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Hot off the press!
Feature story on KWI in Stores© magazine.
Operational Improvements ... more
Many “Unhappy” Returns? ... more
Who’s Who at KWI? ... more
Here come Elizabeth & James ... more
Short Cuts – Fast, Helpful Hints ... more
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Reverse Outsourcing
Upscale Indian apparel store taps U.S. vendor for retail information systems From January 2009
By Michael Hartnett
Sponsored by
With a population of 1.2 billion people, a growing number of whom have a deep appreciation of top U.S. and European designer brands as well as the resources to buy them, India is emerging as a high-end fashion market. The Collective, a “super premium men’s lifestyle” concept store in Bangalore, has precisely the merchandise assortment to attract those customers. The 20,000-sq.-ft. store, the first of several planned for Southern Asia, opened in November featuring top names such as Hugo Boss, Versace, Ted Baker and Church’s footwear. What is decidedly unexpected is The Collective’s choice of Port Washington, N.Y.-based Kliger-Weiss Infosystems (KWI) to provide the store’s retail information systems in merchandising, point of sale, planning and customer management. Isn’t that some form of reverse outsourcing? “Large retail organizations are more comfortable if they have those systems in house,” says George Santacroce, CEO of The Collective. “But for a start-up organization, it makes a lot more sense to outsource those functions.” Santacroce, a native New Yorker with 38 years of wholesale and retail experience in international markets, now resides in Bangalore, the nation’s third-largest city and an area often referred to as India’s Silicon Valley. While the issue of whether or not to outsource all those systems was settled quickly because of Santacroce’s past dealings with KWI, there is still the matter of reaching back through multiple time zones and an international dateline to meet his software requirements. “The reality is that the expertise in India, in terms of software, is not on the retail side,” he says. “It’s ironic that India is known for software and its technical development, but not in retail.” The Collective is one of a handful of retail concepts operated by Aditya Birla Nuvo, part of the Aditya Birla Group that generated $28 billion in revenue during its most recent fiscal year. More specifically, The Collective is part of the Madura Garments segment, with the initial concept expected to evolve into a men’s, women’s and home lifestyle store. Over the next three to five years, it plans to add eight to 10 more stores in India and other key markets in Southern Asia. Stores in Mumbai and Delhi are scheduled to open later this year. As he pushed to meet his opening day deadline for that first store, Santacroce says some issues surfaced with his initial choice of software provider, a large, North American-based company. He chose to withdraw from that development project and switch to KWI “because of the time and cost demands [on The Collective] to help with the implementation, which involved higher costs and distractions.” Best-of-class functionality The KWI implementation took 120 days from start to finish, “but we went live in India with 70 to 80 percent functionality in just 90 days,” Santacroce says. Another advantage of working with KWI, he says, “is that you end up getting best-of-class functionality in POS, CRM and inventory management.
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And KWI wrote all the interfaces for SAP financials, warehouse management and for the incredibly complex Indian tax code system.” Another point of differentiation is what Santacroce characterizes as KWI’s “value-added services.” “Rather than simply providing basic data, KWI takes the additional step of doing the analysis of that data which allows for quicker problem-solving and the ability to act on that research,” he says. “For example, we use the CRM piece, but they also do the basic analysis of shopper trends. We can then slice and dice that data for our direct-marketing programs.” On the LP side, KWI prepares automatic daily sales audits. “If they see an aberration, they can identify it for their clients,” Santacroce says. “They can pin down the exception to the date, time and register and identify the transaction.” KWI president and CEO Sam Kliger has been part of the company’s senior management for more than half of his life, having dropped out of college at 19 to develop a retail management system. The private company enjoys annual sales of between $20 million and $30 million. “We’ve never had to borrow a penny, and our average annual growth rate over the years has been 14 percent,” Kliger says. “We are loath to grow too quickly because we have to be able to serve our clients,” which include United Colors of Benneton, Liz Claiborne, kate spade, Swatch, Kenneth Cole, QVC and Michael Kors. Being competitive “Ten years ago we would spend half our time getting clients to trust us with outsourcing,” he says, “but now everybody is outsourcing to be competitive.” KWI’s typical client is a specialty retailer with fewer than 250 locations. Larger operators already have an IT department and an infrastructure, “and they will not get rid of that infrastructure to go to me,” Kliger says. “But if I sign up a company with one to five stores and they grow to 250 and 300 stores, we can deal with that” expansion of scale. The Collective project required “an incredible effort to get them up and running in such a short period of time,” he says. “We closed the deal on July 15 and they were up and running by November 1.” Kliger’s company spent 1,000 hours modifying its system “to handle the arcane tax laws in that country, which has very specific laws about moving merchandise around different states.” The secret to his company’s success,” Kliger says, “is that the CEO knows how to sell and knows the system. I wrote it.”
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Continuous Improvement
… what you need, when you need itAs the service provider for your POS systems, we continue to look for new ways to meet the needs and expectations of stores while finding more effective ways to share information. Here's a quick review of KWI improvements that get you off to a strong start in 2009: Round-the-Clock Response During 2008, some stores initiated operational changes. We also saw an increasing trend towards non-traditional business hours. We responded with live 24x7 POS support
so whenever you need KWI, real-time assistance is just a phone call away.
Problem Tickets When questions are not urgent, problem tickets can be opened using email – a convenient way to reliably communicate with KWI. Simply writing to [email protected] or [email protected] automatically opens a ticket (for POS and Back Office respectively) and emails you confirmation of the ticket information. Tickets receive timely response as per the Service Level Agreement. Status of your inquiry is available by accessing KWI RITS (Request and Issue Tracking System) via KWI Back Office.
Installations Information regarding installation requests is becoming more transparent. We recently migrated our install tracking to a new 'bucket' called POS Installs in the RITS system. Here, we can easily preview installation events and work with clients to ensure that all necessary conditions are in place for a successful installation – be it a new store, a peripheral device or an additional register. Within the next few weeks, POS Installs will also be accessible via KWI Back Office – enabling our clients to view, confirm and prepare for various in-store activities.
The Price is Right In the past, in-store price file corrections required intervention by our programming staff, slowing our responsiveness. Manual steps increased the chances of errors. Now, the Help Desk is equipped, for all Coalition POS registers
(Java Back Office clients), to create and process price files immediately.
You can anticipate more positive changes in the coming year, as we continue to improve our technology and response systems in support of your retail success.
For more information contact Jean Nelson, Chief Support Officer, at [email protected] or (516) 621-2400, ext. 313.
Return Fraud: A Growing ConcernIn tough economic times like these, returns become more prevalent – and so does return fraud. According to the National Retail Federation, nearly 9% of all returns will be fraudulent. About a third of return fraud incidents occur during the Holiday Season.
As with so many aspects of retail, good customer service can be your saving strategy in avoiding this type of loss. Attention and care during the return process can help
retain good customers, attract new customers (i.e., when customers return gifts to a store they don't normally shop), and discourage the fraudulent returner. Here are some ways you can discourage fraudulent returns:
�● Conspicuously post your return policy. Some municipalities detail where this policy must be posted.
�● Use receipts to communicate your return policy.�● Require receipts for returns.�● Issue the same form of tender used for the original transaction. If a credit
card was used, always issue the credit to the same credit card to remain compliant with your credit card processing agreement.
Additional deterrents:
�● Consider offering store merchandise credits or equal exchanges to limit cash returns.
�● Provide gift receipts as a vehicle to expedite returns and increase customer satisfaction.
�● Consider time restrictions as part of your return policy.�● Require ID for returns.�● Make sure your employees understand your return policy, and how to
address different situations.
Don't forget your KWI reporting capabilities: use your POS capabilities to track returns, identify fraudulent returners, and deny repeat offenders.
Lastly, remember a return is always an opportunity to upsell, and to impress customers with your friendly efficiency.
For more information on Return Fraud and other Loss Prevention issues, contact Phil Hummel, Vice President, Global Food Service Development at [email protected] or call (253) 238-8648.
Meet the Admin Team
From left to right, Aisha Ahmed, Lori Morgan, Susie Yarmark and Jennifer Hubble. It may be one of the smallest departments within KWI, but don't be fooled: the Administration Department (a.k.a. Admin Team) could be described as the company's "backbone". Ensuring the smooth running of day-to-day activities, the Admin Team encompasses Accounting, Purchasing, Executive Support and Office Management. Together, they handle all aspects of accounts payable, accounts receivable, customer and sales administration, order processing/scheduling, visitor care, business operations, supply procurement and customer/vendor maintenance. Whew!
The Admin Team deals with every department within KWI, as well as Business Partners and Customers who require assistance over and above the norm. What's more, they have admirably maintained their focus despite current business challenges. Their ongoing adaptability and dedication support the whole of KWI and our customers alike.
For more information please contact Jennifer Hubble, Purchasing Coordinator, at [email protected] or (516) 621-2400, ext. 300.
New Concept:
L'Koral to open Elizabeth & JamesYou heard it here first. L'Koral, sportswear manufacturer, is going retail. It's the parent company of the brand Elizabeth & James, opening its first store in New York later this year. The retail operation will be taking advantage of KWI's diverse offerings, including POS, Back Office merchandising and Merchant Services processing.
The Elizabeth & James product line is geared towards upscale female consumers in their thirties … a demographic
with a healthy appetite for fashion and the means to afford it. The unique collection, co-designed by Ashley and Mary-Kate Olsen, crosses masculine and feminine with casual and dressy, including such diverse offerings as menswear-inspired blazers and shirts as well as mini-dresses.
L'Koral will manufacture just about all of the products featured in the Elizabeth & James stores. Logistics will be supported by the parent company's Los Angeles warehouse, which will send the merchandise directly to the stores.
Between KWI's technology and their own internal support structure, L'Koral will be strongly positioned to profitably control their entire operation – an advantage in any economy.
For more information, please contact Gary Stein, Implementation Manager, at [email protected] or (516) 621-2400, ext. 369.
This Month’s Short Cuts
Time-saving tips and ideas that are right on the money – from the staff of KWI.
1. KWI Merchant Services Tip of the Month … from David Drucker and Phyllis Gricco
New Year - New Processor! Know what is in your merchant agreement.
Did you know that January is the most common month to switch merchant processors? Everyone is looking to cut costs and the first step is to know what your current
agreement says. Take a moment to find it, read it, and contact KWI Merchant Services. We will be more than happy to explain it to you. Make sure your business is receiving everything you were promised in the agreement.
Can't find your agreement? Contact your current provider and have them provide a copy. Be sure they include any revisions, addendums or amendments that may have been made since it was first written.
For more tips on your merchant agreement, please contact David Drucker, President, KWI Merchant Services at [email protected] or (516) 621-2400, ext. 720. 2. CRM Tip of the Month … from Jubin Thomas, CRM Services Manager
How often is enough?
As stores seek to build traffic during the current spending lull, it's tempting to blitz your consumer base with emails, flyers, phone calls, etc. So the question is, how many messages should you send, and how often?
Over-frequency often results in list fatigue and customers begin opting out of your communications. Too infrequent and the customers will forget who you are – which can also lead to opt-outs. Your opt-out counts are a great metric for customer acceptance of number and frequency of emails, so keep an eye on them.
We've done the research on both aspects of communication, and the recommendation is, "If you have something relevant to say to the customer, send as many as you like." That is, don't communicate just for the sake of sending something. If you have an overall plan for what you are sending – such as something of value, or newsworthy for the customer – then it is appropriate to send as many marketing pieces as fit within your strategy.
Happy New Year from the KWI-CRM Team!
For more information on communication strategy, please contact KWI-CRM at [email protected] or (516) 621-2400, ext. 367. 3. LP Tip of the Month: From Augusto "Gus" Castano, CFI, Regional Loss Prevention Manager
Organized Retail Crime
With the Holiday Season just past us, it is quite possible that your store was the target of organized retail crime. High traffic and loaded displays make a "perfect storm" of opportunity for theft.
According to the National Retail Federation, organized retail crime (ORC) refers to groups, gangs or individuals who are engaged in illegally obtaining retail merchandise through theft and fraud in substantial quantities as part of a commercial enterprise. These crime rings generally consist of "boosters" who methodically steal merchandise from retail stores, and fence operators who convert the product to cash or drugs. Some of the more sophisticated criminals engage in "ticket switching" – changing UPC bar codes on merchandise so it rings up at lower cost. Others use stolen or cloned credit cards to obtain merchandise, or produce fictitious receipts to return products.
The FBI estimates that ORC is a $30 billion a year business. What can you do to help stop it in your store? Here are a few tips:
�● Educate employees on what ORC is and how it can take place.�● Partner with other retailers, mall security and local police to share
information and increase awareness.�● Merchandise your store properly. Expensive and "easy to steal" items can
be very enticing to ORC groups, especially when displayed near entrances/exits, in "blind spots," near fitting rooms, or in large quantities.
�● Follow proper procedures at Point of Sale to minimize Credit Card, UPC bar code, and Check fraud issues.
Above all, provide excellent customer service – this helps to identify and deter shop-lifting. Acknowledge customers as they enter and offer assistance during their visit. This sends a message to would-be thieves that they are being observed.
For more information, please contact Gus Castano, CFI, Regional Loss Prevention Manager at [email protected] or (516) 673-7088.
