Building a Seamless Retail System

Continued

The company also has aggressive 10 percent annual revenue growth goals. However, like many wholesalers, Perry Ellis has limited control over its key channels. In particular, customers such as large department stores have increasingly turned to private-label sales to increase profits. To continue to expand its branding and retail reach, Perry Ellis needed to streamline and update its retail IT infrastructure. Until recently, Perry Ellis had a series of mature, internally developed retail systems with poor scalability and heavy maintenance costs. It also had limited consumer contact and knowledge due to its traditional focus on wholesale markets. In order to meet its goals, Perry Ellis needed a scalable and more efficient retail solution to support growth of its Perry Ellis and Original Penguin stores as well as an infrastructure that could support acquisitions and dynamic growth.

A Foundation for Growth

At the same time that Perry Ellis was trying to expand its brand and reach out to consumers through new e-commerce and retail outlets, the company was also facing changes in its traditional business. For example, department and chain stores have continued to consolidate, a process that has resulted in reduced sales opportunities for companies like Perry Ellis. In addition, retailers are increasingly relying on suppliers that can provide everything from design expertise to advanced technologies to help increase sales. Lastly, retailers are looking for strong brands to help build differentiation. In order to be successful, Perry Ellis needs to address not only its internal information and retailing needs but these challenges as well.

Perry Ellis also wanted solutions that could help it partner more closely with its traditional retail customers to provide greater customer insight and an improved ability to deliver stronger brand and in-store experiences. It also wanted a foundation for providing consolidated and updated data to its employees to help them identify and proactively react to sales and pricing trends.

“We're seeing both retailers and their suppliers partnering closer than they ever have before by sharing demand information in a bidirectional way,” says Garf. “Retailers are sharing more transaction and consumer information to help manufacturers with their sales and operations planning activities, while suppliers are sharing supply chain event and inventory information to help retailers better understand the status of products and how they're filling the channel.”

The result for Perry Ellis has been a gradual shift over to an IT infrastructure for its retail and wholesale businesses based on Oracle Retail applications, including Oracle Retail Merchandising, Oracle Retail Price Optimization, and Oracle Retail Allocation. By implementing new retail software and processes, the company expects to save more than US$20 million a year.

Perry Ellis' transition from custom applications to packaged applications isn't surprising. “Retailers are moving aggressively toward packaged software applications to manage their operations,” says Garf. “It's a dramatic shift. For the first time ever, according to our research, retailers now have a majority—60 percent—of third-party applications in their portfolio versus homegrown applications. This shift tells us that retailers and vertically integrated manufacturers are looking to packaged applications to run their businesses.”

For companies like Perry Ellis, this shift will open up new opportunities as companies such as Oracle offer ever-broader product lines. “We believe that the next wave of investment by the software community will actually bring together these parts, so that organizations will be able to manage their vertical operations from retail to wholesale to manufacturing,” says Garf.