CASE STUDY - Eastern Mountain Sports Forges a Trail to Merchandising Visibility
Commentary by Richard Pedott, Vice President of Planning and Allocation, Eastern Mountain Sports
Specialty Retailer Uses BI Technology to Climb to New Heights
When customers of Eastern Mountain Sports plunge their sea kayaks into the open surf or stake down their tents in a freezing thunderstorm, they’re probably not thinking about merchandising and supply chain technologies. But the outdoor gear they depend on in those extreme situations is available when they need it, thanks to a business intelligence (BI) dashboard that helps managers keep the shelves stocked with the products they need most. BI software helps Eastern Mountain Sports analyze sales trends and control the supply chain, so customers always have the clothing and gear they need for their recreational adventures. Managers use the dashboard to assess sales, inventory, and margin levels, drilling down as necessary to detect opportunities and analyze potential problems.
“We needed better visibility throughout the business,” says Richard Pedott, vice president of planning and allocation at Eastern Mountain Sports (EMS), an outdoor specialty retailer based in Peterborough, New Hampshire. “We depend on business intelligence and integration technology from Information Builders to give us a complete view of our entire merchandising operation from one central dashboard.”
As vice president of planning and allocation, Pedott leads a vital expedition—not into the backcountry, per se, but into the back-office of the business. His terrain is financial projections, inventory plans, and profit parameters, and he keeps the company on track by keeping a close eye on sales trends and market conditions.
“You need more than just good reporting tools to monitor today’s retail operations,” says Pedott. “You also need hooks into the production information systems to monitor events, gather current data, and combine it all in a cohesive way. That’s what we get from this dashboard.”
Mapping a New Path
Founded in 1967 by two rock climbers, EMS has grown into one of the nation’s leading outdoor specialty retailers, with more than 80 retail stores in 16 states, a seasonal magazine/catalog, and a formidable online presence.
For Richard Pedott, the journey to BI began with a management-led buyout that triggered changes to all aspects of the business, including large-scale improvements to the company’s information systems. “We wanted to have transparency across the entire organization, with a reporting system that was easy to implement and deploy at remote locations,” Pedott recalls. “We also wanted it to be user friendly so that anybody with basic Internet skills could learn the system very quickly.”
With help from Information Builders Consulting, EMS developed an executive dashboard for monitoring the merchandising operation. The project took 90 days from concept to completion. Developers used integration technology from iWay Software, Information Builders’ sister company, to access point-of-sale information on an IBM AS/400 computer and load it into a Microsoft SQL Server data mart. Then they used WebFOCUS to present the data through an executive dashboard that managers can access via simple Web browsers.
An Elevated View of the Landscape
Today, EMS uses the BI dashboard to monitor the merchandising operation at a high level. Just as a climber must constantly assess his equipment, environment, and weather conditions to ensure a successful ascent, managers throughout the organization can study sales results and make inventory adjustments based on a near-real-time view of the retail operation. Already, more than 200 people at EMS use the BI dashboard to obtain a high-level view of merchandising processes. Soon, external users will benefit from the technology as well, as EMS streamlines horizontal collaboration among suppliers, retailers, and customers.
“We all see the same information every day,” Pedott says. “This allows us to quickly determine the top-selling items in any space, or identify which stores are performing best. Because my sales managers can call up the same data that I see on the dashboard, we can easily share tips and initiate dialogues. We can even find out why some items perform better than others by analyzing the transaction characteristics and selling behaviors that produce the results.”
Fast on Their Feet
For example, when EMS wanted to determine why footwear accessories were moving so briskly in its specialty stores, Pedott was able to instantly generate the necessary reports and share them with his managers online. “Once we noticed that accessories sales were up dramatically, we drilled down into the data to zero in on a specific product. Turns out that there was a large increase in the sales of inner soles.”
Pedott suspected the specialty stores were selling these high-margin items because of a unique shoe-fitting approach. Could their tactics be shared with the rest of the retail network?
“These stores had perfected a multi-step sales technique that included the recommendation of socks designed for specific uses, such as hiking or running, along with an inner sole that could be custom-fit to each customer,” Pedott explains. “The dashboard made it easy to analyze the data to see what was selling, then drill down to see why. After that, it was a simple matter to cascade that information throughout the organization to boost sales across the enterprise. We gained insight that we were then able to share with other stores throughout the company.”
We depend on business intelligence andintegration technology from InformationBuilders to give us a complete view of ourentire merchandising operation from onecentral dashboard.
—Richard Pedott, Vice President of Planning and Allocation, Eastern Mountain Sports
The Next Leg of the Voyage
Surveying the trail ahead, Pedott believes BI technology can lead the company to a number of new management vistas. “We intend to use the system for micro-sorting, dialing into the most granular level of product detail, such as colors and sizes,” he says.
EMS is also mapping out plans for more detailed online interaction with its suppliers, possibly through collaborative planning, forecasting, and replenishment (CPFR) techniques. BI technology helps EMS know exactly what customers are buying. By tracking data at the point of sale, the company can quickly re-stock inventory to meet customer demand, reducing carrying costs. “If our suppliers know exactly how certain products are selling, they can ramp up production accordingly,” Pedott explains. “It’s just a question of visibility. We want to extend this information to our suppliers and factories.”
Traditional CPFR software requires parallel investments among suppliers and retailers up and down the supply chain. Partners need to purchase software and install it to link their operations—an expensive and time-consuming process. However, Pedott believes he can achieve much of this same functionality by using the BI toolset to send dynamic, interactive reports to designated users. When properly authorized, these users will be able to pull up inventory and sales information just as if they were using the dashboard in-house, and even control parameterization and sorting.
These dynamic external presentations can include thousands of records—a cost-effective alternative to deploying ad hoc reporting capabilities among the company’s supplier base. Each report can be expanded or contracted as needed, based on individual needs. EMS could even send these dynamic “accordion” reports automatically at regular intervals, so suppliers will always be kept up to date on the state of the retail operation.
It will take some stamina to achieve this level of automation, but Pedott believes the journey will be worth the effort. “The business intelligence dashboard is supplying greater insight and enabling quicker response to events,” he says. “Ultimately, it is our customers who benefit, since this technology allows us to deliver the items they need, when they need them.”
This article originally appeared in the issue of .