Bernard Chaus, Inc. gains insight into retail sales yielding significant cost savings

Smart is... Finding out exactly what is selling at retailers, and why – making decisions in near real time to drive increased sales and lower markdowns by 20 to 30 percent. By using SKYPAD, a unique Cloud Computing solution from Sky IT Group and IBM, Bernard Chaus, Inc. has achieved the impossible – the ability to track which clothing items are selling – and which are not – at the retailer level on a day-to-day basis. This unique insight is achieved by merging information from retail outlets around the world augmented by Chaus Enterprise Resource Planning (ERP) data. Chaus can quickly make predictive decisions to help customers drive sales, cut markdowns and realize cost savings. Everyone across the supply chain, from sales, merchandising, designers and buyers, now can quickly determine what is influencing sales and respond with immediate action to improve business results.

Bernard Chaus, Inc. is a mid-sized women’s career and casual sportswear company that designs, sources and markets an extensive range of women’s career and casual sportswear under the Josephine Chaus, Cynthia Steffe and other brand names, among many private labels. Running a mid-sized business today is difficult. There is foreign competition which squeezes margins and crowds the market; the Internet, which trashes the traditional design cycle and brings in thousands of low-cost competitors, and the growth of bigger franchise operations. Finally, there is the emergence of the Baby Boom echo generation which spends less on clothing generally; however, when they do shop they invest in casual and down market items. What’s to like about this environment?

Clearly, the pressure is on to “get it right the first time” if we are to be successful,” says Ed Eskew, Chief Information Officer for Bernard Chaus, Inc. “Traditionally, if you miss the mark you won’t find out until it’s too late, some four or five weeks into the season. That leaves precious little time, maybe three weeks, to facilitate corrective action, recommend the shifting of inventory or deliver new product. Furthermore, you need to have enough business intelligence available regarding your product, and supply chain to help guide corrective action with respect to mismatches in the hopes of regaining some market momentum.”

Seeking a more nimble, responsive BI solution
Chaus found its sales and merchandising tracking efforts were weighted toward time-consuming report creation and data issues. That, combined with the increasingly competitive nature of the business, prevented Chaus from effectively analyzing and addressing its selling opportunities. Obviously, Chaus wanted to correct those shortcomings and had been seeking a more responsive, nimble Business Intelligence (BI) solution for years.

“The problem,” Eskew says, “was that all the suppliers we talked to produce their final reports in either spreadsheet format or standardized EDI transaction sets. Considering the vast number of different retail outlets, we’d end up with a hodgepodge of different reports and unrelated data. And frankly, most people in our business have trouble reading and understanding complex data, let alone gleaning useful information from it. Creating flexible, drill down reports from the data we received would have been impossible.”
After evaluating a number of Business Intelligence (BI) solutions, Chaus chose SKYPAD from IBM Premier Business Partner Sky IT Group. SKYPAD is delivered via a Web portal under the Software as a Service (SaaS) model via Cloud Computing. Utilizing the IBM DB2® Enterprise Edition V9.7 database running on IBM BladeCenter® HS20 and HS21 servers, SKYPAD integrates weekly EDI and spreadsheet feeds from each retailer selling various Chaus products. That information is rolled into a comprehensive report which all key groups: design, sales, merchandising, and production can utilize – in an easy-to-read dashboard format built to their specifications. Lots of images are used which make the dashboards and reports much easier to understand resulting in improved decision-making.

Then the magic happens
The EDI data and spreadsheets are first scrubbed by the EDI IT team at Chaus, and then passed along to the Sky IT Group for further cleaning. Then the magic happens. At this point, the information is entered into the SKYPAD database, which places it neatly into a series of dashboards, which were created by Sky IT Group for each user group in the supply chain – with lots of user input. A salesperson or merchandiser at Chaus can act immediately by collaborating with the retail buyer, and with just a few mouse clicks can now see exactly what items are selling across the retailer’s locations, by style, size, price or any other attribute selected. If red blouses are selling like hotcakes in St. Louis and black is flying off the shelves in New York City, the buyer can swap inventories between the cities to optimize sell-through..

Additionally, as Chaus report users request new levels of reporting and data integration, the SKYPAD team proactively manages these requests. Using SKYPAD, the company has been able to reach previously unattainable levels of supply chain visibility while dramatically improving its vendor-managed inventory program. By immediately identifying slow-selling items, SKYPAD drives strategic discounting to ultimately improve sell-through results. As a result of using SKYPAD across each function’s day-to-day activities, inventory turns and efficiencies have greatly improved, and that has led to improved productivity, margins and bottom line results.

“IBM helped us every step of the way in building this product,” says Jay Hakami, President and CEO of Sky IT Group. The components, such as IBM BladeCenter and DB2, are bullet proof and can crunch numbers faster and more accurately than previously possible. The IBM technical teams were right there when we needed them providing marketing and PR support which made a huge difference in our ability to reach our target market.”

Business Benefits• Improvement in sell-through (actual items sold) saving millions in returns, lost sales and mark-down expenses. Cost savings through cost avoidance of some 20 to 30 percent• The merchandising team can improve planning to optimize the mix of styles, colors and size levels by predictive analysis of sales and inventory levels • Sales and merchandising work more closely together -- to ensure better product assortments based on historical and in-season sales trends• Design analyzes consumer demand to provide sales with better sell-through products

The Inside Story: Getting There
Chaus had been looking for a better way to get a handle on best and worst sellers at the retail level with adequate time to react – previously, they were forced to absorb mark-downs, lose sales and/or real estate on selling floors. As described earlier, all competitive solutions used spreadsheets of one kind or another, which did not meet Chaus requirements for speed, readability and adaptability.

The reaction was WOW!
For eleven years, Sky IT, Inc. had worked with Chaus to expand the IT infrastructure for its AS/400® system, including ERP design, Electronic Data Interchange (EDI) and worldwide access. Then, in 2007, Jay Hakami, President and CEO of Sky IT Group told Ed Eskew about a new Business Intelligence project they were working on called SKYPAD. The goal, Eskew remembers, was nothing short of amazing. What they were attempting had never been done before. “When I saw what they had accomplished,” says Eskew, “my reaction was, WOW! It was the answer to our dreams. It integrated our entire supply chain providing easy access, given its Cloud Computing model. Our retailers were provided timely data while our wholesalers received weekly, accurate updates just in time for their Monday executive meetings. If they could pull it off, and that was a big IF, this was exactly what we needed to change the way we did business”

But it wasn’t just Eskew who was happy. The Chaus IT team loved the SKYPAD solution because it ran on the Internet as a portal
application – available anytime, anywhere from a browser. And it ran on rock-solid IBM hardware and middleware infrastructure. The combined power of the IBM BladeCenter and IBM DB2 Enterprise gave Chaus the power to crunch numbers while providing the slicing and dicing of information capability it so desperately needed. In addition to an SaaS model, SKYPAD also provided an in-house option should Chaus decide to purchase the software and support the platform internally. Since the user community loved the browser concept to access dashboards and create reports, coupled with its ability to incorporate images quickly and easily, the portal was the clear choice for Chaus. With powerful capabilities to sort through data using just about any criteria conceivable, by product, style, geography, brand or retailer – all within two or three clicks – Chaus knew they had found their product.

It was a chain reaction
SKYPAD answered Eskew’s big IF by installing the basic solution as a Cloud Computing application in just four weeks. This gave everyone a chance to test drive the application and start submitting ideas. Eskew says this was the secret to SKYPAD’s successful implementation. “We let everyone play with the power of the system. It was a chain reaction. When they saw how SKYPAD could change their lives, everybody got on-board. Our sales people, for example, realized they were no longer just number takers operating in the dark but true partners with their customers. They could help our retailers observe the activity on the retail floor, and provide the sales reps with improved selling strategies.”

“Our story serves as an example of what can happen when the power of IBM works through its very business savvy partners, such as Sky IT Group,” says Eskew. “A mid-size company like Chaus gets to compete in a very difficult retail landscape.”