Building a Seamless Retail System

Continued

Real-Time Customer Insight

Perry Ellis is in the process of rolling out Oracle Retail Point-of-Sale to its Original Penguin stores and Perry Ellis stores. “We already rolled out store inventory management, and that's working well,” says Paez. “The Oracle Retail Point-of-Sale application we're rolling out will let us have almost a real-time view of the inventory. That will help enable our e-commerce business, since it will give our warehouse a more realistic view of what the inventories are at individual stores.”

Although Perry Ellis' Oracle Retail rollout is still in process, it's already had a noticeable impact. “So far, our deployment of Oracle Retail has created tremendous productivity for our users,” says Paez. “Now they can spend their time focusing only on the exceptions, so they can spend their time where it's really needed.”

For example, approximately half of all of Perry Ellis' replenishment programs are fulfilled by automatic allocations, meaning that its retail system helps decide what needs to be shipped to each store. Instead of being out of stock on popular or fast-selling items, automatic allocations can ensure that each store is fully stocked, without the need for Perry Ellis employees to manually review and order items.

By simply focusing on the exception situations, such as when a store has too much inventory of a given product, rather than managing each individual order, Perry Ellis can provide higher value and faster response for its customers. Based on initial numbers, Perry Ellis expects its new retail software and automatic replenishment capabilities to help increase sales by 15 to 20 percent.

“We're focusing on increased visibility into our inventory levels, so that managers can understand and react to unusual amounts of product at our stores or in our warehouse,” says Paez. “Increasing our visibility and focusing on exceptions is helping us grow our business. Until now, we've had to worry about how many stores we were going to open because our previous software had a lot of limitations and a lack of visibility. Now our management team feels comfortable that we can open more stores without any issues.”

Without the automation provided by Oracle Retail applications, Perry Ellis employees would have to spend more time deciding which products to allocate to which stores, a much more time-consuming (and expensive) process. Now, Perry Ellis can open new stores without necessarily having to increase the staff dedicated to managing the inventory allocation process.

Because it has smaller stores, Perry Ellis doesn't have as much margin for error as a larger store might. “Oracle Retail is a foundation for growth and for taking advantage of what we already have in our store investments, since it allows us to just raise the sales per square footage. It's very important for us, since we don't have 10,000-foot stores,” says Paez. “We have small stores, anywhere from 3,000 to 5,000 square feet, so there's not much room for inventory. Having the right inventory in the right place at the right time becomes critical because we can't have a lot of depth on any SKU.”

Building Brands Across Channels

Because Perry Ellis has a mixture of channels—from its retail stores to its wholesale operation to e-commerce—it needs to be able to fulfill customer demands in a variety of ways. Although it has different systems designed to address these different channels, its inventory information is one of the common threads.

“The advantage of doing both wholesale and retail is that we go through one design season, through one planning season, and everything is done together so we don't have to do things multiple times,” says Paez. “The common system, though, is inventory, so any change in inventory is reflected in all our systems. They get connected through inventory in order to create transparency between our two businesses.”

One of the opportunities for Perry Ellis as it rolls out its new Oracle-based retail platform is to make it easier to help the company's traditional partners, such as large department stores, by becoming an even more effective information expert. By coming to the table with real, proven, quantitative data and analysis about what's selling and where, and with suggestions on pricing adjustments, Perry Ellis can help its partners become more successful at selling products. In effect, Perry Ellis' IT retail infrastructure upgrades are designed to help its customers become more-effective channels for Perry Ellis.

Perry Ellis' goal with its Oracle Retail strategy is to reach every single store to which it sells merchandise. By analyzing sales trends locally by store, the company can make sure its brands are being properly matched to markets. “We're always looking for trends,” says Paez. “We can pay marketing companies to tell us how our brands are doing, but the bottom line is that we have the facts and we like to analyze those facts to see the trends at every location. For example, is there a particular income level or ethnic group that's driving sales trends? We use geographical information systems, statistical software packages—geographic and sales data to find out everything we can to help target inventory and sales.” By using that data and knowledge of the current sales climate, Perry Ellis can help both its retail stores and wholesale partners match the right products to the right locations.