Target and Toys R Us posted overall sales declines during the holidays.
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Dydacomp enables Fashion Connection to update inventory status to multiple external web sites as well as to FashionConnection.com, Pelletier says. M.O.M. maintains inventory data in a central database, updating records as orders are placed through any of a retailer's online selling channels. A point-of-sale software module, part of the M.O.M. system, updates that inventory database with physical store orders.
For retailers operating on e-commerce sites other than SiteLink, Dydacomp integrates with online order management and inventory systems through application programming interfaces or other forms of sharing and updating data. Clients on the Magento open source e-commerce platform also have the option of working with BizSyncXL integration software from Freeportway, a provider of integration technology services that has worked with Dydacomp to develop tools specifically designed to integrate Magento and M.O.M.
Buy.com, Sears and Facebook
"Now we'll consider selling through additional e-marketplaces, including Buy.com and Sears.com," Pelletier says. "We had tried getting our products out to Buy.com before Dydacomp, but it was too much work."
Further into the future, he adds, Fashion Connection may also use its new inventory management system to enable it to sell products through a Facebook storefront.
The cost to deploy M.O.M. ranges from $10,000 to $30,000 for a license on a per-user basis, and the company's clients range as high as about $50 million in annual sales, says Fred Lizza, CEO of Dydacomp.
Active Sports, whose flagship e-commerce site is The-House.com, sells a broad range of winter and summer sports gear and apparel. Since launching its own e-commerce site in 2004, it has grown to fulfilling several thousand orders a day while presenting its brand and products through several of its own sites, more than two dozen manufacturers' sites, social media, Internet search listings, affiliate web sites and e-marketplaces including Amazon.com and Buy.com.
Active Sports runs its e-commerce operations on a customized software platform built on VMWare Inc. technology hosted and managed by Atomic Data. In addition, it uses technology from CoLinear Systems Inc. that supports updated inventory availability across channels.
The retailer uses a variety of ways to connect its inventory system with outside selling channels, such as application programming interfaces, or APIs, and data transfers via XML, the web language designed for transporting information. The CoLinear Response Order Management system, which includes modules for updating inventory availability, ensures that products displayed to consumers in any shopping channel are available for order fulfillment.
Making the system work for each retailing channel can take extra work, however. The easiest and fastest inventory updates occur on Active's own e-commerce sites because of the tight integration within its own infrastructure and applications, including the shopping cart and warehouse management system, says Vilsack, Active's director of I.T. Even as orders come through external channels, Active can rely on the CoLinear system to update product availability on its own sites within seconds.
A license for CoLinear's Response system costs about $1500 to $2500 per concurrent user, or about $80,000 for a retailer that wants to let 40 people use the system at the same time, according to CEO Scott Weaver. CoLinear targets clients with annual revenue of up to about $70 million and up to 10,000 orders a day, he adds.
Active will also set safety stock levels, and will begin to temporarily stop showing that an item is available when the inventory system shows no more than five SKUS in stock. Having the minimum threshold guards against inaccurate inventory tracking and the chance that, with a sudden burst of several orders for that item, consumers at the tail end of the ordering line would find that the item was out of stock.
But while updating inventory availability of particular products throughout its own site can take seconds, updating product inventory on external sites, particularly comparison shopping engines, often takes longer because of each site's data formatting and exchange requirements, Vilsack says. Active Sports will compensate for the extra time by setting a higher available inventory threshold—such as six or more SKUs instead of five—to trigger the temporary removal of product listings on such external sites.
"Out-of-stocks will always be issues," Vilsack says, "but as we keep analytics on it and measuring it, we'll be able to shift our business so that inventory thresholds are correct."
Flexible updates Having flexibility to update inventory separately on each retail channel also comes in handy in other ways. A product supplier, for instance, may request Active not to display its items on discount e-marketplaces so as to protect its brand image. "Honoring our vendor agreements is crucial," Vilsack says.
Technology, of course, cannot ensure that no online shopper will ever be disappointed because an item is out of stock. But to retailers like Active Sports and Fashion Connection that are both growing on the web and maintaining physical stores, it gives them an edge.