Escada

Turn POS Into Data Intelligence

Escada Canada's revamped store systems give executives there a crisp view of past, present, and future sales, inventory, and customer data

Written by Matt Pillar, Integrated Solutions for Retailers, August 2004

The Challenge

Beleaguered by outdated software systems and store hardware and in the midst of the ailing post-Y2K economy, Escada Canada (Toronto) President Joe Caporrella felt he couldn't let the circumstances of the day slow him down. The retail sales slump and his outdated systems were doing their best to temper his company's pace, but that only fueled his determination to keep sales and systems moving forward. But like a fast drive on a foggy road, he couldn't see a darn thing until it was too late to react. Sales figures, inventory measures, the bottom line -- it all passed by him in fuzzy blurs.

Caporrella lacked the vision enabled by real-time systems integration and an executive reporting and analysis tool that presents information such a system produces in one Web-based, graphically presented application."Our old store systems were old and slow, and the information they produced, although accurate, wasn't timely because we were always having polling issues," he says. Because stores were connected via unstable 10-year-old, 2400-baud binary synchronous modems, even the slightest line disruption would cause the polling connection to fail, requiring a complete restart. Polling was so system resource-intensive that it had to be done during off-hours, which meant a dropped connection in the wee hours of the morning would require a restart of the entire process the following evening. Days-old information was therefore the norm.

Consequently, Escada Canada sales associates never trusted the information they saw on their computer screens. When associates attempted merchandise lookups, the system might indicate that another store had an item in stock, but a call to that store would prove otherwise. Expensive and frustrating follow-up calls were therefore always warranted, because sales associates had no faith in the data presented by store systems.

Caporrella illustrates the importance of having access to timely data in the high-fashion retail industry in real-dollar terms. "Our inventory includes such things as $10,000 dresses. We can't afford to hold quantities of that kind of inventory in every single store. But we can't afford to lose a sale for not having a dress in stock in a store where it's wanted, either," he explains. The importance of ensuring the availability of this very expensive garment might be just the beginning of a sale, though. "The $10,000 dress is often one item in a $25,000 purchase. If our customer can't get that dress, she might not buy the $15,000 in accessories like shoes and a handbag to go with it," he says.

Do Your Apps Fit Your Enterprise?

Caporrella is quick to point out, however, that the problems his company encountered with the old software were primarily a result of the retailer's hesitance to upgrade, not due to issues with the software itself. "Our hardware wasn't even being supported anymore. For instance, it was very difficult to get 10-year-old, 2400-baud modems for these things," he says. "We reached the end of the road on our store systems in 2000, but we stayed there for another three years because of the ailing economy." While its problems could mostly be attributed to its reluctance to upgrade systems, Caporrella says Escada Canada chose not to rebuild its store systems with the same software vendor because the software systems it sold were geared for a much bigger retail operation. With seven stores, twelve registers, and one back office, Caporrella says the excessive power -- and cost -- of a software system designed to run 1,000+ store chains was cumbersome for a small enterprise. "Our old vendor's market price and maintenance plans were quite expensive, and we were a very small client to them. We were an old client, and a good client, but a small client." Caporrella feels the service he received from the vendor suffered as a result. "Over the years, we had some poor service experiences that remained fresh in our minds, especially as the system aged. When it came time to upgrade, those experiences prompted us to look elsewhere."

WAN Facilitates Real-Time Data Sharing, Beats Fraud

But looking elsewhere was easier said than done. In high-fashion retail, the combination of seasonal collections, low inventory, high merchandise price points, and an ultra-targeted customer base demands special attributes in store systems. The retailer found its match in Raymark's (Montreal) Xpert series of store systems software. "Raymark features flexible POS, inventory, and management systems that accommodate a constantly changing, seasonal merchandise mix," says Caporrella. Specifically, he says it’s Windows and Internet-based, touch screen POS interface, which runs on the DigiPoS (Burlington, Ontario) Millennium touch screen monitor, makes it easy for sales associates to pick up, learn, and accept. "Acceptance is key. If associates are not going to accept a system, they are going to resist it," says Caporrella. "If they resist it, they won't ring sales, and if they won't ring sales, go ahead and shut your doors."

While the implementation of the Raymark-DigiPoS installation was slated for 16 weeks, store-to-store networking issues pushed the actual go-live date back by a couple of weeks. As many retailers in the same situation have learned, real-time data is only as valuable as the integrity of the WAN (wide area network) you have in place to deliver it. In Escada Canada's case, not all of its stores had dedicated Web connections, and the company felt that its software investment would fall short of its worth if deployed across a less-than-suitable network. After taking a step back to analyze the situation, the company invested in a WAN comprising DSL (digital subscriber line), cable, and where neither of those options were available, ISDN (integrated services digital network) lines to link its 19 points of connectivity.

With the new store systems software package optimized by a high-bandwidth network, Escada Canada gets updated sales, purchase history, and customer data distributed to the entire organization in real time. Caporrella says this allows his administrative staff to take physical inventory counts more quickly and accurately, for one thing. He also notes that real-time data sharing reduces fraud. "In situations where a retailer has multiple stores in the same city, a lack of real-time data sharing means fraudsters can use applied store credit in multiple stores before the system catches on, because data is not updated and distributed fast enough," he explains. "Because our system distributes information in real time, sales associates know that inventory and customer history data is accurate. They needn't make long-distance verification calls any longer, so we're also saving on telecommunication costs," he says. "The process of confirming the accuracy of data is more efficient because we know we can rely on the integrity of information in the system."

Real-Time Data Bolsters Reporting, CRM

Prior to the upgrade, Escada was forced to maintain separate systems for its wholesale and retail divisions. This scenario didn't play into the retailer's plan to increase focus on its own Escada-branded retail stores while still servicing its wholesale partners. In Canada, Escada's sales are 90% retail and 10% wholesale. Not surprisingly, the company made consolidation of these databases a necessary component of the upgrade. "The two separate systems for the retail and wholesale divisions of the company included two inventory databases. We wanted inventory planning and buying, wholesale and retail operations, and CRM [customer relationship management] to run on one system and pull live data from one database," says Caporrella. Accomplishing this would help the retailer achieve two important objectives -- improving its customer-facing CRM efforts and redefining its executive reporting structure.

The newfound ability to access fresh information from a central database justified Escada Canada's decision to focus on CRM and reporting improvements. "CRM is about bringing in a sale, then taking care of that customer and knowing her purchase history for however long we choose. That purchase history information -- right down to color and size -- had to be available to our salespeople in the blink of an eye," Caporrella says. When your customers are routinely spending thousands on the garments you sell, they expect your knowledge of their tastes and purchases to be nothing less than intimate and up-to-date. They also expect to get what they want, when they want it. An enterprise-wide, real-time view of data allows Escada Canada sales representatives to locate inventory like the aforementioned $10,000 dress in another store or warehouse and have it delivered to the customer immediately. Caporrella says the fact that Raymark's CRM module is based on a Microsoft SQL (structured query language) product and that the company is Microsoft certified factored into his decision to select the vendor.

When it came time to choose which executive reports it would run from the hundreds of standard reports offered by Raymark, Escada Canada used the opportunity to figure out what its true reporting needs were. "While we all knew there would be three or four reports we would definitely want to reproduce, I specifically asked the installation team to avoid choosing the same reports we had been producing with the previous system," explains Caporrella. "We made the users yell and scream for what they really needed. This helped us determine what was really important. We analyzed the need for each report by answering questions like, 'Is that report important? How do we use it? What do we need in it? How often do we need it?'" After trashing unnecessary reports, improving the standard ones, and adding a few that rose to the top of the requirement list, Escada Canada found that it had eliminated some 70% of the reports it once generated but could not find value in keeping. Raymark's reporting package, dubbed XEIS (executive information system), also enables ad hoc reporting, which Caporrella lauds. "I simply asked for an icon on my desktop that would lead me to an application that would guide the creation of my own reports. While I want and use the standard reports, if there's a special issue, I want fast and accurate point-and-click ad hoc reporting." For instance, he recently took a call from a store manager who claimed his ratio of tops to bottoms was way off. Caporrella was able to run an ad hoc report while on the phone with the manager, which gave him visibility of the perceived problem. The ensuing merchandising advice he was able to give the store manager solved the challenge.

This kind of sales trend and merchandise reporting is a constant at Escada Canada, and it allows the retailer to make marketing decisions in response to sales demand on a store-to-store basis. "Unlike many clothing retailers, because our collections are seasonal, we don't operate in an open-to-buy environment. We buy four times per year based on the season. That makes mid-season merchandising strategy all the more important," he says. For instance, while individual Escada Canada stores can't necessarily order new or different inventory mid-season, merchandising efforts can be tweaked to spur sales of specific in-stock items. XEIS' browser-based, GUI (graphical user interface) helps merchandisers generate the reports that facilitate this kind of decision making from anywhere in the network.

With totally revamped store systems, an ever-strengthening economy, and some slick, real-time executive reporting tools, Caporrella and Escada Canada have cut through the fog that clouded their vision a couple of years ago. As more of the Escada Group's divisions consider a similar store systems configuration, the high-fashion powerhouse will no doubt be shifting global store operations into a gear that's more suitable for the clear line-of-sight it's achieving.

Store Systems Software Delivered In Style

Joe Caporrella, president of Escada Canada (Toronto), is concerned about style. That shouldn't come as a surprise, considering he leads a division of the $723 million international high-fashion force known as the Escada Group. But while the products his stores sell may boast flair and frills, Caporrella draws the line at store systems. When it comes to IT, he puts function before form. He says that's why he chose a "feature-rich, yet no-customization-necessary store systems software package" called Xpert Series from Raymark (Montreal). "We started searching for store systems with the attitude that we did not want any customization, because the minute you customize software, you're dependent on a vendor for maintenance," he says. "If Raymark is maintaining several versions of Xpert, every time there's an enhancement, something's likely to get missed. That's why we chose them - they have one basic version of their software."

Raymark's modular architecture has hundreds of features that can be turned on or off to suit the retailer's needs, reducing the need for custom development. If a Raymark client wants a customization and the vendor thinks it's worthy of sharing with other retailers, it gets built into the product and becomes an available module to anyone who wants it. As a matter of fact, when Escada Canada decided during the conversion process to keep its old method of sales commission calculation, Raymark created the module and added it to the existing sales commission calculation modules already offered by the Xpert portfolio.

The modular approach fits the retailer's ever-changing merchandise mix, but it's not the only Raymark feature Caporrella likes to talk about. The vendor's Xpert Executive Information System (XEIS) is a reporting tool, and it's the feature Caporrella likes most. XEIS allows users to create, modify, and customize reports to fit their needs. The application extracts information from a central Microsoft SQL (structured query language) database and allows reporting on any aspect of a company's operations in various file formats. Also included in XEIS is a scheduler for automatic report generation, a personalized dashboard for each user, and role-based security for built-in control of sensitive information.

POS Hardware: The Conduit Of Systems Data

You wouldn't trust a second-rate fulfillment company with run-down trucks and bad drivers to deliver inventory to your stores on time, would you? Consider the impression left on observers if the shipment makes it there at all. As beat-up packages are unloaded from a sputtering, exhaust-spewing lemon, anyone standing within sight or earshot wonders just how much you really value your product to entrust it to such incapable hands.

Now take a good look at your POS hardware. Is it the IT version of that run-down delivery company you'd never hire? Are your associates embarrassed to interact with poorly performing and outdated hardware as they ring up sales? Worse, are you not realizing the full power of your store systems software investments due to rickety, crash-prone POS units?

Chances are, your hardware investment is one driven by function over form. But for high-end fashion retailer Escada Canada, function only slightly outweighs form in the hardware decision-making process. That's why, when the retailer beefed up its store software systems in 2003, it did the same to its hardware platform, trashing its bulky, wire-laden PCs with an upgrade to all-in-one, flat screen touch monitors from DigiPoS (Burlington, Ontario). Caporrella says his company was first impressed by the physical presence of the hardware. "The unit is a retail-hardened PC, but it's very stylish," he says. "A single cable provides both networking and power, for instance, eliminating the ugliness of multi-wired connectivity. We were first attracted to the unit for its clean look, but the demonstration of its functionality closed the deal. It's tough, and that's important. If the chance exists for hardware to break, a sales associate will find the way to break it."

About Escada

Escada is an international luxury group retailer specializing in women's designer fashions. Headquartered in Germany, they have pursued a course of steady expansion since its founding in 1976 by Margaretha and Wolfgang Ley and today have nearly 440 shops and corners in more than 60 countries. ESCADA's core business includes ESCADA Collection (including Couture), ESCADA Sport and ESCADA Accessories and Licenses (glasses, perfume, scarves and ties, lingerie and a diamond jewelry collection).