Pendleton Embraces Multi-Channel Approach

Apparel Magazine - By upgrading and integrating the systems behind its e-commerce, catalog and store channels, Pendleton Woolen Mills has improved customer service and achieved a much clearer real-time picture of sales and demand.

 

With robust growth in its catalog and e-commerce businesses outstripping internal capacities, Pendleton Woolen Mills in 2004 saw a need to further integrate its consumer direct channels.

 

The firm has a sizeable wholesale business selling to independent retailers, outdoor specialty stores and select department stores. However, its consumer-direct business has grown to include more than 50 retail stores as well as a direct-mail catalog and e-commerce.

 

The catalog was launched in 2000, following the web site's debut in 1996, but the two divisions were operating under separate operating systems, which created many inefficiencies.

 

“There was a lot of redundant work, including the setup of item data as well as re-keying all of our inbound web orders into the catalog systems,” says Peter Bishop, division catalog manager. “Obviously, you can only do this up to a certain point of volume, and then it just becomes ridiculously expensive and inefficient. It was also fraught with errors between channels and inconsistencies in data between channels, which effectively resulted in customer service miscues.”

 

These inconsistencies included not only inefficiencies in inventory allocation, but also price discrepancies between items in the catalog and on the web site.

 

“There was a lot of data to manually update and keep in sync. We generally did a pretty good job, but it only takes a few mistakes to irritate a lot of people,” says Bishop.

 

Moreover, there was no automation to share data between the catalog system and Pendleton's retail stores.

 

Finding a fix

In January 2005, Pendleton overhauled its catalog system with the implementation of CommercialWare's CW Direct suite. Then in June 2005, the company relaunched its web site with the aid of MarketLive.

 

The system upgrades gave Pendleton a single database for housing item information across its web and catalog divisions, as well as a real-time view of inventory across all its consumer-direct channels, including its own retail stores. This led to immediate efficiencies in workflow at the firm's call center and better customer follow-up, Bishop says.

 

“The benefits shine through when you walk into our Portland call center during the holiday season and you see a lot of happy folks,” says Bishop. “They're not the stressed-out harried individuals that they were three years ago. It's a smooth operation, and it makes for a much happier work force.”

 

The quality of inventory data also has been greatly improved under the new IT infrastructure, he notes. For instance, the former system wasn't able to capture stock-outs or cancelled orders, and that made it difficult to measure gross demand.

 

“We really could not accurately construct a profit/loss statement on a given catalog,” says Bishop. “There were always a certain amount of extrapolating and assumptions that had to be made. It was also difficult to split out even the transactional data effectively across separate orders since we didn't know what the return rate was from one offer to another. And that data is really so elementary to the business.”

 

Better insight into its sales data is helping Pendleton project inventory stocks in the future and project future season initial purchases.

 

The brick-and-mortar connection

The final step of the system's upgrade was integrating the web/catalog systems with its brick-and-mortar retail network. Working with CommercialWare and its retail POS vendor, Retail Pro (Island Pacific), Pendleton developed an application that automatically checks for items at its stores if they're not in Pendleton's catalog/web inventory or due into that inventory according to a purchase order. Previously, call center associates would call individual stores to hunt down missing items.

 

“It would require multiple phone calls back and forth between call center personnel and store personnel to fulfill a single order,” says Bishop.

 

One particularly negative result from this older process was that it took store associates away from helping customers on the selling floor. With the new automated process, a virtual warehouse receives data daily on the aggregated inventory of Pendleton's stores. If an item is located at a store but not in the web/catalog inventory, pick tickets for the online/catalog orders are transmitted electronically at night to that store, and the order is filled by store associates as part of their morning routine.

 

“They pick the inventory off the shelves, box it up, and they're done with all of that well in advance of the time they open the store for business,” says Bishop.

 

Pendleton has the ability to turn off the retail warehouse system for certain items that the stores may want to keep in stock, or even turn off the whole virtual warehouse system during peak holiday selling periods. He also notes that busier selling times make it harder to meet the promise of next-day delivery under the system.

 

“It's not without some challenges and drawbacks,” adds Bishop. “But in total, we think it's an advantage because it allows us to fill current customer demand to its fullest.” As a result, Pendleton is seeing improved order fill rates and fewer mistakes in customer service while offering customers a more dynamic online shopping experience through MarketLive, he says.

 

“It's a prettier web site,” says Bishop. “It has much more selling and merchandising features. It's easier to navigate. The checkout process is smoother. So that's a huge improvement versus what we had.”

 

What's next?

The next step in integrating Pendleton's multiple channels is getting better information on its customers across channels, including its wholesale accounts.

 

“We have yet to really take it to the next level in gaining a single view of the customer and really being able to measure lifetime value across channels to make sure we're properly spending our marketing dollars on those segments that are most responsive and profitable across channels,” says Bishop.

 

Ultimately, Pendleton plans to look for more of an enterprise solution to better integrate the consumer-direct side of its business with its wholesale business in terms of measuring inventory and sharing data. Bishop notes that the expansion of the catalog already helps its internal design and production teams in assessing market trends.

 

“To the extent that this system gives us timely, actionable data, we share that information on just about a daily basis with the merchants who are developing the product,” he says.

 

Further enhancements in measuring sell-through and assessing consumer information will help Pendleton grow in all of its channels. “We get such a quick read of market demand when we go out with a full-blown catalog drop,” says Bishop.

 

“We get a lot of data coming back at us very quickly, and we're able to distill it and share it with the people that can use it in terms of developing future seasons. A very important part of what the catalog does here at Pendleton is just providing market intelligence for the wholesale channels — not just to benefit back to the catalog but to also benefit the brand overall.”