Challenges manufacturers face in an e-commerce environment
By Richard Angelo, Director Product Marketing, Jesta I.S. Inc.
Traditionally, consumer product manufacturers have marketed their products through the traditional retail customer channel or in many cases through company owned brick and mortar stores. Companies with strong brand images have been able to successfully market in both spaces by incorporating through line exclusivity offerings or protective pricing strategies. This has historically been received by traditional retailers with mixed reactions running from resigned acceptance to outright anger.
Considering today’s tougher economic conditions, manufacturers see their traditional retail client incorporate more profitable private label goods that are in many cases being sourced by the retailers directly, cutting the consumer products manufacturer out of the picture. Private-label goods accounted for 22% of consumer-packaged products sold in the U.S. in 2009, up from 20% the year before, according to The Nielsen Co. Some manufacturers today are choosing e-Commerce to sell directly to the consumer in order to increase market share and add profitability to their lines. Another impetus to sell via the Web came with the recession, which prompted consumers to do more shopping online, where comparison bargain-hunting is easier. Online sales are expected to reach 12% of the total retail market by 2012, up from 6%, or $211.7 billion, now, according to Forrester Research.
Manufacturer sites are already established as the trusted resource for product information. Forrester Research reported that 77 percent of consumers expect manufacturer web sites to have the best product information and 75 percent say they should be useful for post-purchase information. Because of this existing mentality of trust, manufacturers are finding themselves in a position to influence sales and customer satisfaction in a way that never has been available to them before.
The traditional role of a manufacturer was to mass-produce products and sell them in bulk to retailers (or distributors) who provide the infrastructure and services to consumers that wish to purchase these products in the retail market. There has traditionally been a sharp distinction between the wholesale market and the retail market. However, the advent of online retailing and drop-shipping has blurred these lines to a point where manufacturers are now active competitors in the retail market.
Direct sales by consumer-brand manufacturers are one of the fastest-growing areas of online retail, increasing almost 13% in 2009 to $487.6 million, according to Vertical Web Media, a Chicago-based research firm. Manufacturers such as Procter and Gamble, Levi Strauss & Co, Mattel, and Columbia Sportswear are now positioning themselves as retailers with revised and revamped consumer friendly websites. As a consequence these companies are increasingly looking at direct-to-consumer selling. Six key motivations can be identified:
- Recovery of share of margin
- Increased brand visibility and control
- Shopper experience control
- Strengthened relationship with increased insight into end-consumer
- Improved ability to sell a wider assortment and services
- Improved price and promotions control
The technical and process challenges to the Manufacturer that markets in this space are not insignificant. New data requirements and delivery methods will have to be created and streamlined in order to achieve a high level of success. Some examples are:
- Near real time inventory positions presented to the web front end
- Forecasting web sales to be incorporated into the make \ buy plan
- Inventory reservation \ segregation to support the online channel
- Flexible pick \ pack ship warehousing processes with an emphasis on parcel shipments
- Robust freight and tax calculation processing
- Well thought out returns processing and policies note: some e-tailers report up to 25% return rates
- New CRM data based on end consumer information
- Sophisticated pricing strategies i.e. freight free on xx dollar purchase , BOGO, etc
When manufacturers sell direct to consumers they risk losing their wholesale accounts, as well as tarnishing their reputation. Over the past few years, many manufacturers have struggled with the notion that they’re doing all the legwork (product development, purchasing, warehousing, shipping, etc.) while drop-ship retailers are reaping all of the benefits oftentimes at a higher margin than the manufacturers themselves make. We’re finding that more and more, manufacturers and distributors are turning to retail e-Commerce websites in an effort to expand their customer base and increase sales. And who can blame them?
About Jesta I.S. Inc.
Jesta I.S. is a leading supplier of enterprise business solutions for manufacturers, distributors and retailers primarily in the soft goods and specialty industries worldwide. Jesta I.S. is recognized for its expertise, innovative products and services and its commitment to evolving business solutions in today’s rapidly changing business world. Jesta I.S.’ solutions process essential business management information for well known industry leaders including Perry Ellis International (NASDAQ: PERY), PUMA (German: PUM), Genesco Inc. (NYSE: GCO), Town Shoes Limited, Cole Haan, Haggar Clothing Co., Cavender’s Boot City and DSW Inc. (NYSE: DSW) as well as many others.
Jesta I.S. Inc.
P: 1-888-925-5152
Email: info@jestais.com
Web: www.jestais.com
Copyright (2010) Jesta I.S. Inc. ALL RIGHTS RESERVED. All information contained in this document is the property of Jesta I.S. Inc. All company and product names are trademarks or service marks of their respective owners
What Goes Mobile?
By Leslie Belcher, President, Jesta I.S. Inc.
Ten years after national commercial platforms for mobile commerce were launched in the Philippines and Japan; they are slowly beginning to emerge in the North American market. Residents in rural parts of the Philippines and other developing nations routinely pay bills through their smart phones, while people in Japan and Europe canbuyproducts as well as train and airline tickets using their mobile phones.
The accelerated growth of mobile commerce, combined with the acuity of location-based applications makes it possible for direct response retailers to use the mobile channel for locally targeted mass marketing. One estimate, according to Mobile Marketer, puts worldwide mobile phone connections at 4 billion; while another by Neustar and SMS Mobile Marketing predicts that mobile revenue in the United States will reach $3.3 billion by 2013. SMS text messages dominate mobile advertising in markets like the U.S today, but coupon to phone and location based marketing are emerging.
A recent study by Coda Research agency has revealed that mobile ecommerce in the US shall grow at a compounded rate of 65% between 2009 and 2015. According to this study, mobile phones will constitute 8.5% of all ecommerce revenues in the US. Here is an estimate of the mobile commerce market in absolute terms:
The rapid growth of banking and bill paying activities with mobile phones aside, today’s retailer must be looking towards some rapid development of new marketing strategies. Three areas seem to be emerging as real opportunities: coupon to phone, product locators, and location based marketing. All three rely heavily on existing robust CRM data bases, integrated ERP and POS systems that readily interact with various web services. In the case of product locators, near real time inventory status and true distributed order management functionality are essential ERP functions since the consumer is being directed to sites with product on hand. POS systems are being asked to readily support scanning of bar coded coupons on smart phone displays.
Mobile coupons are the next evolution of the traditional printed coupon and they’re growing in popularity. The YankeeGroup released a consumer survey report in November 2009, which found that 73 percent of respondents were interested in receiving mobile coupons via SMS or MMS. The same report also predicted that mobile coupon redemptions would increase tenfold over 2010. A new report from Juniper Research, forecasts that consumer usage of mobile coupons will generate close to $6 billion globally in retail redemption value by 2014. This new approach to coupon marketing will place tremendous pressure on legacy POS systems to adapt to scanning smart phone displays at the register. Not only will the POS system need a scanner that can physically read the phone display (laser scanners will not), but the POS software will need to be able to handle what amounts to ‘timed pricing by customer’. With this kind of capability being implemented as the cash desk, it is essential to have robust, comprehensive, and real-time accessible CRM databases that can customize campaigns based on customer buying histories and customer loyalty programs.
Smart phone applications now offer various product search tools. Google offers freeware like Barcode Scanner and Googles that can locate a product based on its barcode or a photo image. They offer not only where to buy based on your location, but price comparisons and some retailers offer inventory checking. Product Search for mobile with local inventory lets a user see if, say, a Nikon Coolpix camera is in stock at a nearby Best Buy or Sears and then provides basic directions to get there. Consumers can then tap on an adjacent “in stock nearby” link and navigate to the seller’s page to see whether the camera is in stock. This is approach has exciting potential for the retailer who can provide accurate near real time inventories by product and by site. The obvious risk is alienating the customer who drove out of her way to the store only to find the item was not on hand. The pressure on the ERP system to update the Web Service with accurate on hand inventories by site is critical to success.
The third emerging Mobile marketing strategy involves location based marketing to mobile devices. Google for example is updating its Buzz applications to not only recommend close by retail services, but provide reviews and relevant information along with the obvious directions. Some retailers combine e-coupon pushes to the mobile user to further entice the consumer. The reliance on robust CRM data is critical to the ultimate success of this marketing approach. To be effective, location-based marketing requires the ability to target appropriately, by both geography and context. As much as mobile consumers are looking for places and things, they are also looking for information (directions, reviews, recommendations, help). Part of what makes hyper-local targeting effective is having both the right kinds and the right depth of content to go with relevant ad inventory and offers.
The future of e-Commerce utilizing new smart phone technologies is growing exponentially over the next several years. Retailers that invest in their IT systems to tap into this emerging market can grow market share and revenues successfully.
About Jesta I.S. Inc.
Jesta I.S. is a leading supplier of business solutions in supply chain management systems for manufacturers, distributors and retailers primarily in the soft goods and specialty industries worldwide. Jesta I.S. is recognized for its expertise, innovative products and services and its commitment to evolving business solutions in today’s rapidly changing business world. Jesta I.S.’ solutions process essential business management information for well known industry leaders including Perry Ellis International (NASDAQ: PERY), PUMA (German: PUM), Genesco Inc. (NYSE: GCO), Town Shoes Limited, Tween Brands Inc. (NYSE: TWE), Cole Haan, Haggar Clothing Co., Cavender’s Boot City and DSW Inc. (NYSE: DSW) as well as many others.
Jesta I.S. Inc.
P: 1-888-925-5152
Email: info@jestais.com
Web: www.jestais.com
Copyright (2010) Jesta I.S. Inc. ALL RIGHTS RESERVED. All information contained in this document is the property of Jesta I.S. Inc. Vision Store is a trademark of Jesta I.S. Inc. All other company and product names are trademarks or service marks of their respective owners.
Transforming Retail from Bricks to Clicks
Transforming retail from bricks to clicks
By Leslie Belcher, President, Jesta I.S. Inc.
The economic downturn has created a challenging environment for retailers as the concentration of consumer spending has had a direct effect on overall retailing. Individuals are looking more closely at their discretionary spending and are cutting back most on non-essential products while performing more active price comparison. Today, internet retailing enables consumers to compare prices, save money and limit their delivery costs.
The traditional brick-and-mortar retailers built their IT infrastructure in a piecemeal fashion using legacy merchandising and planning systems to support their growing business (although now it is becoming more expensive to sustain). In the 1990’s, the catalog/call-centre system was introduced to manage that sales channel. Presently, various new web-based e-commerce platforms are helping to grow the business by effectively tying together processes and procedures for the internet channel, with systems that help ensure service excellence by giving the customer the opportunity to buy anything, anywhere, anytime.
Internet retailing is expected to outpace all store-based formats, as most retailers will either enter or expand in the internet retailing channel, while a significantly higher proportion of the world population will have access to the internet. [1]
By the end of 2010, non-store sales will account for nearly 7% of global retailing. Virtual retailers, which initially dominated internet retailing, are coming under pressure from store-based retailers, as they harness the benefits of multi-channel retail, such as collect-in-store options, driving sales and improving the customer’s experience by eliminating common obstacles surrounding order delivery.[2]
The conventional retailing business model is no longer working as it was. Retailers are seeking to transform themselves into multichannel enterprises that will use new channels to grow and to cut service costs without abandoning their traditional strengths; however the systems that worked once to manage brick-and-mortar, catalog and call center channels are not designed to support the complexity of the e-channel operations. While it is typically not feasible to instantaneously change a promotion or a marketing message within the brick-and-mortar store, the same is not true of a transactional e-commerce site which will often provided up to date information at the click of a button.
The virtual channel is expected to put increasing pressure on store-based retailing in the coming years. If retailers remain stagnant they risk alienating their evolving customer base who are in turn becoming accustomed to enhanced services such as order tracking, customer service and online account management, thus increasing operational expenses, leaving them out of the competition and out of their customers’ scope.
In order to be a successful multichannel enterprise, retailers should follow a four-stage process: Create a multichannel strategy; Determine the relative positioning and priority for the channels; Organize for multichannel operation; and adopt best practices for integrating the traditional and virtual business.[3] Their competitive advantage will rely on how they control their multichannel operations. It is essential to ensure the right offering when expanding via online channels. Moreover companies need to have the capability to capture accurate demographic information about their online customer base in order to meet their expectations and be consistent through the channels. To do this, retailers must have the right systems in place to collect such information therefore improving their customer relationship management and service excellence/delivery capabilities.
Finally, the technology associated with e-commerce systems will support a wide range of retail applications offering the ability to improve product supply, enhance service and/or reach otherwise inaccessible markets. Providing real-time data and allowing customers to access to inventory information is crucial for internet retailing operations because is directly related to the effective execution of customer relationship management practices.
Jesta I.S. Inc.
P: 1-888-925-5152
Email: info@jestais.com
Web: www.jestais.com
Copyright (2010) Jesta I.S. Inc. ALL RIGHTS RESERVED. All information contained in this document is the property of Jesta I.S. Inc.
[1] Source: Global Retailing: Expansion Strategies of the World’s Leading Retailers – Euromonitor International, July 2009. P 31
[2] Retailing: New Concepts in Retailing-The thin line between Success and Failure – Euromonitor International July 2009,p.22
[3] Multichannel Retailing: Bringing the New Into the Old. David Flint, Geri Spieler, July 2001.
Jesta I.S. is among the Top 10 Reader’s choice of Consumer Goods Technology on Supply Chain Execution in 2010
Jesta I.S. named among the Top 10 Readers’ Choice of Consumer Goods Technology
Ranked as one of the top 10 Software firms on Supply Chain Execution in 2010
New York, NY – February 22, 2010 - The Consumer Goods Technology magazine has conducted for the tenth year in a row, “The readers’ choice ’10 survey”. The Consumer goods technology readers recognize the solution and service providers that best empower their business. The survey consists in 10 technology and service categories, including Supply Chain Planning, Trade Promotion Management, Demand Data Analytics, New Product Development and Introduction.[1]
The survey was answered by 165 executives from consumer goods companies of all sizes. Participants identified the solution or service provider they currently use in each applicable category and ranked the customer experience received using their chosen provider.
Jesta I. S. has been listed for 3 consecutive years in the top 10. Jesta I.S. was acknowledged as one of the top 10 companies in the Supply Chain Execution category. These results confirm Jesta I.S’ mission of creating value and return on investments for its clients. Each module, including Vision Supply Chain Management of Vision Suite is designed to be deployed independently or collectively giving access to a complete internationalized solution.
“We have worked hard to develop an end-to-end solution suite that sets us apart from other software companies, and we are glad that CGT has been able to highlight that achievement,” says Leslie Belcher, President Jesta I.S. “We are most honored by the client-driven portion of the survey as we believe our customer recognizes that our supply chain innovation and best practices assists them in improving their supply chain efficiency.”
About Vision Supply Chain Management
With Vision Supply Chain Management (SCM) your organization will quickly gain a strategic advantage by facilitating the sharing and coordination of information between yourself and your supply chain partners. Whether you are a traditional retailer, self-sourcing retailer or wholesaler, Vision SCM enables companies to manage the various steps of the supply chain effectively, using technology that makes your trading partners accountable and responsive. Using Vision SCM, your trading partners will quickly become a natural extension of your organization through real-time collaboration, information sharing and supply chain visibility. Vision SCM’s exception-based management rules monitor processes (production steps, shipping, sample creation, purchase order fulfillment etc) and issues alerts based on thresholds eliminating bottlenecks and increasing speed-to-market.
About Jesta I.S.
Jesta I.S. is a leading supplier of business solutions leveraging more than 40 years of expertise in supply chain management systems for manufacturers, distributors and retailers primarily in the soft goods and specialty industries worldwide. Jesta I.S. is recognized for its expertise, innovative products and services and its commitment to evolving business solutions in today’s rapidly changing business world. Jesta I.S.’ solutions process essential business management information for well known industry leaders including Perry Ellis International (NASDAQ: PERY), PUMA (German: PUM), Genesco Inc. (NYSE: GCO), Town Shoes Limited, Cole Haan, Haggar Clothing Co., Cavender’s Boot City and DSW Inc. (NYSE: DSW) as well as many others. Additional information is available at www.jestais.com
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Copyright (2010) Jesta I.S. Inc. ALL RIGHTS RESERVED. All information contained in this document is the property of Jesta I.S. Inc. Vision Suite products are trademarks of Jesta I.S. Inc. Vision Supply Chain Management is a trademark of Jesta I.S Inc. All other company and product names are trademarks or service marks of their respective owners.
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Diana Ferraez
Marketing Manager
Jesta I.S.
(514) 925-5100
dferraez@jestais.com
[1] Ackerman, Alliston; Romanow, Kara; Padilla, Alarice.”Readers’ Choice ’10.” Consumer Goods Technology. January, 2010, p. 10.
Cavender’s Boot City adds Jesta I.S.’s Vision Financials to its suite of Vision Solutions
New York, NY – November 19, 2009 – Jesta I.S., a leading supplier of business solutions for the soft goods and specialty markets, announced today that, Cavender’s Boot City, a leading western wear and footwear retailer operating more than 50 stores primarily within the state of Texas has successfully gone live on Vision Financials.
Vision Financials is part of the Vision Suite and enables organization to reduce the number of vendors, opting for a more affordable and integrated solution from a single vendor. Cavender’s Boot City, also counts on Vision Merchandising and Vision Planning to run their business The integrated retail offering ensures that data is unified across the enterprise so that meaningful and accurate decisions can be made while strengthening corporate and fiscal discipline.
“As a long-time Jesta I.S. customer and Vision Merchandising and Vision Planning user, Cavender’s was well positioned to take advantage of the integrated Vision Suite by deciding to roll out Vision Financials. With Vision Financials, we are able to reduce processing time for month-end calculations and simplify the accounts payable processing cycle, creating a more predictable cash flow. We can see additional benefits including a clear reduction in manual tasks that allow our team to function more efficiently,” added Jim Thompson, CFO for Cavender’s Boot City
Cavender’s can maximize invoice processing and invoice with or without a Purchase Order, match against the PO and Receipt, release within preset tolerance limits, and include notes and attachments to all transactions. Accounts Payable module offers Cavender’s with flexible payment processing, a simple yet robust means of managing vendors, simplified bank reconciliation, import/export abilities including built in formulas for optional export of data to Microsoft Excel.
Cavender’s is able to improve decision making by taking advantage of the systems on screen flexible General Ledger inquires and drill-down right to the source transaction of the inquiry. Another time saver is the accelerated data entry with templates and recurring journal entries.
“Jesta I.S. has a long standing relationship with Cavender’s Boot City and we are very happy to announce their go-live on another Vision product. We are confident that as retailers, especially in the current climate, continue to evaluate their enterprise systems and IT spend, will start to reconsider the best-of-breed approach to systems. Cavender’s like many of our customers have realized the cost savings associated with reducing the number of software vendors. We like to say that we offer tier 1 functionality at a tier 3 price which Jesta I.S. can do compared to the larger enterprises,” added Leslie Belcher, President of Jesta I.S.
About Cavender’s Boot City
Based in Tyler, Texas, Cavender’s Boot City is the largest western wear retail chain in the United States, operating retail stores as well as a popular Web store featuring western boots, accessories and apparel for men, women and children. Cavender’s Boot City and Cavender’s Western Outfitters have become synonymous with western fashion. Additional information is available at www.cavenders.com
About Jesta I.S.
Jesta I.S. is a leading supplier of business solutions leveraging more than 40 years of expertise in supply chain management systems for manufacturers, distributors and retailers primarily in the soft goods and specialty industries worldwide. Jesta I.S. is recognized for its expertise, innovative products and services and its commitment to evolving business solutions in today’s rapidly changing business world. Jesta I.S.’ solutions process essential business management information for well known industry leaders including Perry Ellis International (NASDAQ: PERY), PUMA (German: PUM), Genesco Inc. (NYSE: GCO), Town Shoes Limited, Cole Haan, Haggar Clothing Co., Cavender’s Boot City and DSW Inc. (NYSE: DSW) as well as many others. Additional information is available at www.jestais.com
Dean Street Group, live in 3 months on Vision Merchandising and Vision Financials
Dean Street Group Successfully Deploys Jesta I.S. Retail ERP Suite
Newly established firm achieves go-live in just three months
New York, NY, July 2nd, 2009 – Jesta I.S., a leading supplier of business solutions for the soft goods and specialty markets, announced today that Dean Street Group LLC has successfully implemented Jesta I.S.’ Vision Merchandising and Vision Financials applications.
Englewood, NJ-based Dean Street Group LLC is an importer and retailer of affordable footwear. Founded in 2008, its’ principals bring many years of successful product development and retailing from the branded, and make up channels of the footwear business.
Dean Street Group operates as a “shop in a shop” and manages the entire footwear business at 840 Rite Aid Pharmacy locations on the west coast of the United States. Dean Street Group is responsible for all footwear assortment and merchandise planning, procurement and fulfillment.
An important factor in Dean Street Group selecting the Vision Suite was Jesta I.S.’ proven expertise in footwear. The Vision Suite’s ease of use, breadth of functionality, and rapid implementation methodology also played a pivotal role in the selection process. Dean Street Group was confident that Jesta I.S. experience and business model could get the organization live in just three (3) months time.
“We are delighted to welcome Dean Street Group to our user community. Jesta I.S. continues to strive to meet our client’s expectations by offering solutions that have a solid upgrade path to meet future growth or expansion. Jesta I.S.’ ability to successfully get Dean Street Group’s business up and running in a mere ninety days proves that our rapid implementation methodology works,” commented Leslie Belcher, President of Jesta I.S.
“From our initial meeting through successful go-live the Jesta I.S. team has proven to be a valuable and professional partner that understands our business requirements. There are many reasons why Jesta I.S. was identified as the right partner for Dean Street, however rich functionality and speed to go-live were the two of major factors.” added William Lenich, President for Dean Street Group Inc.
“We have been able to quickly reap the benefits of the Vision Suite. This integrated offering eliminates the need for rekeying information and will provide management with great visibility. Vision Merchandising is now running our business allowing us to focus our time on critical management decisions. We expect to be live on Vision Planning in the coming months and look forward to even greater rewards from this integrated suite,” added Margaret Reed, COO for Dean Street Group Inc. Read more
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