Retail: Specialty Merchandising: Collaborate To Meet The ChallengeRetail: Specialty Merchandising: Collaborate To Meet The Challenge

Analytic and collaboration tools are increasingly helping specialty retailers maneuver through the biggest retail challenges.

"The Holy Grail has always been matching the exact level of inventory to the exact volume that customers will buy while limiting the amount of price markdowns and excess inventory," says Scott Langdoc, director of retail research at AMR Research.

A key IT trend among specialty retailers is deployment of end-to-end systems that help analyze historical and current sales information, Langdoc says. Those types of goals are what Staples Inc. is trying to achieve with its new "process-based approach" to improving its supply chain, says Paul Gaffney, the office-supply retailer's executive VP and CIO.

Staples is working with its largest suppliers to improve inventory forecasting and ultimately to ensure that the products customers want are in stock, while fewer resources are tied up in inventory. "We're continuing to drive a better return on assets," Gaffney says. "The bottom line is that we can satisfy more customers while having less inventory."

Staples is accomplishing this through a Web-based collaborative planning, forecasting, and replenishment tool that's been rolled out to its 17 largest suppliers over the last year. Such tools give suppliers detailed information on sales, customer behavior, and other product data as it relates to the particular vendor.

Langdoc says specialty retail chains also continue to use high-bandwidth connectivity to improve the communication and collection of point-of-sale information, as well as provide store personnel in diverse or remote locations with access to centralized product and price information.

That's the case for Do It Best Corp., a co-operative of 4,400 independently owned hardware stores. Its goal is to have all stores, many of which are in rural locations, linked to the company via the Internet. This gives them more timely access to product and price information and lets them place orders for merchandise they don't carry, VP of IT Kay Williams says. All but 100 stores are wired to the Web, she adds, and the rest will be connected soon.

INDUSTRY LEADERS Rank Company Revenue in millions Income (loss)
in millions IT
employees 55 Staples Inc. $11,596 $446 765 145 CDW Corp. $4,265 $185 141 157 Ace Hardware Corp. $3,029 $82 370 159 Do It Best Corp. $2,400 -- 199 172 Lowe's Cos. Inc. $26,491 $1,471 774 177 Petsmart Inc. $2,695 $89 212 182 Footstar Corp. $2,461 ($24) 165 198 Lands' End Inc. -- -- 305 201 Bed Bath & Beyond Inc. $3,665 $302 160 255 Tiffany & Co. $1,707 $190 223 343 Best Buy Co. $20,946 $99 880 377 The Sherwin-Williams Co. $5,185 $128 480 397 Kinko's Inc. $2,000 -- 296 444 Men's Wearhouse Inc. $1,295 $42 100 490 Nordstrom Inc. $5,975 $90 -- Financial data is from public sources and company supplied.
Revenue is for latest fiscal year.
Employee data is from information 500 qualifying survey.

SNAPSHOT INSIDE COMPANIES Average portion of revenue spent on IT 3% Average percentage of industry applications and business processes that have Web-based front ends 30% Companies with real-time business processes in place 93% HOW COMPANIES DIVIDE THEIR IT BUDGETS Hardware purchases 19% Services or outsourcing 13% Research and development 3% Salaries and benefits 30% Applications 22% Everything else 13% INDUSTRY FINANCIALS Average year-over-year revenue change 10% Average year-over-year net-income change 7% DATA: information RESEARCH
See year-over-year shifts in business-technology practices for this industry. Compare and contrast this year's data with last year's.

Return to the 2003 information 500 homepage