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Industry News - November 27th, 2009



The Home Depot Reveals IT Transformation Strategy

The Home Depot is transforming its IT and merchandising strategy and is developing a new forecasting tool that feeds into the retailer's centralized automated replenishment system.

According to Frank Blake, Chairman and CEO, The Home Depot, "Our merchandising and IT transformation strategy remain on track." Blake notes that more than 70 percent of the retailer's SKU's are on automated replenishment.

The new system will use multiple forecasting algorithms to help improve the retailer's ability to predict and handle spike sale variations, which will help save hours for associates, improve for customer-facing activities and further improve in-stock rates.

"Our current forecasting system is too manual requiring frequent associate intervention, particularly, to deal with spike sales," says Blake. "When you think about the project and seasonal orientation of our business, that's a significant issue."


Stony Apparel Adds Global Sourcing, PLM and ERP Solution

Stony Apparel, a branded and private label manufacturer of girls and junior apparel, mplements NGC's Global Enterprise System software suite, including e-PLM for Product Lifecycle Management, e-SPS for Global Sourcing & Visibility, and RedHorse ERP for EDI, Customer Order Processing, Inventory Management, Shipping and Financial Accounting.

Stony Apparel selected NGC's software suite to help manage the company's rapid growth, streamline business processes and provide global visibility. Stony sought an "end to end" ERP, PLM and Global Sourcing software solution to transform its design, customer service, production and shipping processes for the hundreds of styles produced each month.

"We needed an integrated system that could tie everything together, and that is why we selected NGC," said Richard Swartz, CFO, Stony Apparel. "The fact that we could receive local implementation support through NGC's West Coast office was also important, as NGC's highly skilled technical professionals can work closely with us to ensure that we receive rapid ROI."


Walmart Improves Efficiency of Packaging Design-to-Print Process

Walmart uses brand management software across its fresh produce, grocery and health and beauty lines to improve the efficiency of its packaging design-to-print process.

The software, from Sun Brand Technologies' Odin, is currently being used by Walmart-owned supermarket Asda. Walmart will use the software to increase the speed-to-market and reduce costs by eliminating duplication, sharing global information online and minimize errors across its project management systems.

Walmart plans to improve its turnaround times using three of Odin's modules: Odin On Time, which reduces delays in the design-to-print process; Odin Sprint, which speeds up the artwork approval process; and Odin Assets, a centralized storage and retrieval system containing images and data.

The software has already been installed across Walmart's Marketside range of fresh produce and its Equate health and beauty portfolio. The retailer now plans to extend its use of the software across all its private brand food, health and beauty ranges.


Golfsmith Uses Workforce Management Solution to Forecast Call Volumes

Golfsmith adds a workforce management solution from GMT Planet in order to precisely forecast call volume. The software digests and analyzes the demand and timing of calls generated by their complete array of catalog drops and other marketing campaigns.

The retailer was once challenged by over-scheduling the number of agents in their contact center at any given time, resulting in overcapacity and unnecessary labor costs - despite dedicating 30+ man-hours each week creating forecasts and schedules on their Excel-based system. Worse, without the ability to accurately forecast call volume on an inter- and intra-day basis, they often found themselves under-staffed. And at those critical times, average time-to-answer rates spiked, as did call abandon rates; in turn, directly translating into a degraded customer experience, lower customer brand loyalty and ultimately lost revenues.

"We pride ourselves not only on providing our customers with the most innovative golf products and the greatest value in the golf retail industry, but also on delivering the most reliable and responsive customer service in the industry," said Kody Sweet, director of guest experience for Golfsmith. "And as our sales and call volumes continued to grow, it became clear to us that we had outgrown our old workforce management systems and processes in our call center and needed to upgrade to a more sophisticated and cost-effective way of accurately forecasting calls and scheduling agents in such a dynamic operating environment if we were to continue to deliver on that promise to our customers."

The retailer's workforce solution precisely forecasts call volume by digesting and analyzing the demand and timing of calls generated by their complete array of catalog drops and other marketing campaigns. By using "campaign forecasting" capabilities, Golfsmith addresses the Herculean challenge of matching supply of agents on an inter- and intra-day basis, with the ever-changing stream of calls generated by their variable pipeline of catalog drops and other promotional/marketing offers.

With GMT, Golfsmith had the ability to forecast call volume and create detailed staffing schedules with a greater degree of accuracy. GMT's solution achieved this degree of accuracy by capturing Golfsmith's historical data, such as expected conversion rates and other key data points.

By walking users step-by- step through a series of questions such as, "How many orders are you expecting this week from X campaign," and analyzing past catalog drop and resulting call patterns, Golfsmith generated their first GMT-enabled forecast based on discrete 15-minute scheduling intervals. In fact, the schedule was so detailed that managers were skeptical that the forecast was accurate, believing that the staffing would be "too lean" and would result in unacceptably high hold time and abandon rates. After much discussion, they decided to go with their manually created staffing plan -- based on years of experience using their previous planning system. At the end of the period, management compared the two forecasts with their actual call logs and were surprised to discover that GMT's projected forecast was in fact, much more accurate than their experience-based forecasts -- providing the first piece of support for the GMT-powered workforce management solution.

Soon, GMT Planet was at the core of their contact center forecasting and scheduling -- driving the creation of precise staffing schedules (accurate out to 12 weeks) based on factors such as predicted call volume by 15- minute intervals, agent schedule availability and skill sets (while also optimizing agent breaks and lunch shifts). And as Golfsmith continued to use GMT Planet, they also reported that the forecasts and reports generated have also grown more and more accurate, as the system captured additional data points from which to calculate forecasts and staffing models with even greater precision.

Golfsmith also decided to add teleworkers (virtual home-based agents) -- a new category of agents in addition to full and part-time staff -- as they expand their operations, as well as deploy the solution in their nationwide network of retail superstores and back office operations.


Saks Uses Advanced Clienteling to Strengthen Customer Relationships

Luxury department store Saks Fifth Avenue enhances the shopping experience through clienteling which have driven a steady improvement in sales.

"We continue to invest in process and technology enhancements that allow our merchants to more efficiently buy and allocate product which should lead to improved inventory productivity," says Ronald Frasch, President and Chief Merchandising Officer, Saks.

"Saks will continue to reinforce clienteling," says Frasch, "in order to strengthen its existing relationships through the improved utilization of its POS and clienteling systems which allows tailored clienteling."

"Once a customer develops a personal relationship with a sales associate or personal shopper, they are more likely to increase their dollar spend and loyalty to Saks," says Frasch. "We are also using our clienteling technology to isolate those customers we haven't seen in awhile to reach out to them directly."

Additionally, Saks is focused on emphasizing training and team-oriented selling and cross-selling. To support this effort, Saks is mining its data to determine which customers may be strong shoppers in certain departments that have not shopped in others.

"Our goal in mining this data is to develop strategies to increase the rate of cross-shopping throughout the store to drive additional share quality," says Frasch. "We are working to build a differentiated and professional service and selling organization enabled to improve processes and technology. We are laser focused in not only retaining existing customers but on acquiring and developing relationships with new ones in several ways."


JCPenney Transforms Marketing Strategy to Better Serve Customers

JCPenney reshapes the way it engages with customers through an integrated marketing approach that incorporates stores, catalogs, online applications and emerging digital marketing platforms, including social media.

The department store unveils it will no longer publish its twice-yearly "big book" catalogs and will dedicate those resources to a range of customized, more timely specialty catalogs, continued targeted growth initiatives on jcp.com and ongoing leading-edge digital media services.

The discontinuation of "big book" catalogs aligns with JCPenney's ongoing commitment to promote the sustainability of forests and other natural resources, and builds upon its legacy of operating in an ethical and socially responsible manner. The Company anticipates a year-over-year reduction of 25 to 30 percent in paper used for catalogs in 2010 - continuing a four-year trend of declining paper consumption.

"To ensure we are keeping pace with consumers' changing media habits and continued migration to online versus catalog shopping, we have increased our investments in new technologies, as well as successfully integrated the merchandising and marketing teams serving stores, jcp.com and catalog into one enterprise-wide team that is able to consistently and seamlessly serve our customers, no matter how they prefer to shop with us," said Myron E. (Mike) Ullman, III, chairman and chief executive officer.

"Part of this transformation is the refocusing of our catalog operation to smaller, more targeted publications, providing us with a strategic opportunity to continue reducing our overall paper consumption and transportation-related environmental impacts. We remain committed to constantly analyzing the impact of our overall environmental footprint and upholding the principles and discipline that have helped sustain and build JCPenney into a trusted brand for over 100 years."

JCPenney's Web site, jcp.com, features more than 250,000 merchandise offerings and millions of opt-in e-mail subscribers. JCPenney also has developed a range of digital marketing initiatives, such as an iPhone application launched this year and presence on social media sites such as Facebook, where JCPenney has so far amassed a following of more than half a million fans.

A roster of specialty catalogs includes a range of home catalogs include "Rooms Babies Love" and the cooks catalogs; the "Little Red Book" publications for women's apparel and accessories and "Matters of Style" for men. Other popular catalogs, including the Christmas catalog, will continue.


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