The retail landscape has changed drastically since The Children's Place opened its doors 25 years ago. In addition to competing with other specialty brick-and-mortar retailers, the company faces stiff competition from online retailers and ecommerce giants like Amazon.
Customers also expect a seamless experience as they move between channels and will quickly switch to another retailer if they can't find what they're looking for. Implementing a strategy for inventory allocation, replenishment, and price optimization is crucial for The Children's Place, which operates more than 1,100 stores in the U.S. and Canada. 1to1 Media spoke with The Children's Place Chief Information Officer Manish Maini and Robert Bailey, director at Deloitte Consulting, about The Children's Place's strategy for streamlining its inventory and providing better services.
1to1 Media: What challenges are you trying to solve to better serve your customers?
Manish Maini: One of the challenges we have is figuring out how to better leverage our inventory and optimize it within our stores. We're also working on improving our multichannel capabilities. To do all that, we had to first fix our back-office operations. We were previously using a legacy mainframe system that made it difficult to get a 360-degree view of the customer since we had to pull data from multiple places. SAP is helping us organize our data in one place and make it easier to use.
What SAP solutions are you using for retail and does SAP also power your CRM system?
MM: We're using SAP's FICO [finance (FI) and controlling (CO) modules of SAP's ERP system] and IS-Retail platforms. Our CRM system was built in-house and we use it with [IBM] Cognos Business Intelligence.
How are you measuring your progress and what results have you seen so far?
Robert Bailey: We helped The Children's Place deploy the SAP solutions about 5 months ago, so it's too early to report the results, but we're watching for trends in sales, such as an increase in pre-season merchandise sales versus merchandise from post-season markdowns as we improve the management of our inventory.
There have been a lot of discussions about IT and marketing working closer together. How are you collaborating with your marketing department?
MM: We have a chief transformation officer [Jason McAndrew] who helped create the roadmap for aligning projects within our organization, so we have several processes in place where we're working with other departments like marketing on new initiatives.
Can you give me an example of how these collaborations will impact the upcoming holiday season?
MM: Well, we recently collaborated on redesigning our ecommerce platform which, on the backend, gives us enhanced visibility into our customers' behaviors and we're optimizing our prices and promotions. For example, we'll be offering different promotions by the hour, which is new for us, and also promotions specific to certain stores.
What's next? What technologies are you experimenting with?
MM: We're looking into new solutions, like beacon technology, which we're experimenting with right now. Basically, we're continuing to look for ways to drive more transactions online and in-stores and also tools for getting more visibility into those areas and connecting [customers to the merchandise].
Editor's note: Philip Saltzbart of Deloitte Consulting was incorrectly named as a source in a previous version of this article. The individual's correct name isRobert Bailey, director at Deloitte Consulting.