Retail Brand Alliance is going for a much more “buttoned-up” look, but not in the sense its classic Brooks Brothers label might evoke.
The privately held company is looking to deploy technology to close gaps it has identified in communications with stores, in its ability to respond to fashion trends and even the customer experience, according to Claudio Del Vecchio, president and chief executive officer. In addition to Brooks Brothers, RBA operates women’s apparel stores under the Casual Corner and Petite Sophisticate banners, as well as the Carolee Designs and Adrienne Vittadini divisions.
“We want to be faster, to get product developed and delivered to the store faster. From a fashion standpoint, we need to do that,” he said. “From a business standpoint, we also need very good replenishment processes instead of creating inventory around the world.”
Del Vecchio said RBA carries excess inventory today because its ability to forecast and get product to stores is based on costs of moving it through the supply chain. However, a cost-driven approach no longer holds up with fashion trends changing faster than ever and companies like H&M and Zara speeding them to shelves.
The Casual Corner customer was once satisfied with RBA’s updated fashion mix but today she demands styles offered closer to the origin of the trend, he said. “So, we have to speed up the processes,” he said. “It’s not enough to develop something nine months before it gets to the store.”
He rates RBA’s supply chain systems a seven out of 10 in terms of capability, “but from an operational standpoint, there is still a lot on the wish list,” he said. Del Vecchio toured technology vendor exhibit booths at the National Retail Federation show in January to scout out supply chain solutions that could enhance RBA’s speed to market, but he wasn’t dropping any hints about what those investments might be, or how soon.
That Del Vecchio accompanied his top technology executive to visit vendor booths at the show is significant, even if he downplays it. Few chief information officers get the chance to grill vendors in the presence of their ceo’s. Most would like to, if only to ward off the dreaded “airline magazine syndrome” that strikes ceo’s trapped in flight with time on their hands. The malady, brought on by a magazine article hyping the latest techno-fads, seduces ceo’s into thinking they need the technology flavor of the month, and then it’s the cio’s burden to explain why the latest and greatest is not ready for prime time.
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“I am a curious person. I like what I do and I understand that this is part of what I am supposed to do,” said Del Vecchio, clearly surprised the practice of ceo’s and cio’s touring show floors together is not more common. “I am hearing the story straight from the vendors to get a better picture, to save time and be more efficient.”
Though he’s technology-savvy, Del Vecchio is no techno-geek. A cell phone is enough personal technology and he won’t carry a BlackBerry for continuous e-mail access.
“I’d be on it 15 times a day. It really bothers me to see people sitting at a table with a BlackBerry in front of them and all they are doing is checking, checking, checking — instead of just thinking about what they are doing.”
POS — A New Environment
While RBA plots strategy for a faster supply chain, it’s already bringing greater speed to stores with new point-of-sale technology. “From a capex [capital expenditure] standpoint, it’s the biggest expense this year,” Del Vecchio said.
About two dozen Brooks Brothers stores have new POS systems installed, and the entire 168-store chain will be outfitted this year, or by spring 2006 at the latest, said Stefano Gaggion, vice president, management information systems.
“Let me call it, instead of ‘point of sale’ — the ‘new environment,’” Gaggion said. While the new POS system is the store’s heartbeat, other less visible technologies keep that beat going. High-speed communications and Cat-5 network cabling, centralized credit authorization, an electronic journal and an automated product returns system round out the picture.
“We are changing the entire infrastructure from a store standpoint in terms of cabling, hardware, PCs in the back room and the receiving station,” he said. This new environment will “close the gap” between corporate and stores as far as information-sharing ranging from daily sales to product updates, marketing and even education and training.
Brooks Brothers’ new Java-based POS system consists of software from ADS Retail, touch screens/PCs from IBM and scanners from Symbol Technologies. Back room scanners used for receiving are from Metrologic and centralized credit card authorization is supported by payments processor Integrated Systems Development.
Gaggion said centralizing credit card authorization has reduced response times from 15 to 20 seconds to two to three seconds, a noticeable improvement from the customer’s point of view. Another time-saver is the automated returns system, which processes six items in 20 seconds’ time. Under a manual system, processing six returned items would take more than one minute.
Increasing store-corporate communications bandwidth from 56K to 128K sets the stage for a flexible environment that can scale up to accommodate the additional data traffic that comes with new applications.
“The old technology did not allow much of a two-way communication,” Del Vecchio said.
Gaggion said RBA is evaluating opportunities for educating store staff and the new store technology could provide a platform for delivering corporate communications, human resources information, product and marketing data. He pointed out that RBA is in no hurry to bring too many applications online at once.
“We are taking a ‘soft’ approach. Instead of rushing through and just bombarding the stores with a new system, we realized it isn’t necessary to rush, rush, rush. It’s more important to provide the right solution for the store,” he said.
For example, RBA is considering adding electronic signature capture technology to the POS setup, but that is only a consideration at this point, not part of the rollout plan. Electronic signature capture technology, which RBA may pilot-test this year, records customer signatures digitally for easier storage and retrieval.
Another application that RBA is exploring and could be deployed on the point-of-sale is “clienteling.” Such a system would store customer profiles and purchase histories in a database. With access to this information, staff could better understand customer preferences and serve them more effectively.
Today, the POS and store systems upgrade is focused on the Brooks Brothers chain, Gaggion said. Once complete, RBA will evaluate plans for other divisions.
RFID…In Due Time
No technology conversation is complete without mention of radio frequency identification — and while it’s on Del Vecchio’s radar, there are no plans for implementation anytime soon.
RFID involves tags containing a computer chip and antenna that can be affixed to something as small as an individual garment and as big as a 40-foot shipping container arriving in a port. These tags have the ability to communicate their presence — and other information — in an automated fashion, providing untold visibility of product movement in the supply chain.
For Del Vecchio, the technology looks perhaps more intriguing as a way to deliver a richer shopping experience, although customer privacy issues would need to be addressed.
“Now that we understand the technology better, the benefit to RBA may not be to move product faster, but maybe it’s a way to enhance, from a customer standpoint, the way product is shown, the way information is delivered to the customer about the product,” he said.
For instance, RFID technology could be configured to activate runway footage or product information on a nearby computer screen whenever a shopper removes a garment from a rack. At Prada’s New York Epicenter store, the technology was used in fitting rooms, where RFID-tagged garments triggered computer monitors to display relevant product information such as available colors and coordinating pieces.
For RBA, however, serious consideration of the technology is years away. “We are not desperate for that technology, to be out first,” Del Vecchio said. “It really is an ego trip that we don’t need, and cannot afford.”
Other emerging technologies gaining popularity, such as merchandise optimization software, may play a role, Del Vecchio said, but each must be evaluated based on its own merit, and how well it fits with a particular business model.
Optimization software that employs analytics to guide pricing, promotions and markdown decisions may rely a little too much on science, he said, and not enough on the art and instinct of a good merchant. “I believe there are limits to that [technology] because it is trying to put too much logic behind something that I don’t think is that logical, especially as you get closer to fashion.”
Del Vecchio said optimization software “definitely can help” in guiding decisions, but should not be used to make decisions. That outlook seems to mirror his thinking on the role of most technologies: “You can [use it to] minimize a problem but it becomes a danger when you assume a machine is going to do it all for you.”