Could major corporate change at this clothing retailer become the ideal opportunity to transform the business – boosting efficiency, productivity and customer service?
This clothing retailer is performing a head-to-toe renewal of its enterprise applications and business processes, supported by SAP® solutions hosted in the IBM® Cloud™ for SAP Applications.
Customersbuy products every five months, rather than every two years previously
80% risein web traffic
20% savedin management and maintenance by relying on IBM Cloud for SAP Applications
Business challenge story
Seizing a fresh opportunity
When this clothing retailer separated from its parent company, the leadership team saw a chance to step into the future and transform into a leaner, more profitable digital business.
A spokesperson from the retailer explains: “The spin-off from our parent company represented a once-in-a-lifetime opportunity. Rather than rushing to replicate the parent-company systems in a new independent environment, we seized the chance to drop the baggage of legacy systems and processes, and instead kick-start a true digital transformation of our business.
“Our aim was to boost sales and market share by providing a better customer experience on all channels. We decided to target several key areas.
“First, to tailor our marketing efforts, we needed to learn more about our customers and their preferences. Second, to keep shelves stocked and bring great-fitting clothing to market faster, we decided to look for potential efficiencies in our supply chain. Third, we wanted to create a state-of-the-art online shopping experience, so that customers can see vital information such as inventory levels in real time.”
Embracing transformation, the company decided to design integrated, digitalized processes touching all areas of its business. Having agreed a deadline after which it would stop relying on the parent company’s IT systems, the retailer began searching for a new technology platform.
Finding the right fit
After evaluating proposals from several leading vendors, the retailer decided to deploy SAP Customer Activity Repository powered by SAP HANA® and SAP Fashion Management powered by SAP HANA. As a front-end for analysis and reporting, the company selected SAP BusinessObjects™ solutions.
“We involved people from many different parts of our business in the selection of our new technology platform,” recalls the spokesperson. “SAP offered the right fit for our business because the applications gave us a stellar opportunity to tap into the potential of real-time data and reporting."
Once the application landscape was defined, the retailer set out to find the ideal implementation partner – and decided to engage IBM.
The spokesperson recalls: “At first, we worried that a massive global entity like IBM would not be keen to partner with a mid-market company like us, but our concerns were unfounded. IBM stepped up to the opportunity with great enthusiasm, demonstrating full commitment to supporting our transition and devoting a lot of time to understanding our requirements.
“Partnering with IBM felt just like working with a dedicated local company; we could call anytime to ask for advice and assistance. We have a great relationship with IBM, and we were thrilled to be able to take advantage of IBM’s enormous breadth of skills, previous experience and know-how as we embarked on our transformation journey.”
The retailer decided to deploy its new SAP applications in IBM Cloud for SAP Applications avoiding the time and cost of having to build a data center and maintain a large in-house IT team.
The spokesperson continues: “IBM suggested hosting the SAP solutions and some non-SAP applications in the IBM Cloud, and offered round-the-clock, on-site support. Typically, when people think of cloud, they don’t think of service, but IBM overturned that idea by delivering fully managed services to complement its cloud offering. The IBM team worked hard to help us hit key deadlines and keep our transformation program on track.
“The cloud option has worked extremely well for us. We hand off day-to-day administration such as server maintenance, backups and security updates to IBM, so we can focus on our core business: bringing great-fitting, comfortable fashion to shoppers across the globe.”
SAP Fashion Management integrates retail, wholesale, e-commerce and manufacturing to help the company get garments from designers’ desks to shelves quickly and efficiently – a real game-changer. Along the way, SAP Customer Activity Repository gathers data on shopper interactions, helping the company paint a clearer picture of its customers and their preferences.
Striding towards success
Supported by IBM and SAP, the retailer’s transition to a digital-driven enterprise is well underway. The company is turning heads by becoming leaner, more efficient and more competitive.
“Previously, our retail and wholesale divisions ran on separate ERP instances,” explains the spokesperson. “The retail part was treated as a customer of the wholesale division, so it purchased inventory and paid via internal invoices. The separation of the retail and wholesale divisions sometimes led to missed opportunities. For example, if the wholesale division received an order for stock that had already been sold to the retail division, was it more profitable to buy the products back to the wholesale division to fulfill the order? Disentangling stock location, ownership and the costs of intra-company trading was very difficult.
“Now, with SAP Fashion Management, we have a clear view of our retail and wholesale divisions in real time. We can work out which channel is offering a better price at any given time, and prioritize inventory allocations accordingly – without having to waste time and effort on internal transfers between the two divisions. As a result, we achieve better profit margins and save time and effort.”
Real-time inventory information is a big win. Shoppers can already see whether their favorite styles are available online, and will soon be able to check store availability too. The retailer’s B2B clients also stand to benefit.
The spokesperson elaborates: “In the US alone, more than 800 independent retailers sell our clothing. These stores already generate a significant chunk of our revenues, and we felt there was potential for growth.
“Previously, many of these family-run businesses ordered stock by fax or email, based on inventory data that could be up to a week old. If the stock had been sold in the meantime, they faced disappointment and frustration. To make storeowners’ lives easier, we have launched a B2B app based on SAP Hybris® B2B, so they can see precise, up-to-the minute inventory data every time they place an order.”
What’s more, the retailer plans to dig deeper into its sales data, working out which styles are selling best in each store, and accurately forecasting future demand. With these insights, the company aims to keep shelves full of the right styles to tempt shoppers and drive sales.
Thanks to the new SAP Customer Activity Repository delivered via IBM Cloud for SAP Applications, the retailer enjoys real-time views of consumer purchasing patterns. The company is building up a clearer picture of its customers and their preferences, and plans to tailor its marketing messages to suit individual tastes.
As well as tailormade offers, customers stand to benefit from a better experience on the web – with website traffic already up 80 percent. By providing better service, the retailer is boosting sales, with customers buying its garments every five months, rather than every two years previously.
Never resting on its laurels, the retailer is targeting improvements in its supply chain.
“One of the most exciting future capabilities will be to cut our manufacturing time for clothing,” remarks the spokesperson. “Greater insight into consumer behavior and trends will enable us to adapt production and bring new styles to market more quickly. As we become a more nimble business, we can respond faster to fresh trends and fine-tune production to meet actual demand.”
By hosting the SAP solutions in IBM Cloud for SAP Applications, the retailer has avoided the need to establish its own data center, saving 20 percent on management and maintenance. Adopting a cloud strategy has enabled the company to keep the IT department lean and focused on innovative projects.
Equipped with the new offerings from IBM and SAP, the retailer has a bright future ahead.
The spokesperson concludes: “Working on this project with IBM and SAP has helped us transform from a subsidiary of a big brand into a lean, nimble, fully digital company with sky-high aspirations. The IBM and SAP offerings help us to continue to do what we do best – manufacture and sell great-quality clothes – with newfound efficiency and profitability. IBM Cloud for SAP Applications acts as the foundation for our digital transformation.”
About Clothing retailer
This clothing retailer is based in the United States.