The office supplies retailer say it sacrificed some sales to improve online profitability. It also redesigned its business-facing e-commerce site, StaplesAdvantage.com.
Whether it’s getting large EDI orders from big retail chains, smaller orders from locally owned skate, surf and snow shops, or individual orders from its numerous web sites and affiliates, the headphone brand Skullcandy is processing orders faster and more accurately than in the past—helping to drive up sales and profits.
Skullcandy knows headphones, and music lovers worldwide know its brand as one to wear when skiing, surfing, jogging or just kicking back and relaxing.
But the company, which designs, markets and distributes headphones, earbuds, gaming headsets and Bluetooth speaker docks, didn’t always know as much as it does now about how to smoothly process orders from retailers and quickly get them shipped out.
Now, I.T. director Mark Hopkins says, “It’s pretty cool. The time from when a customer hits the Buy button online until the order is sent to the warehouse for picking, packing and shipping, is within 30 minutes. So it’s a fast cycle. If the order gets to our warehouse by 1 p.m., it usually goes out the same day.”
That replaces a system that, until 2012, had often required Skullcandy workers to manually enter order information received from retailers through electronic data interchange—a painstaking process that sometimes involved weekend hours for a large order from a retail chain.
Since 2012, Skullcandy has been using “middleware” software from Jitterbit, which specializes in providing a central system for automatically transferring data among disparate software applications, including those that manage orders, inventory and external delivery services.
Skullcandy initially sought help from Jitterbit in 2011 after reviewing a number of data integration technology services to help it connect its Internet or cloud-based SAP Business ByDesign suite of business operating software, including order and inventory management applications, with a new third-party logistics provider. With plans at the time to expand shipping services into Europe, it decided to add Europe-based DHL as a partner—but realized it wasn’t going to be able to easily integrate DHL’s warehouse management and shipping software, for managing customs duties and other processes, into the SAP suite.
After checking other integration services, it chose Jitterbit for its flexibility, ease of deployment and strong technical support, Hopkins says. “It took about two weeks to have a working model of routing inventory and order data to logistics providers,” he says. “We quickly realized we could use Jitterbit for other things.”
For example, Skullcandy receives EDI orders from about 30 retailers, using SPS Commerce, an EDI services provider, to organize incoming EDI documents into a common format. But SPS doesn’t manage the integration with the SAP system to update inventory records and activate order fulfillment in Skullcandy’s warehouses. Jitterbit now provides that integration, Hopkins says, saving Skullcandy’s staff the time and hassle of manually reentering order data.
In addition, Skullcandy has learned how to get even more value out of the data integration service, he adds. Retail chains sometimes submit a single purchase order for a large number of items intended for dozens of separate retail locations. “We have to split the P.O. into each ship-to location,” says Yohan Beghein, Skullcandy’s senior network and operations engineer. Before Jitterbit, he adds, Skullcandy would print out the purchase order, then an employee would have to key in the details into the fulfillment system. “It was a very manual process, prone to error,” he says.
With Jitterbit, Skullcandy can set up business rules for each customer to automatically pass such complex purchase order details into the fulfillment system. “Once we get it implemented for each customer, it’s hands-off,” he says.
Another advantage Jitterbit offers, Hopkins says, is its ability to maintain steady control of Skullcandy’s data while one part of Skullcandy’s technology—such as its Magento e-commerce platform or its SAP business software—is down for maintenance. Because Jitterbit’s technology manages sequencing of messages, it can continue to process data from software that is still active, such as the e-commerce site, and hold it in a queue until another system, such as the SAP inventory management system, is ready to receive it. “It decouples our systems,” he says. “That’s super important. Now we can bring an e-commerce site down for changes, or bring SAP Business ByDesign down for an upgrade, and our overall infrastructure continues to function without interruption.”
The same kind of benefit applies when an external service provider temporarily shuts down its systems for maintenance. “If UPS brings down its warehouse management system for maintenance, we don’t care because Jitterbit just flushes things through when it’s up again,” Hopkins says.
The improvement and added flexibility in handling orders, meanwhile, has helped boost the company’s overall performance and customer service. Hoby Darling, president and CEO, says “better control” of distribution was one of main factors leading to a sharp improvement in financial performance in the first quarter ended March 31. Following declines in both sales and gross profit a year earlier, the company reported in this year’s Q1 a 10.2% year-over-year increase in gross profit, to $18.2 million from $16.5 million, as revenue increased 5.5% to $39.1 million from $37.1 million.
Jitterbit’s pricing starts at $1000 per month for integrating two data applications, and runs up to $5,000 per month for creating interfaces between eight data applications.
For a free subscription to B2Bec News, click here.