Phil Cutter likes to be where the action is, whether it’s throwing himself in front of pucks as goaltender for his men’s hockey team, or cruising the blacktop on a Yamaha V-Star 1100 motorcycle. So it’s not surprising that seven years ago, when given the opportunity to take the IT reins of young and dynamic Toronto-based fashion retailer, Danier Leather, he found it an offer he couldn’t refuse.
Recalling his decision to leave Shoppers Drug Mart, where he held the post of Director of Software Development, Cutter indicated that it was an interview with Danier president Jeffrey Wortsman that swayed him. “He’s a technology-driven guy. He has three systems with him at any point in time and he uses them religiously – they are not toys. When it comes to technology, some get it, some don’t – he’s one of those guys that get it. That was a big thing for me personally.”
Cutter bought into Wortsman’s vision of a workplace enabled by easily accessible systems that would instill users with confidence, enabling them to become power users. And since making his career change, he has never looked back. He hasn’t had time to. His days are consumed in crafting that easily accessible IT environment – an environment that supports Danier’s business to a level of detail that most companies would find enviable. How accessible – how detailed? Said Cutter, “With a few clicks of the mouse I could tell you at eight o’clock this morning what we sold yesterday in Vancouver by colour and size, and to whom and by whom.”
A FERTILE TEST BED
Danier’s IT environment excels at providing wide-ranging support to the business. One reason for this – with two manufacturing facilities, over 70 stores, and annual revenues in excess of $100 million, the company happens to be an ideal size for beta testing new products, a fact that it repeatedly takes advantage of in order to maintain a position at or near the leading edge of various types of retail technology.
“STS Systems provides us with all of our host systems. We’ve been with them for over a decade and we beta test a lot of stuff for them,” said Cutter. “I like to think it’s because we’re so good at it – and I think we are; we have terrific users – but I think a lot of it also has to do with the fact that our size and our limited number of SKUs allows us to really massage a system. We’re not so huge that we don’t use it to its full extent.”
Size gives Danier another advantage: nimbleness. Long term at Danier isn’t nearly as long as it is in large companies where projects must go through several levels of approval, along with a lengthy series of meetings and discussions. “We’re very dynamic. Things get done here very quickly,” said Cutter. “When there’s a project to be delivered, the time scale would surprise you. When somebody says go, you gotta go.”
With vertical integration an overarching priority, Danier is putting together a highly effective set of applications covering virtually every aspect of its business, from planning to merchandising to marketing to day-to-day operations.
In addition to its legacy financial systems, Danier’s key applications include: MMS (Merchandise Management System), a planning system; EnVue, a reporting application that feeds MMS with merchandising information; and Marketworks, a customer-database/marketing application. These applications all run on NT-style minis and servers from Data General and Dell.
MMS: Being its own manufacturer, Danier has no vendor to call and order more product from. Therefore planning is critical and the company is determined to have the best possible process for it.
“We’re not a case shipment kind of company. You don’t get things in dozens from us,” said Cutter. “When we deliver sheepskin men’s or ladies’ coats to a specific store, for example, we deal in units. If we distribute five units and we’re wrong by two, we’re out by 40 percent. That’s why we need very specific and proper merchandise planning.
Towards that end, Danier is now in the midst of looking at its entire planning process from beginning to end – i.e. from the procurement of raw materials right through to product distribution. It is currently implementing the MMS planning system – a joint system from MMS and STS – a tool that promises to make the planning process about as accurate as it can conceivably be. The large-scale project is expected to have a big impact on the way everything gets done at Danier, from correct procurement to ensuring fewer markdowns. In short, it will help Danier live up to that venerable retail maxim: the right goods at the right place at the right time.
Danier is creating plans for both the chain side and the store side of its business. At this point the company has taken three years worth of history and, through MMS, created its first set of plans for the chain side.
“We’re merchandise planning at what people would call department, class, source, and skin type [fabric] level, which is very low down on the structure compared to how most people plan,” said Bruce Aitken, Director, Merchandise Planning. “We have a full season planned out until the end of this fiscal year. We’re now in the process of beginning to take some of that data over to the store side; we’ve loaded the store history, but we haven’t yet done any store planning. We’re just starting to look at that.”
Added Cutter, “We’re reporting at a level that previously has never been reported to before. To report against the plan at a skin level, or the lowest kind of level we’re talking about, gives that much more power to the people who make the decisions on skins, colours, sizes, and so on.”
Another big advantage is that the data is very tightly integrated with the STS legacy systems. Different sources of data don’t provide different numbers for sales, for example. Everybody looks at the same numbers.
EnVue: An STS reporting application, EnVue is basically Danier’s merchandise data warehouse. Everything that comes through the company’s POS systems gets loaded into the warehouse and the application allows that information to be massaged. EnVue feeds the sales information into the planning system, and as such functions as the merchandising portion of MMS.
One of the strengths of EnVue Flash – an EIS-type “flash sales” system that is part of EnVue – is its simplicity. With only five minutes of training, the user can zip through the application. For example, she can look at a screen of yesterday’s daily sales overall by chain, click once to get a store breakdown (every store, this year versus last year, margins, units the store has moved this year, units the store moved last year, etc.), click again to get a department-level breakdown, and click a third time to get down to the actual class size, where she can see that six car-coats were sold at a particular store for so much money, etc.
Said Aitken, “The nice thing about EnVue is that it’s written in English. You don’t have to be a computer programmer to develop reports. To teach somebody to do this properly takes about an hour.”
The user creates the fields, drags them, individualizes the headings, and creates his or her own extracts and reports. If the application doesn’t do everything the user wants it to do in a format that’s easy to use, the content is exported into a spreadsheet for further refinement.
Marketworks: Danier’s approach is to have all customer information captured in one area where it can be used to trigger different marketing activities. Marketworks is the repository for that information.
Currently, the company collects most of its customer information from the point of sale, and it doesn’t share that information with anyone. It is fed into the Sybase-driven Marketworks system, where customer profiles are created. By combining that information with such things as Compusearch data, Danier learns a lot about how to best service its customers. And it goes beyond just servicing individual customers; the information can be used for such things as site location and determining the value of fliers versus direct marketing versus newspaper advertisements.
Marketworks can really shine when it comes to the Web, an area that Danier is presently putting a great deal of effort into.
“E-tailing opportunities can be identified specifically with Marketworks,” said Cutter. “You can have very personalized web sites – give preferred customers their own log-in, for example, allowing them and their family to shop at a certain level and enjoy certain rewards. You can offer various services that might be unique, or you can have affiliate programs that link in with other businesses, such as the travel industry.”
Cutter added, “We collect very valuable information from our stores, and we’re going to get valuable information from the e-commerce side of things. The idea is to make sure they marry together all the way so that we have one core competency of customer data.”
TAKING IT TO THE WEB
Danier’s management team is well aware of the ability of the Web to transform the company’s business. Having taken the time to study and evaluate what’s happening with retail on the Internet, Danier is now ready to make its presence felt there in as polished a fashion as possible.
Employing the services of IBM Canada’s Retail Consumer Consulting Practice, Danier is launching a site in November that promises to be one of the most advanced retail sites in the country. IBM has two teams helping Danier with its plans: a business strategy team and a technical team. As well as helping to design and implement the site, IBM will assist in putting together a ‘go forward’ plan that includes such things as marketing and organizational change.
Part of the approach for IBM is to conduct executive interviews to understand what Danier’s processes are and what types of things the implementation team should be considering; for example, sizing and fit are much more relevant to Danier than for some of the other retailers IBM has worked for.
“Danier has an immediate need for Christmas and a longer term need down the road, and we’re trying to address both of those needs,” said Laurie Dillon, a consultant with IBM’s business strategy team. “At present our main focus is putting up what we call the ‘chicken wire’ for Christmas. Then we’ll need to revisit some of the long-term solutions we’re putting in place for November and figure out what we want to adjust.”
“There’s the dynamic of just getting the site up, and the dynamic of doing things for the longer term,” said Cutter. “We’ll be moving forward in phases, and for there to be a good ROI we want to be sure that whatever we do in phase one will be usable in phase X. So we need to be very specific on what it is we’re going to be doing in future phases, looking as far forward as possible.”
SMILE, YOU’RE ON E-CAMERA
Danier has asked IBM for a number of development options with a number of different price points. These options include at least three different flavours of site with varying capabilities. The bottom-line in functionality is that visitors must have the ability to browse through Danier’s selection of about 200 styles, and be able to transact their order. The company has yet to determine where and when it will be able to ship.
In addition, for both entertainment and functionality reasons, Danier wants the site to employ web cameras that will allow site visitors to browse its head-office store in real time, in order for those customers who don’t know Danier to get an idea of what the retailer is all about. Ultimately, the goods are the message – along with customer service – but there has to be a reason for the customer to go there, Cutter believes. The site has to keep customers interested and offer them something they otherwise wouldn’t get.
Positioned around the store will be seven software-controlled cameras, rotatable through 360o, that site visitors can move by using their mouse. Multiple cameras allow several people to browse the store at the same time. Clicking the mouse will enable them to zoom in on different areas and look at the goods. Further clicks will zoom the high-resolution camera closer. “We had a demo unit, and when we zoomed the camera in you could actually see the texture of the garment. Site visitors will be coming as close as they can get to touching the item,” said Cutter.
“You can actually provide the option of shopping that way if you can identify the SKU,” he added. “The customer can go down, take a look at your blazer or jacket, and if the SKU can be identified, then by keying it in the customer can get sizing options, colours, et cetera.” The company has yet to decide at what phase it will want to introduce that capability – or even whether it will do it and how it might be done, but it’s all under discussion.
What else might a Danier web site visitor see? Taking an FTV (Fashion Television) approach, the site might provide visitors with an inside look at a Danier photo shoot, showing just what it takes to produce a fashion ad. The emphasis again is on entertainment. Danier is determined to avoid a site that potential customers may find stodgy and boring.
“It may be a clich