A POS upgrade - which includes electronic signature capture and online debit transactions - helped The Wet Seal, Inc. save $250,000 per year.
It's difficult to pinpoint exactly which pothole or fender bender turns a new vehicle into a gas-guzzling clunker. In a similar fashion, it's difficult to say exactly which patch or workaround signals a legacy system is past its prime. For contemporary apparel retailer The Wet Seal Inc. (Foothill Ranch, CA), the proverbial service engine light had come on one too many times in early 2000, six years after it had purchased its legacy POS solution. After upgrading to a new, Web-enabled POS solution, which offered lowered maintenance costs, electronic signature captures, and online debit transactions, The Wet Seal was back in the driver's seat once again.
Peripheral Problems Identified
Prior to focusing on its legacy system, The Wet Seal identified and corrected several peripheral issues surrounding the POS problem such as faulty keyboards and power surges, which resulted in blown fuses and data loss. After replacing its keyboards and installing UPS (uninterruptable power supply) boxes at each of the stores, the retailer cut its monthly maintenance fees in half. After the peripheral issues were resolved, however, it became apparent that constantly creating hardware patches was masking a more permanent problem: an outdated POS infrastructure. "Our legacy system ran on a Pick platform, which was created before DOS and without the Internet in mind," says Ron Hunt, operations manager for The Wet Seal. "The legacy system did not support any Web-enabled applications, forcing us to do expensive offline debit transactions." And, because The Wet Seal's legacy system didn't support electronic signature capture, the company had to manually track customer receipts. "In 11% of all contested charges, the transaction slip could not be found," says Hunt. "We had no choice but to give the customer a charge back."
POS Upgrade Yields Instant Benefits
By early 2000, Hunt and his staff had driven monthly maintenance costs down from the $60,000-to-$90,000 range per month to $15,000 per month. At this point, it was apparent the next step wasn't going to come in the form of writing more code or adding more peripherals - it was time for a POS overhaul. Over the course of a year, The Wet Seal looked at several POS solutions from IBM, Compaq, Gateway, HP, and Dell (Round Rock, TX). "There were five criteria that separated Dell's offering from others we researched, such as easier access to technical support, a better pricing structure, a shorter deployment time, a greater uptime guarantee, and a more knowledgeable implementation team," recalls Hunt.
The Wet Seal's upgrade involved replacing its legacy POS software with Datavantage's Store 21 application, running on a Windows 2000 operating system. Additionally, the retailer replaced its legacy debit and credit authorization software with AJB Software's polling and credit card authorization software, which runs on a Microsoft 2000 server. "Overall it took a little more than a year before everything was integrated and running smoothly," recalls Hunt. "We intentionally put off certain projects during our busy seasons leading up to Christmas and also prior to our back- to-school season." Hunt notes the hardware was stable off the bat, but there were software issues that had to be worked out. "Any time you install new software there will be certain configuration issues," says Hunt. "Some of these problems are fixed by properly configuring the applications, whereas other problems are fixed by vendors working together to come up with application program interfaces to one another's solutions."
By November 2001, The Wet Seal's new POS solution was fully operational and stable. Additionally, it is now in the progress of rolling out signature capture devices, which will enable signatures to be automatically captured during credit and debit transactions. And, during debit transactions, the retailer can authorize transactions online for 25 cents per transaction compared to $1.25 previously. System crashes are unheard of anymore, and monthly maintenance fees have dropped significantly. "Our new system is saving us $250,000 per year," says Hunt.
In the future, The Wet Seal plans to integrate a portal solution with its e-commerce site. "With the portal, a grandmother in Florida could purchase a dress for her granddaughter online or at one of our stores, and her granddaughter could pick up the dress at a Wet Seal store in another state," says Hunt. Hunt has no doubt this upgrade will add an "extended warranty" of sorts to The Wet Seal's POS upgrade.