Cut Your Markdown Process In Half
Dots opened its first retail location in 1987. Today, the fashion value retailer sells women's apparel in more than 400 stores in 25 states. Like many retailers, Dots offers markdowns on the products it sells. Once the price of an item is marked down, it never goes back to its original price. In fact, each item's price could go through several subsequent markdowns. This extensive markdown system is a money-saving benefit for the consumer. But, for more than 12 years, the markdown process was labor-intensive and manual for Dots' employees. Steve Hendricks, VP of information systems, has been with Dots for more than 14 years. Recently, Hendricks completed implementation of a scanning solution that reduced the markdown process and improved employee morale and customer service.
Dots' markdown process operated as follows: Every two weeks, employees received a 'markdown directive' document via email from headquarters. The directive was anywhere from 10 to 30 pages, and it sometimes listed hundreds of items. "Employees had to locate the product on the floor, look at each product's individual ticket, match the SKU with the ticket on the garment, and then mark the ticket with the new price," says Hendricks. "Employees spent up to three to four business days or 32 nonconsecutive hours completing markdowns, depending on the size of the markdown." Because markdowns occurred during operating hours, customers still came in and shipments still arrived. Customer service and attention to other aspects of the business suffered because the store-level employees spent so much time completing the markdown process. Also, the time-consuming process may have cost the retailer sales because customers weren't aware of lower prices.
Demonstrate The Scanner's Durability
In October 2006, Hendricks began researching handheld mobile bar code scanners. "I was looking for a unit that could handle the rigors of retail — for example, a unit that could survive a 4-foot drop to concrete," says Hendricks. He considered and tested two companies' scanners and chose Datalogic's Falcon Gun 4420 scanner. Before he chose Datalogic, he performed a simple yet effective demonstration for district managers. "I held up the scanner and showed the audience how it works," explains Hendricks. "Then I threw it across the room. It bounced, skipped, and hit the wall. I picked it back up, and I said, 'Oh, by the way, it will still work,' and I went back to demonstrating what the scanner can do."
Hendricks chose to install the scanner in three pilot stores, one scanner per store, to test the process. Datalogic shipped the scanners to headquarters, and the IT team built the scanners (i.e. put the battery in the scanner, charged it for 8 hours, and loaded the software applications on it). The IT team installed the new markdown application. Once the scanners were configured, the IT team shipped them to the stores. The pilot was such a success that 25 additional stores were rolled out in early 2007. With the three-store pilot proven successful, Hendricks shifted the responsibility of loading the software application to the store managers.
Aldo manages markdowns at ismretail.com/jp/7054.
A CD accompanies each scanner, so when it arrives at the store, it is up to the store manager to install the applications on it. In some instances, IT transfers the data via a dial-up connection, as the retailer does not yet use a WAN. Also, the store manager is responsible for connecting the scanner and the POS system. "Each store is equipped with Microsoft ActiveSync, an application that provides connectivity to devices," says Hendricks. "Since Microsoft Windows CE.NET runs on the scanners, and we're running the Microsoft operating system, it was an easy connection." After the test install, Hendricks' team hired a local company to build and ship the scanners. These stores are instructed to call corporate IT with questions about scanner/POS system connectivity. Dots' store operations group wrote a concise yet complete manual for employee training.
Since the retailer installed the scanners in each store, the markdown process has been reduced by half. Each store takes one to two days to complete the markdown process and requires only one person. Employee morale has improved because the markdown process is no longer tedious or as time-consuming as it once was. As task time was reduced, more time became available to serve customers. An additional application has since been deployed to the scanners. The 'Damage' program eliminates the cumbersome handwritten documentation the store provided when merchandise was removed from store inventory. Employees scan the barcode on the item and upload the resulting file to the corporate office for inventory updates. Hendricks says the retailer will continue to order the 4420 series for new stores as they open, as well as continue to add applications.