and ship operation,” he says.
By not having to re-key data from web orders into order management systems, Millikin can avoid logjams that can slow service. “When we’re handling 500 orders a day, we can’t keep re-keying all that data,” he says.
Shallow inventory
For Santa Cruz Surf Shop, which uses a similar combination of StoreFront for its web sites and RetailPro for its stores, the integrated platform serves its strategy of spreading out products on its web sites without much depth in items per SKU. Skateboard manufacturers offer as many as 50 variations of each product, with the emphasis on presenting different graphic treatments to cater to the whims of customers looking for a particular design or mix of colors.
But the shallow inventory often resulted in a customer ordering from an image that was no longer in stock, leading to post-order customer service expenses, Parr says. But no more. Now the web-enabled POS system automatically removes images from web pages as soon as a particular SKU is deleted. “Dynamically pulling inventory from the web sites has cut down on customer service costs,” Parr says. He figures Santa Cruz Surf reached ROI in the StoreFront
system in the first couple months of its deployment. “Now we have just one customer service rep for both stores and the two web sites,” he says.
Because StoreFront makes its programming code available to
developers, users can benefit from new features developed by others. By searching on the web for StoreFront applications, Millikin has found multiple modifications that provide for improved retail operations, he says. For example, he has found and deployed a streamlined StoreFront checkout system that reduces the number of steps to three from five.
Quick change
Another modified module acquired from outside developers makes it easier and faster to change product details in back-end databases that instantly show up on web pages. “It lets a marketing person change product structures without having to get the IT department to do coding, so it’s a lower cost of ownership,” Millikin says.
And it’s the combination of system integration and lower operating costs, he adds, that gives him an edge to be competitive. “If we weren’t integrated, we wouldn’t be in business,” he says.
paul@verticalwebmedia.com
