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Industry News - September 11th, 2009



Borders Reduces Store Inventory by 50%

Border is in the best shape possible to drive sales in the back half of the year due to a reduction in store inventory and an ongoing store redesign according to Ron Marshall, CEO of Borders. "The company executed on an aggressive set of initiatives to reset virtually every one of our stores, says Marshall."

For example, certain categories such as music, DVD and newsstand have been hit particularly hard, therefore Borders has scaled back tremendously on its multi-media business, music and DVD. It has reduced store inventory by $150 million of retail which is approximately 50 percent less than last year. Additionally, unproductive inventory has been moved through heavy promotional discounting.

Borders also announced that it has completely revamped its children's section, increasing square footage by 20 percent. Borders doubled its SKU count in toys and games with a focus on educational, creative and imagination sparking items from brands such as Lego, Play mobile, Alex, and Scientific Explorer.

Borders also is developing a "store within a store" geared towards young adults. The store is stocked with young adult titles, graphic novels and related non book items. The company is actively using social media and unique in-store events as part of our outreach to teens.

"Everything we did in the second quarter to address these opportunities and challenges was absolutely necessary, but disrupted our stores as we moved categories, expanded sections, shipped out fixtures and replaced inventory," says Marshall. "The important thing is that our stores today are better positioned now than they were a year ago to drive sales in the critical quarters to come."


Price Chopper Synchronizes Yard and Dock Activities

Price Chopper synchronizes yard and dock activities at its distribution centers with.
Retalix Yard Management. Retalix Yard Management is designed to automate the yard and dock management process through predictive logic and optimization algorithms. Using enhanced software engines and visibility tools, RYM helps eliminate operational silos and coordinates yard and dock activity with distribution center demand.

"The Retalix Yard Management system was very attractive because it offered unmatched and real-time control over all yard and dock operations in our distribution centers," said Dave Schmitz, director of distribution for Price Chopper. "The solution will help us quickly locate equipment, personnel and products anywhere in our yard, and will greatly reduce trailer wait times -  all of which means higher supply chain visibility, efficiency and productivity."

Price Chopper will use radio frequency identification (RFID) technology in tandem with the Retalix solution. RFID readers are being installed at the entry and exit points of the company's distribution centers, and all of its fleet will be affixed with a rugged RFID tag, automating the processing of arrival and departure information.

RYM was designed using the Microsoft .NET platform. The application is part of the Retalix Transportation solutions suite, which is designed to fulfill transportation requirements of inbound and outbound traffic, yard management and dock scheduling for retailers and distributors. Additional offerings include Retalix Transportation Optimization, which provides freight management for planning, optimization, procurement, execution, settlement, visibility and supplier control; and Retalix Dock Scheduling, which facilitates dock appointment scheduling via the Web, predicts labor demands, optimizes dock resources and streamlines the flow of goods through the distribution center.


Juicy Couture Launches Web 2.0 Community, Boosts Conversion Rates by 162%

Juicy Couture leverages unique Web 2.0 community features on JuicyCouture.com and now directs its shoppers to Club Couture, an exclusive online portal that contains social shopping elements.

These shopping elements includes:

- Create a Look - Shoppers can mix and match outfits and accessories in a virtual dressing room and browse through "looks" created by other members 

- Rate My Juicy - Shoppers are encouraged to upload photos of themselves in their favorite Juicy looks, sharing how they "do Juicy" with the rest of the community

The brand has implemented CTS/SOCIAL platform, part of CREATETHE GROUP'S digital commerce software platform. Since implementing CTS/SOCIAL, Juicy Couture has experienced a 162 percent increase in conversion rates, 141 percent increase in page views per visit and a 150 percent increase in the average time spent on their site.

"It's important for Juicy Couture to have a central hub where our customers can interact with each other, as well as members of our Juicy team," says Frances Pennington, VP of Global Marketing at Juicy Couture. "We've seen a significant increase in traffic and repeat visitors since implementing social shopping and believe that this community atmosphere has been integral in bringing the fun, Juicy shopping experience online."


Boycott Whole Foods on Facebook Begins to Lose Steam

After shooting up to 33,200 members in just three weeks, Boycott Whole Foods on Facebook has only picked up 1,000 members in the past week and is beginning to trail off. Nevertheless, the current group is a sizeable chunk compared to the Do Not Boycott Whole Foods which stands at 4,300 members.

While 33,200 may not appear to be a lot of protesters compared to the millions that shop at Whole Foods, the backlash the retailer now faces in a media hurricane (social and otherwise) of Mackey's own making and it is highly likely that the brand's reputation has been tarnished in the short-term. Mackey's controversial statements have spread like wildfire throughout popular social media Web Sites including Facebook and Twitter as well as across major media outlets in a span of just a few short weeks.

Mackey's comments and the social media aftermath is a lesson that all retailers must pay attention to the power of social media and what is being said about their brand. Whole Foods depends on the good will of its customers and the social media uproar indicates it has taken a hit. In time, Whole Foods can and probably will recover, but social media sites clearly have delivered a big punch.

The Boycott Whole Foods Facebook page launched on August 13th, just a day after John Mackey, CEO and co-founder of Whole Foods had controversial remarks appear in a Wall Street Journal op-ed piece. The Facebook page currently stands at 33,200 members.


DemandTec Signs Business with Price Chopper, Ahold, RadioShack

DemandTec offers insights into its next-gen solutions for retailers and announced several key client wins including Price Chopper, Ahold USA and RadioShack in its first quarter earnings call.

DemandTec's next-gen solutions combine category, brand, and shopper insights into one system that provides a unified understanding of shopper behavior and the ability to leverage those insights to make better business decisions on pricing, promotion, assortment, and collaborations with their trading partners.

According to Dan Fishback, DemandTec's President and CEO, the company's next-gen approach helps retailers stop treating shoppers as statistical averages. Instead, they leverage the digital footprints and the data they already collect from every shopper interaction, and provide DemandTec science to create actionable insights in an on-demand offering. Several client wins that DemandTec announced in its first quarter include:

Golub Corporation: Price Chopper Supermarkets, which operates 116 supermarkets in the northeast United States, selected DemandTec's life cycle price optimization solution, which includes everyday price management and everyday price optimization software services in the first quarter.

Ahold USA: The grocer plans to expand their use of DemandTec's next generation solutions across all their retail banners in the United States, including Stop & Shop and Giant Food Stores. DemandTec's next-gen solutions will help Ahold USA leverage category, brand, and shopper insight and execute merchandising and marketing strategies by anticipating the needs of the customers they serve.

RadioShack: Consumer electronics retailer, which has been a DemandTec customer since 2003, renewed its agreement for next-gen software services that allow for merchandising and marketing optimization solutions that can help better understand, attract, and serve their customers.

Additionally, with the acquisition of Connect3, DemandTec has renewed maintenance agreements with certain former Connect3 customers. Several retailers renewed their advertising and marketing execution or AME software maintenance agreement with DemandTec as the company develops its end-to-end promotion management solution.


BJ's: Four Ways to Improve Operational Efficiencies

BJ's outlines four ways it is improving operational efficiencies in its most recent financial quarter. According to Laura Sen, President and Chief Operating Officer of BJ's, the retailer is committed to the following:

1. BJ's continues to build proficiency in its processes for ordering and replenishing perishable foods. Presentations have improved significantly and BJ's has reduced shrink and salvage, resulting in better freshness for its members every day.

2. The loss prevention team achieves a substantial savings in shrink reserves during the first half through the implementation of new processes and procedures. BJ's already has one of the lowest shrink levels in retail, less than 25 basis points of net sales, and the company's loss prevention team achieved similar results in last year's first half.

3. The company improves operational efficiencies in distribution by completing the implementation of a new warehouse management system in its Jacksonville, Florida distribution center. The new system, which is now fully operational at all three distribution centers, helps the company accelerate inventory flow to the clubs and gives better visibility of inventory.

4. BJ's transitioned to a new data center provider with a selection of Witpro Technologies as its business processing partner. The relationship will allow BJ's to leverage Witpro's global infrastructure management experience and IT best practices.

Total sales in the company's fiscal second quarter decreases 5.2 percent to $2.51 billion, compared to $2.64 billion last year. However, BJ's remains focused on chain expansion, which Sen says is key to the company's growth strategy. BJ's plans to open as many as seven new clubs this year.

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