Managing almost 200 retail stores worldwide can't be easy, especially when your retail, warehouse, and accounting systems are separate. Ask pet chain Petland. The company turned to a retail enterprise system to solve its problems.
The retail pet chain has gross sales of $120 million. The Chillicothe, OH-based company also boasts 170 franchise and corporate retail stores in the United States, Canada, Japan, France, and Chile. Although the stores primarily deal in live animals (dogs, cats, reptiles, birds, fish, and other small animals), they also carry a wide variety of pet-related products. Ask the people at Petland, and they'll tell you: pets are big business.
But, things weren't always running so smoothly for the international retail chain. Petland had been using separate accounting and warehouse systems that were, in the words of Petland Controller J.J. Finn, "Not too good. There was a makeshift accounting side to the system, and another separate warehouse system," says Finn. "The POS side of the system was non-existent. We needed something that integrated the retail, distribution, and accounting systems."
It's not as if the company was unable to stay on top of things. Petland was definitely hearing the sound of money coming in literally with the "cha-ching" of every sale on its obsolete, manual cash registers. What Petland wanted to hear about, though, was important data and statistics pulled from the retail stores, data that would allow them to more efficiently and profitably run the company. Without POS stations to collect the data, or integration among the various systems, however, Petland couldn't implement any new strategies. That was when management began a dogged search for a retail enterprise solution.
Moving Toward A Solution
Petland's journey toward a complete retail enterprise system (RES) began with the installation of a POS system supplied by Retail Touch of Springfield, OH. The new Trimax POS system modernized the retail side of Petland's system, but left it like a desert oasis that no one could find. The POS was pulling information, tallying sales, and providing statistics, but the information didn't tie in with the accounting or warehouse systems.
That's when the company turned to Magstar Inc., developer of enterprise-wide retail software. Magstar was able to supply its fully integrated retail enterprise system to manage warehousing, accounting, and store operations. "We found that the Trimax side of the solution fit our retail needs well, and the Magstar side fit distribution and merchandising very well," says Petland's Finn. "It was a match that enabled us to gather all three systems under one umbrella."
Petland and Magstar began a comprehensive pilot project in January 1999. Originally, Petland had planned to run the new system parallel to the old system for a month. This test period was to be accompanied by a complete physical inventory. Petland, however, ended up changing these original plans. "We ran the systems parallel for about a week, but then we just abandoned that," says Petland's Finn. "We still did the inventory, but we felt so comfortable with the new system that we just switched. Overall, the start-up was very easy. I've heard horror stories about other companies trying to go online with new systems we experienced none of that. Magstar was able to take our current database and download it into the new system. It was really that simple."
No Dog And Pony Show Here
By connecting the retail, accounting, and warehouse systems, Magstar enabled Petland to do things that were not possible under the old system: access up-to-date information (financial, POS, merchandising, and retail), track item movement, analyze vendor performance, identify sales and seasonal differences by store, and adjust the retail mix based upon sales. Petland can now measure promotion, ad, and flyer performance. The new system connected the information that was stagnant in the POS stations. Now, the sales information is stored daily in the POS stations and is uploaded nightly into the Petland mainframe. The front end and back end of the system have been unified.
"We can now break down sales by department: fish, reptiles, dogs, etc.," says Finn. "We can even subcategorize these main categories. For example, we can isolate a single product a plush dog toy, and then itemize it by small, medium, and large sizes. We find the trend for big dog toys is dramatically up versus small dog toys. Right now, the American Kennel Club (AKC) tells us that four out of five household dogs are large breeds. This confirms what we had tracked in the information from the retail stores, and we can relate that information to those stores. The franchisees may not be carrying these toys, so we can make good suggestions."
The scenario that Finn describes is in stark opposition to the numbers game involved with the old system. Now, rather than simply looking at the SKU numbers, Petland is grasping at the bigger marketing picture. The new system gives the ability to track the movement of a product back to a specific category rather than tracking it back as one of 6,000 products a store is carrying.
The system even automates the replenishment of store inventories. Rather than spending time on the phone or fax machine placing an order, the system can electronically read inventory levels and place orders for stores when stock falls below a certain mark.
Another advantage of the system everyone uses the same interface. Retail, warehouse, and accounting users all see the same exact screen with the same exact set of commands. This prevents any miscommunication between departments that might already have obstacles in sharing information. "The beauty behind this," says Petland Distribution Manager Tony Neff, "is that, if a retail store has a minute problem with a module, we are very familiar with the system and are able to immediately lend support. We're all working on the same page."
Assessing The Results
The examples in this story speak for the benefits of Petland's new retail enterprise system, but in what terms would Petland measure the success of the system? "The efficiency," responds Finn. "The integration of systems cuts down our time and labor so much. We haven't tracked a return on investment, but I'm certain that the savings in time and labor also means big financial savings, as well."
With multi-location accounting, the new system is also Y2K compliant. It features an ODBC-compliant relational database management system (RDBMS) and UNIX enterprise server. Although Petland doesn't have plans for specific upgrades, it does want to tailor the system to meet future needs.
Magstar will also continue to provide service and support for the RES. "Magstar automatically downloads the upgrades and changes to us," says Petland's Finn. "In turn, we can send those changes directly to our franchisees. Magstar is really great on the support side and will definitely continue to play a role in the operation of the new system. We are pushing for upgrades and improvements as long as we have these continuing needs and I don't see that ending any time soon."
Clearly, Petland's use of technology has been essential to the growth of the company. In this case, Petland's business going to the dogs has been in no way bad.