September 1, 2006, 12:00 AM

Moving Merchandise

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Although the web accounts for only about 20% of sales, Limoges Jewelry is operating on a course to sharply increase that share by building its presence in several shopping portals and comparison shopping channels,,,,, and, plus search sites Google and Yahoo as well as on “We’re up 84% year-to-year so far this year, and we were expecting 34% for the full year,” Stache says. Limoges Jewelry, a unit of MBM Co. Inc., is ranked No. 427 in the Internet Retailer Top 500 Guide to Retail Web Sites with an estimated $7.2 million in 2005 sales.

Mercent Retail brings benefits in two areas, Stache says: It frees her and her staff from having to spend time feeding data to third-party sites, and it provides daily data updates to show how each SKU is selling in each channel.

Under its former system, Limoges Jewelry would receive weekly inventory updates, which wasn’t good enough for online shopping portals. “Our inventory was only accurate once a week, so sites didn’t have the right out-of-stock information at the right time,” she says.

Now, with the web-based Mercent Retail system using XML to transfer new inventory and pricing data daily from Limoges’s Oracle database to third-party sites, then feed back inventory updates from these same sites also on a daily basis, Limoges Jewelry has improved the shopping experience and increased inventory turns and sales by providing shoppers on partner sites with more accurate inventory status and by reacting faster to out-of-stocks.

Finding variations

“Any time we see a product doing well in any channel, our merchandise people work to get more variations of it,” Stache says. But it takes two to six weeks to develop a new product, depending on where it’s coming from, she adds, and the retailer’s former inventory management system often didn’t produce information quickly enough to plan products, many of which can be personalized. “Now we can act faster, so we can show customers hot products when they still want them,” she says.

Mercent charges a percentage of sales for Mercent Retail, plus set-up fees that range from about $499 to $20,000 based on the amount of integration needed with third-party sites.

Retailers can save on some set-up costs if they’re already operating on e-commerce platforms such as OrderMotion, CommercialWare and Venda, which are easier to integrate than most home-grown systems, Mercent says.

Because Mercent Retail produces daily data on each SKU placed with each shopping site, Limoges can also use the inventory updates to better plan marketing and merchandising strategies, Stache says. “If a product does well in a print advertising campaign, we’ll also push it on our web site and bid it up higher on comparison shopping sites,” she says.

By integrating daily information on inventory turns with the profit margins of separate SKUs, retailers like Limoges Jewelry can set business rules to automatically bid up search marketing and comparison shopping site placements on the fastest moving, most profitable SKUs, says Mercent CEO Eric Best. “That should be the driver of marketing budgets across online channels,” he says, adding that inventory updates with shopping portals can be done as fast as every 15 minutes.

Expanding SKUs

The ability to manage inventory in partner sites down to the SKU level also makes it easier to satisfy the requirements of different sites, Stache says. “Every time we add inventory, we have to tweak it for each channel,” she says. With mounted-stone pendants, for example, some sites record a single SKU for the entire item, but other sites record a “parent” SKU for the pendant and a “child” SKU for the stone. “We can tell Mercent to send just one SKU or both the parent and child,” she says.

Maintaining inventory of about 1,000 SKUs, Limoges Jewelry brings in at least 30 new SKUs per month while others may go into clearance and become discontinued. But with its enhanced ability to view inventory movement and quickly respond with new inventory, “our overall SKU count could grow,” Stache says.

Like England’s Authentics, Limoges Jewelry is gearing up for increased sales thanks to additional selling channels presented by the web. But it’s because of new inventory systems built on web-based integration technology that both of these relatively small retailers appear headed to bigger things.


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