F. Curtis Barry & Company » State of the Industry

Is The Economy Recovering Happening For Your Business?

Paul Sobota — Fri, 05 Mar 2010 18:41:41 +0000

In a recent NRF SmartBrief, daily newsletter, it reported that “Retailers cautiously optimistic as sales beat expectations”… “It’s safe to say the worst is over for most retailers. And particularly for those outside the home goods area, the tide is turning,” said economist Frank Badillo. “We’re seeing consumers continuing to spend, in much the same way they did in November, December and January, with an increase in demand for apparel and smaller-ticket items.” You can find the full article with this link: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=122992

While this may be true for some of the big retailers, what do you see when you visit local sole proprietor businesses in your community? Are they seeing a radical change in both traffic and sales in their establishments, that they feel the economy has now turned around? Has the economic recovery happened to you? The recovery is only over for your business when you see it in your sales and your paychecks.

Paul Sobota is vice president of F. Curtis Barry & Company, a warehouse, systems, and inventory consulting firm with a focus on catalog, eCommerce, retail, wholesale, and manufacturing; Learn more online at: http://www.fcbco.com

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UPDATE: Virginia House Kills “Amazon” Law

Curt Barry — Wed, 03 Mar 2010 15:13:28 +0000

Senate Bill 660, introduced by Sen. Emmett W. Hanger Jr. (Augusta County), was officially defeated yesterday by the Virginia House of Delegates Finance Committee. Senate Bill 660 would have created a new nexus standard to require certain Internet retailers to collect Virginia sales tax from its Virginia customers even if the retailer is not physically located in Virginia. The House Finance Committee adopted a subcommittee’s recommendation to lay Senate Bill 660 on the table, which effectively ends the bill’s chances of passing in this session of the General Assembly. However, the provisions of Senate Bill 660 are still present in the Senate’s version of the budget for the next biennium. To be adopted, the House of Delegates would have to concur with its inclusion in the budget.

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Micros-RETAIL in 2009

Paul Sobota — Wed, 24 Feb 2010 16:00:11 +0000

In our continuing series of highlighting the positive aspects of 2009, I had a recent conversation with Chris Sarne, Regional Vice President of Sales for Micros-RETAIL and he shared the following insights to their successes in 2009.

Chris had the following insights regarding Micros-RETAIL for this past holiday season. Many of Micros-RETAIL’s clients had great success from Black Friday to Cyber Monday and that tremendous performance continued throughout the holiday season, with performance up over last year by as much as 70%.

Although Chris could not elaborate specifically on which clients, because of confidentially reasons, a number of these clients experienced:

Re-platform resulted in 5x the total online sales
Re-platform resulted in 76% increase in sales from 2008 to 2009
70% increase in sales after checkout redesign
47.9 % increase in total online revenue post re-platform
13% increase in AOV after site merchandising redesign
Re-platform resulted in 8x revenue increase in 12 months
Re-platform resulted in increase from $4M/day to $8M/day within 12 months
Revenue is 15% above plan after re-platform
20% of total business is online, fully integrated Micros-RETAIL-built Gift Registry Solution is 45% of those sales
Year over year sales are up 40% post re-platform
Year to year revenue up 30% in first quarter post re-platform

Chris also expressed that other divisions of Micros-RETAIL had similar customer experiences with their other software application suites last year. One additional item that Chris did elaborate on was the new Serenade product release 2.5 which was just release at the end of January. Some of the features in this release include:

Pre-Order Quote Processing
Customer Item History screen – provides customer service representatives a more efficient way to view items that a customer has previously ordered
Credit card security enhancements – Ability to purge / replace credit card data and retain the order
Ability to fulfill backorders from retail store inventory using integration with MICROS’s Locate Order Broker
Membership cancellation emails – A base membership cancellation HTML email template has been provided that you can use as-is or as a starting point to create your own HTML email template
Ability to email purchase order form as an attachment
Warehouse Receiving using wireless / hand-held devices
Physical Inventory count entry using wireless / hand-held devices
Updated online user help and other reference manuals

Chris also stated that in FY’09 they added more than 50 new customers across the Micros-Retail brands. Pretty impressive for a down economy!

Paul Sobota is vice president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com

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Escalate Retail’s 2009 Highlights

Paul Sobota — Wed, 10 Feb 2010 16:00:00 +0000

In our continuing series of highlighting the positive aspects of 2009 I had a recent conversation with Brian Johnson, Vice President and General Manager for Escalate Retail and he shared the following insights to their successes in 2009.

With Escalate Retail’s release of Ecometry Commerce Suite version 10.0.4 last December, customers now have PCI certified PA-DSS compliant payment application. This certification is extremely timely as starting July 2010; the PCI Council (comprised of the five largest credit card brands) will require retailers to use a PA-DSS compliant payment application. Multichannel and direct marketers that are looking for a compliant application to manage and fulfill orders across one or many channels can be assured that this latest Ecometry release is PA-DSS compliant. In addition, this release also included:

Advanced Non-Offer Promotional Capabilities
New User-Based Fraud Monitoring
Intelligent Promotional Insert Functionality

Brian elaborated on 2009 and stated that Escalate Retail had the best financial performance (both as a percent and in dollars) and the strongest end-of-year cash balance in the history of the company.

Brian went on to say that in the last quarter of 2009 Escalate Retail had the strongest new written sales quarter in over two years and they added several new “logos” in 2009; implementing 15 new customers on the open systems platform.

In addition Brian stated that he has heard from many of their customers that they were above plan for 2009 – and almost all are predicting modest growth in 2010.

Additionally, here are a few of Escalate Retail’s upcoming releases for 2010:

10.1.1 – April/May 2010

Settlement file auditing
Lexis/Nexus external fraud integration
Improved package checking station management

11.0.1 – 3rd Qtr 2010

COBOL.net / phase I – which provides access to Microsoft tools and other advanced technology
New Credit Card Reverse Authorization and Partial Authorization options (required by Visa/MasterCard)
Enhanced Accounting Functionality around Three-Way Invoice Matching and Costing management

All in all Escalate Retail and most of their customers experienced a better 2009 than you would have thought possible.

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Diverse Targets For Warehouse Cost Reduction

Bob Betke — Mon, 08 Feb 2010 21:51:35 +0000

I recently took a step back and tried to determine what type of company would use our warehouse consulting services. We try to help businesses with their warehousing needs by providing a variety of consulting services. Our goal is to help businesses cope with these challenging economic times by making recommendations for controlling their operating costs. My focus was on developing a list of potential businesses that might need assistance. In the past, our client base consisted of the companies you would traditionally think of as direct to customer and business to business entities. I thought a good place to start would be to research recent past warehousing clients.

A sample of the large variety of recent businesses that used us to help in their warehouse operation or requested information on our consulting service offerings looks like this:

One of the world’s largest pharmaceutical companies used us to help strategize on the fulfillment of their sales and collateral materials.
A government- run laboratory that manages the operation of a particle accelerator needed help organizing their five storage facilities and the storage of parts and equipment used in experiments and maintaining their accelerator.
A restaurant supply company that manufactured, among other things, pizza trays and dish covers wanted assistance in refining their fulfillment operation.
A manufacturer/packager of nuts is looking for a way to increase storage capacity.
A large state-run university is looking for help in consolidating their storage facilities.
A campus and online medical college needed assistance in finding an outsourced partner to fulfill orders for textbooks for correspondence courses.
A regional hospital is redefining the use of their warehouse and is looking for layout help.
A large third party logistics company is looking for “best practice” implementation in their warehouses supplying “Just In Time” computer components.
A multichannel company providing supplies to the pet industry and groomers is moving to a larger facility.
A book publisher asked for help in improving their warehouse operation and inventory control processes.

I started looking for one common denominator between all of these businesses and quickly realized what it was — that most businesses in the country have some connection to a warehousing function and overall supply chain issues. Since most of these, if not all of these, companies face similar issues; it would seem that we all need to focus on finding ways to reduce costs.

In the past, most of our emphasis to reduce supply chain costs was with those multichannel companies that we traditionally considered as “major” players with warehouse and supply chain issues. We now realize that there are a significant number of “non-traditional” businesses as well that impact or are impacted by the costs of their supply chain.

I think my takeaway from this revelation is that – if we want to help improve the supply chain in the US, as well as address the current economic issues facing businesses – F. Curtis Barry & Company needs to look at almost every company and industry in the US to see how we might increase efficiency and reduce costs in the warehouse. No matter what industry you are in, it should be in all of our best interests to look for ways to lower costs and improve service in warehousing anywhere we can.

Bob Betke is vice president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; Learn more online at: http://www.fcbco.com

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Natural Solutions’ 2009 Summary

Jeff Barry — Thu, 04 Feb 2010 16:54:58 +0000

As there has been so much negativity in the press about the economy and business failures in 2009, F. Curtis Barry & Company would like to focus on some of the positive aspects of last year. This is the first in a series of blogs that will highlight clients and vendors in the multi-channel retail space and their successes in 2009.

In a recent phone conversation with Tyce McIntosh, President of Natural Solutions, a multichannel order management system provider, we had a chance to discuss and focus in on a number of accomplishments they had in 2009.

From a Natural Solutions’ viewpoint they have viewed the economic time that we experienced in 2009 as an opportunity to do general housekeeping within their application for enhancements that may not necessarily generate new business but make the application better for their customers. Tyce sited the following examples of some of the initiatives they completed in order to enhance the Natural Order application:

Updated the user and technical document
Modifications to the daily procedures to improve the throughput
Performance tuning
Internal staff training
Customer visits to review operational procedures
Taking on new vendor alliances that don’t necessarily have end user contracts.

Tyce also sited that this economic slow down allowed for some of their customers to take on new projects that, under normal busy times, they would not have had the time nor staff to engage in. One customer Tyce sited is Dinn Brothers Trophy, that with the economic slow down it allowed them to be able to devote the time and personnel to the implementation project. He stated that in busier times the resources would not have been as easily accessible. This allowed the implementation of Natural Order at Dinn Brothers to be completed within the time frame that they had established.

Additionally, Tyce said their existing customers look for alternate methods of generating new business; an example of this is Natural Solution’s new partner Taurus Software. Taurus’s business intelligence tool, Manage Metrix, will allow Tyce’s customers to better understand their business metrics and improve upon them.

I asked Tyce what some of the enhancements to Natural Order are planned for 2010. Tyce was kind enough to share the following examples:

Completion of the Credit Card Compliancy to the latest standards
Expanded personalization module
Expanded continuity module
New vendor interfaces
- Taurus Software, Manage Metrix, data integration project
- Mid size ecommerce supplier
- Expansion on Midco’s interface

In a time when our economy was severely down, positive things can still emerge!

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Online Sales Taxes Now Valid in Three States

Paul Sobota — Tue, 20 Oct 2009 20:07:41 +0000

In this past Sunday’s (10.18.09) Parade Magazine, which is read by millions, an article caught my eye on Internet Sales Tax – “States Push for Online Sales Taxes”. This has been a recurring threat that has now taken a step forward. The States of New York, Rhode Island and North Carolina are now requiring retailers to collect sales tax on all online purchases. What a way to inform the consumers in these states that they will now have to pay taxes on all of their online purchases regardless of the company having nexus in these states or not.

Consumers will now have to compare merchandise price + sales tax + shipping and processing charges, that also may be taxed in their state, to determine if they will make an online purchase or not. This is bad news in this economy where retailers are in need of all sales they can garner, especially during this crucial fourth quarter. Another way to inhibit people from buying.

Collecting sales taxes from multiple states and jurisdictions will cost businesses the expense of purchasing expensive sales tax software and integrating it in to their websites and order management systems as well as state tax reports monthly. This may be too costly for some companies and may force them out of business.

What will this do to the US Supreme Court ruling that only required businesses that had nexus (physical presence) in a state to collect sales tax?

What are your thoughts? Is the pressure increasing in your state with the budget shortfalls?

Paul Sobota is a Vice President with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; learn more online at: http://www.fcbco.com.

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How Well Is Your Warehouse Treating Your Customers?

Bob Betke — Wed, 16 Sep 2009 18:00:37 +0000

It never ceases to amaze me how companies will spend untold time and money to source product and find someone to buy it and then provide poor enough fulfillment services that the customer never comes back. If you consider the cost of acquiring a customer, it makes sense to me that you would do everything in your power to keep them.

One situation to consider is when an error is made in shipping an order to your customer. There is the obvious cost of correcting the error including the numerous phone calls, extra warehouse expense to repack the order, freight cost to reship it, the packaging materials required, etc. These costs can amount to $15 – $30 or higher depending on your internal costs. This cost of correcting an error is significant but the cost of losing a potential life long customer is huge.

Another problem area centers on not meeting customer’s expectations for timely delivery. If you guarantee same day delivery or delivery within 7 days, you had better meet those expectations. Customers today not only have a very quick fuse when it comes to forgiveness for mistreatment, unless you have a corner on a particular item, they can and will go elsewhere. Thanks to the Internet, you are exposed to unlimited competition in many cases.

If you consider the statistics indicating that only a fraction of those who buy from you for the first time will come back, it makes it even more important to take good care of them the first time. If you combine those who will statistically not buy again along with those who you upset because of making an error or missing a promised delivery date, you can quickly see the importance of making sure the fulfillment function delivers on your company’s promise of customer service.

Making sure your fulfillment operation meets marketing’s promises centered around service levels and delivery times. We recommend a periodic assessment of your operation to get a handle on what it really costs you to fill orders, what your current service levels are, and what improvements are possible. An independent assessment of your fulfillment operation works best, but an internal review can still yield major short and long term benefits for your company.

This assessment should follow a receipt from the time of presentation at the dock door until the merchandise is ready to sell. In addition, a typical order should be followed from the time it is presented to the warehouse until it is shipped. Slotting and replenishment functions through picking and packing, the returns process, and inventory management including cycle counting should be added to the list of issues to evaluate.

Part of the assessment should focus on the capacity and utilization of the warehouse to determine if there are any opportunities to improve service and reduce costs. Also, a review of the systems in place to support fulfillment should be completed in the assessment.

One other important issue to evaluate is the warehouse staff’s capabilities and competencies. Although difficult to measure in some ways, getting a feel for the workforce and what they can do is a vital part of the overall assessment.

Take the time to learn how well your warehouse and fulfillment functions are operating and use them as a gauge to tell how well your customers are being taken care of.

Let F. Curtis Barry & Company assist you in conducting a warehouse and operations assessment to increase the productivity and efficiencies to boost your customer service to the next level.

Bob Betke is vice president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in warehouse and distribution, warehouse management systems, order management systems, call center, inventory management, and benchmarking; Learn more online at: http://www.fcbco.com

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Shopping Cart Abandonment, A Consumer’s Advantage?

Tocky Lawrence — Thu, 10 Sep 2009 14:57:21 +0000

I recently had a conversation with a friend of mine discussing the opportunities of shopping on the Internet. Okay, in reality we were discussing how the economy has affected consumer buying patterns and what we were really after is finding the best bargains. My friend shared with me something that I had not heard of before but in turn seems to work, much to my amazement, a strategy that I never thought to employ.

My friend is a shopper that I would consider to be a cost sensitive purchaser, one that is always looking for the best price on an item that she is interested in. This leads to a tactic she recently deployed and believe it or not has to do with shopping cart abandonment.

During our conversation she shared with me that she has on several occasions, put items in shopping carts of various websites that she would like to purchase from. Typically these are items that she wants but is in no hurry to purchase right away. She then abandons the shopping cart if the item is at regular price and/or there isn’t a discount readily available. I kept thinking why would you do this? Well it turns out that many companies want to turn the abandoned cart into a sale, so my friend plays the waiting game. Eventually she receives an email from the business letting her know that they have noticed her shopping cart was abandoned and if she would like to purchase the item. Now here is the interesting part, to capture the sale the business usually attaches an incentive, either a discount or free shipping offer if she completes the transaction. With the discount in hand she usually makes the purchase.

Wow, I would have never thought of this as a consumer buying strategy to get the best deal but my hat is off to her as a savvy shopper looking for a discount. If this becomes a wide spread practice, how will this affect your profitability? Let me know your thoughts.

Tocky Lawrence is a Vice President with F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory, and benchmarking; learn more online at: http://www.fcbco.com.

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Transportation Turmoil

Bob Betke — Wed, 09 Sep 2009 18:00:52 +0000

Just when you thought things couldn’t get any worse, shipping packages becomes a little more uncertain. Certain events are adding confusion to an already unsettling situation. With outbound freight costs representing 6 – 8 % of sales and inbound another 2 – 4 % for domestic and 6 -12 % for imported product, changes to the cost of receiving and delivering product can be a critical factor in determining whether you make a profit this year.

Among the potential issues to be faced are:

The potential elimination of Saturday deliveries by the USPS. The effect on customer behavior is unknown at this point but could affect your operation to meet this change.
A potential strike by UPS aircraft mechanics. Many in the industry today do not remember the chaos of past work stoppages. The requirement to scramble to stay in business when carrier service is interrupted is no small matter and could be a life or death issue for some.
Moving FedEx from under the umbrella of the 1926 Railway Labor Act. If this results in the unionization of FedEx, can rate increases be far behind? Some sources are speculating that the increase could be as high as 30% over current costs.
Wildly fluctuating fuel costs are causing planning difficulties for everyone. Those that charge for deliveries constantly have to revise charges to stay current.
The “Employee Free Choice Act” affecting the degree of difficulty in establishing unions in companies could alter the landscape for some carriers.
Confusing combinations of package carriers that cloud rates and service level options. With all of the changes in carriers over the past few years and the increasing level of complexity required to make carrier decisions, a certain level of uncertainty surrounds carrier decisions.
Accessorial charges that may take a lawyer to accurately interpret. With over 90 different charges that can represent a significant percentage of the total cost of delivering product, a lot of time has to be spent understanding all of the potential charges that might affect your business.

With all of these issues and uncertainties facing us in the very future, we have to devote time to understanding our true freight costs and develop a strategy to control them to the point that they will not drive us out of business.

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F. Curtis Barry & Company » State of the Industry

Is The Economy Recovering Happening For Your Business?

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UPDATE: Virginia House Kills “Amazon” Law

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Micros-RETAIL in 2009

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Escalate Retail’s 2009 Highlights

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Diverse Targets For Warehouse Cost Reduction

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Natural Solutions’ 2009 Summary

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Online Sales Taxes Now Valid in Three States

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How Well Is Your Warehouse Treating Your Customers?

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Shopping Cart Abandonment, A Consumer’s Advantage?

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Transportation Turmoil

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